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How to Use Supply Chain Management System to Elevate Efficiency

How to Use Supply Chain Management System to Elevate Efficiency. Louis Lam ( 林忠明 ) Vice President of Operations Asia Pacific Avnet Asia ( 安富利电子 – 亚洲 ) June 25 th , 2005 in Beijing. About Avnet Inc. Incorporated in 1955 Listed at New York Stock Exchange since 1960 NYSE: AVT

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How to Use Supply Chain Management System to Elevate Efficiency

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  1. How to Use Supply Chain Management System to Elevate Efficiency Louis Lam (林忠明) Vice President of Operations Asia Pacific Avnet Asia (安富利电子 – 亚洲) June 25th, 2005 in Beijing

  2. About Avnet Inc. • Incorporated in 1955 • Listed at New York Stock Exchange since 1960 • NYSE: AVT • Headquartered in Phoenix, Arizona USA •  10,000 employees • 68 countries •  300 Offices

  3. About Avnet Inc. • FY04 Revenue US 10.2B (+2.3B) • Y2005 Business Related Ranking: - 217 in Fortune 500 &- 1349 in Forbes Global 2000 • Enabling success from the center of technology • Electronic components • Avnet Electronics Marketing • Computer products • Avnet Technology Solutions • Formerly Avnet Applied Computing & Avnet Computer Marketing $4.35B $5.89B $1.45B $5.41B $3.38B

  4. Asia Market Coverage INDIA • New Delhi • Bangalore • Pune • Bombay • PLANNED • EXPANSION • Japan • TAIWAN • Taipei NORTH CHINA • Beijing • Shanghai • Suzhou • Dalian • Harbin • Qingdao • Tianjin • Wulumuqi • Xian • Zhengzhou • Hangzhou • Nanjin • Ningbo SOUTH CHINA • Hong Kong • Shenzhen • Shunde • Wuhan • Xiamen • Changsha • Chengdu • Ningbo • Fuzhou • Guangzhou ASEAN • Singapore • Penang • Kuala Lumpur • Jakarta • Bangkok • Manila • SOUTH KOREA • Seoul • AUSTRALIA / NEW ZEALAND • Sydney • Melbourne • Brisbane • Perth • Auckland • Christchurch

  5. Tier-1 Tier-2 Tier-3 Avnet-Asia Value Proposition Customer Value Proposition Channel Integrated Materials Services Local warehouses, Proximity Hubs Sales coverage, Technical Support, Turnkey Solutions, BOM Bundling Regional Sales Teams, DCs & IDHs, Tier Two Telesales & Sub-Reps Inventory Tier Three

  6. End-To-End Connectivity{EDI, RosettaNet & China eHub}

  7. Typical EDI Setup… VANValue Added Network Avnet’s Business Partners ORDERS EDIFACT ORDERS SAP IDOC ORDRSP EDIFACT ORDRSP SAP IDOC

  8. RosettaNet Architecture… Avnet’s Business Partners PO request Receipt acknowledgement or Acknowledgement exception PO acceptance or rejection TradingNetwork(TN) BackendSystem SAP (guarantee of delivery) Integration Server PIPS PIPS IDOC Server Admin Developer TN Console TNDatabase Acceptance receipt acknowledgement Order status update and Advanced shipment confirmations

  9. Avnet’s RosettaNet History… • Late 1990’s, Avnet invested in RosettaNet • 2000, first in the industry to deploy order management using RosettaNet • 2001, Price Waterhouse validated RosettaNet’s viability based on Avnet’s HP implementation • 2002, Directed our focus on true revenue transactions with IBM & Cisco, rather than non-vital informational transactions • 2002, Avnet Europe deployed order management using RosettaNet • 2003, first in the industry deploying RosettaNet Design Win • 2003, Avnet integrated Asia into global RosettaNet infrastructure • 2004, Avnet, China ECNet & GXS deployed the first order management RosettaNet solution in Asia supporting FiberHome

  10. Contract Design Design Win Design Win Manufacturing “Design Win” Generating Revenue in China…

  11. Asia Order Cycle Time Opportunity… Traditional RosettaNet Employee Effort Employee Effort Cycle-Time Cycle-Time Quoting 30 min. to 3 hrs 4 hrs to 24 hrs 15 min. 15 min. Order Approvals 55 min. 55 min. 0 min. 0 min. PO Creation 30 min. 30 min. 0 min. 0 min. PO Placement 0 min. 40 min. 40 min. 15 min. Minimum 30 min. to 4.5 hrs. 40 min. to 24 hrs. Total 15 min. 30 min. Maximum

  12. EDI RosettaNet Order Transaction Volume Change…

  13. RosettaNet Transaction Growth…

  14. RosettaNet PIPs Implemented…

  15. Pressure from Partners Internal Efficiency Enabled Technology Competition Drivers for e-Commerce Business Objectives…

  16. Relative Effect of Using RosettaNet Process Standards… ROI 230% high Manually intensive Organizational impact Proprietary VAN/EDI Quantifiable benefits low low high Financial benefit

  17. Benefits From Several Perspectives… • Process benefits from eliminating redundant activities, eliminating manual data entry, and automating information processing • Financial benefits from streamlining processes, reducing cycle time, and increasing data accuracy • Business development benefits from increasing connectivity with key suppliers, partnering with key suppliers, and increasing responsiveness to customers

  18. RosettaNet Standards Produced Results… • Manual order processing was reduced by 90% • Order response time was reduced from 8-10 hours to 2 hours for exceptions that require manual intervention and less than 20 minutes for non-exceptions • 7x24 and real-time ordering capability were achieved • Inventory turns were doubled, freeing staff from manual order processing, and allowing more time for inventory management • Order accuracy was improved, eliminating additional re-entry tasks and other costs

  19. China eHubA More Flexible Way To International Standards on B2B Connectivity

  20. Avnet’s RosettaNet History… • Late 1990’s, Avnet invested in RosettaNet • 2000, first in the industry to deploy order management using RosettaNet • 2001, Price Waterhouse validated RosettaNet’s viability based on Avnet’s HP implementation • 2002, Directed our focus on true revenue transactions with IBM & Cisco, rather than non-vital informational transactions • 2002, Avnet Europe deployed order management using RosettaNet • 2003, first in the industry deploying RosettaNet Design Win • 2003, Avnet integrated Asia into global RosettaNet infrastructure • 2004, Avnet, China ECNet & GXS deployed the first order management RosettaNet solution in Asia supporting FiberHome China eHub

  21. ERP Avnet China e-Hub TradingNetwork(TN) Enterprise Data Center Server Admin IDOC to PIPs Translation RosettaNet Plug-In Integration Server Developer TN Console Application Integrator PIPs 3A4 TNDatabase XML Plug-In China e-hub Concept… SAP IDOC Comm Gateway ERP Format PIPs 3A4 SAP IDOC PIPs 3A4

  22. IMPLEMENTATIONPROCESS GO-LIVE Sign-Off User Acceptance Testing Connectivity/End-to-End Testing Development Specifications Sign-Off Prepare PIPs Specifications Reach consensus on PIPs usage and timeline Understand Existing Order Processes

  23. Fiberhome & Avnet's Strategic Focus • Customer – Excellent customer relationship improves customer loyalty. • Velocity – RosettaNet enhances data exchange accuracy and efficiency. • Flexibility – Ability to respond to upsides and downsides is very critical. • Risk – Minimize inventory liabilities and line-down situations. Provide value-added service such as Forecast Management. • Visibility & Control – Balance of demand and supply, and use of KPIs to monitor/feedback. • Franchised Lines – Leverage on strengths and relationships with Franchised Suppliers (i.e. buffer stock, pricings, lead-times, etc.)

  24. China eHub Solutions… Interchange Services Mailbox Business Partner EDIFACT Interchange Services Mailbox User-Defined File China eHub Business Partner ANSI Interchange Services Mailbox Interchange Services Mailbox Business Partner XML

  25. 谢谢! Xie Xie ! Thank You !

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