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Our ebusiness Strategy

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Title: Our ebusiness Strategy


1
COMPANY TO
2
  • June 19, 2003
  • Wyndham Hotel
  • Philadelphia, Pennsylvania

3
Building a Diversified E-Procurement Strategy
  • Timothy D. Tulio
  • Manager, E-Procurement, Systems Support
  • Air Products and Chemicals, Inc.

4
At Air Products The Journey Continues….
5
Who is Air Products?
5
6
Fast Facts
  • The worlds only combined gases and
    chemicals company
  • Fortune ranking 311
  • Serving customers in technology,
    energy, healthcare and industrial markets
  • Chemical industry safety leader
  • Geographically diversified, with more than half
    of our sales outside of the U.S.
  • Operations in more than 30 countries
  • 17,200 employees worldwide
  • Known for our innovative culture and operational
    excellence

7
Air Products Consolidated FY02 Revenue 5.4
Billion
8
What do our products do?
8
9
Current Markets for our Gases, Chemicals and
Equipment
10
Major Focus at Air Products Today?
11
Our e-business Strategy
Post SAP
Transformation - Supply chain optimization -Ind
ustry-specific app. engines - Customer
integration - Advanced personalization

2002
Transaction - E-Commerce - EDI/XML support - Auct
ions - Databases - Customer self- service -
Real-time access to information
Business Value
2000
Interaction - Prod. Specifiers - Process-specific
applications - Catalogues - Personalization -
Communities
1996
On-Line Presence - Marketing Info - Brochures
New Business Models
Gartner Group
12
Generational approach to strategy
  • First Generation Catching the Internet
    Leaders
  • Rapidly adopting the technology of others
  • Building infrastructure
  • Internet enabling existing processes in response
    to customers
  • Second Generation - Creating Value
  • Creating value
  • Exploiting infrastructure
  • Harnessing creativity to provide unasked for
    customer value
  • Third Generation - Reinventing Air Products
  • Rolling out a networked, new business model
  • Supply Chain Optimization

13
For more info http//www.airproducts.com/ebusiness
14
Four Corners of Value
Showcase Sites
APDirectSM Customer Portal
A low-cost way of reaching new customers, telling
them what they need to know about our products
and services
Much more than ordering, APDirect lowers our
cost-to-serve by automating information sharing
with our customers
In FY'03 4 of value created for every 1 spent
Were strengthening our customer relationships by
lowering the overall supply chain costs via
ERP-to-ERP transaction processing
Driving benefits from our supply relationships
through transaction efficiency, contract
compliance and reduced cost of goods and services
B2Bi Connections
E-Procurement
15
Air Products Spend Profile
16
16
A
High Level RTP Work Process
Determine Sourcing
Purchase Goods And Services
Remit Payment
Receive Goods And Services
Complete Requisition Specification
Goods Services Requirements
Supplier Payment
Approved Requisition Specifications
Verified Receipt
Shipped Goods/ Supplied Services Supplier Invoic
e
Qualified Sources
Plan and Produce Products and Services
Goods/Services
Purchase Requirements
Create and Improve Assets
Goods/Services
Purchase Requirements
17
APDirectSM Procurement
EMPLOYEE SELF SERVICE
B TO B CONNECTIONS FOR PROCUREMENT
STRATEGIC SOURCING
KPIS
COLLABORATION
Buying Indirect Goods/Services such as, office
supplies, industrial supplies, temp services,

personal buying
Transacting for the Purchase of Direct Goods s
uch as, chemical feed stocks, spare parts, val
ves/instruments
Leveraged Sourcing Networks and Tools
Measuring Global Process
e-Enabling Buyer to Supplier Negotiating And Com
municating
Compliance Monitoring and Measurements
Elemica
Leveraged Sourcing Network (LSN)
  • APDirect Buyer Portal
  • APDirect Buyer
  • Supplier Internet
  • Ordering
  • Ordering Information
  • APDirect Sourcing
  • (e-Sourcing/Reverse
  • Auction)
  • E-RFX
  • Reverse Auctions

WebEC
APDirect Sourcing
Scorecard for Requisition to Pay Process
  • Project Workspace
  • (Business Alliance)
  • ERoom
  • Placeware

APDirect Traveler Online Tool for Booking Busin
ess Travel
EDI
Global Supply Agreements
APDirect Supplier Web Online Tool for Booking B
usiness Travel
18
Key Elements for Success
  • Enabling Applications
  • APDirect Buyer
  • APDirect Sourcing
  • APDirect Traveler
  • B2Bi Connections (Elemica, EDI, Web EC)
  • KPIs
  • Compliance Metrics
  • Accountability/Responsibility
  • Management Support

Without one leg the stool collapses!
19
Air Products Spend Profile Strategic
Categorization
20
Enabling Applications
  • APDirect Buyer
  • Powered by Ariba Buyer
  • Non-Technical MRO
  • Catalog Driven Model
  • Supplier Card Payment Model
  • Cost Savings Realized on Transactions and
    Leverage Procurement
  • Hosted Application
  • Live in 7 Countries

21
(No Transcript)
22
What Have We Been Doing? APDirect Buyer
  • Jan 02
  • of Active Users-1300
  • of Catalogs--15
  • of Transactions2200/Month
  • Dollars--275M/Month
  • Savings 4MM/year
  • Today
  • of Active Users-2100
  • of Catalogs--30
  • of Transactions3300/Month
  • Dollars--500M/Month
  • Savings 9MM/year

23
APDirect Buyer Next Steps
  • Continue Global Expansion
  • Increase Types and Number of Catalogs
  • Drive More Non Technical Purchases to APDirect
    Buyer
  • Expand Use of Non-Catalog Purchases
  • Enhanced Searching (Search Punchout, internet and
    Internal)
  • E-Invoicing

24
Enabling Applications
  • APDirect Sourcing
  • Powered By Ariba Enterprise Sourcing
  • RFx, Dynamic Bidding Events
  • Primary use by Professional Buyer
  • Standardized Methodology for Sourcing Goods and
    Services
  • Historical Repository of Sourcing Data

25
What Have We Been Doing? APDirect Sourcing
  • Jan 02
  • of Events--0
  • Total Spend--0
  • Total Savings--0
  • Today
  • of Events--20
  • Total Spend--40MM
  • Total Savings--4MM

26
APDirect Sourcing Next Steps
  • Expand Usage of Tool Globally (Asia, Europe)
  • Standardized Sourcing Process Globally
  • Dedicate Resource To Project
  • Expand Use to Additional Material/Service
    Segments
  • Shift threshold to lower dollar events

27
Total Leveraged Savings E-Procurement
28
Enabling Applications
  • B2Bi Connections
  • ASNAriba Supplier Network for Purchases of
    Non-Technical MRO Items not in SAP
  • ElemicaFocused on Sell Side and Buy Side
    transactions to Chemical Partners
  • Web EC/EDIFor suppliers who do not fall into the
    other two categories

29
Success Requires Scalable Supplier Enablement and
Connectivity
30
Direct Connection External Partners
Machine to machine connection, either directly or
through a third party. Includes ERP to ERP
connection as well as system to remote sensor
connection.
31
What Have We Been Doing? B2Bi Connections
  • Jan 02
  • Transactions 24,000/yr
  • Dollars 4MM/yr
  • of Partners 22
  • E-Enabled Transactions 17
  • Today
  • Transactions 50,000YTD
  • Dollars 89MM/YTD
  • of Partners 120
  • E-Enabled Transactions 50

32
B2Bi Connections Next Steps
  • Expand B2Bi Connections Globally (Europe)
  • Drive More Suppliers to One of the B2Bi
    Connections Methods
  • Expand Number of Elemica Connections
  • Expand use of ASN (Ariba Network)

33
Total E-Enabled Procurement
34
Enabling Applications
  • APDirect Traveler (Launched Oct 02)
  • On Line Travel Booking Application
  • Mandatory for All Simple Roundtrip Travel
  • Cost Savings Realized Exceeds 400M
  • Compliance Over 71 (May 03)
  • Planned Roll out to UK in July 03

35
Metrics Tied to IncentivesSuccess
36
Without Top Level Management Support and
Commitment None of This would be Possible
37
So When Will The Journey End?
  • I Will Let You Know When We Get There

38
Presentation will be available at
www.airproducts.com/ebusiness
39
Thank you
40
Tell Me More
www.airproducts.com
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