Presentation for the Network of Networks Group in Europe on 11.21

Why the Network of Networks?
Increasingly companies are evaluating business network
solutions to close the gap on inter-enterprise visibility
and improve inter-operability;
but as the team works the problem, they find that they
need to somehow interconnect business networks. The
gaps are large. The solutions to close the gaps are not so
easy.
Our goal is to bring Manufacturers, Retailers, Distributors
together along with Technology and Logistics Providers as
equals in order to better understand the issues and
generate ideas to help build the “network of networks.”

Looking Back

“This exponential growth cannot
continue into the next
millennium,” Hawking, who has
been coping with
neurodegenerative disease for
decades, said in his computer-
synthesized voice. “By the year
2600, the world’s population
would be standing shoulder to
shoulder, and the electricity
consumption would make the
Earth glow red-hot.”
Why the Network of Networks?

2006
2017
2006
[CELLRANGE]
4.5
5.5
6.5
7.5
0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18
InventoryTurns
Operating Margin
Retail Industry Household Products - Nondurable
Best
Scenario
Household
Products -
Nondurable
0.16, 5.39
Retail Industry
0.07, 6.48
Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2017 from YCharts
Value Networks: Operating Margin vs. Inventory Turns
(2006 - 2017)

Started in 2016 in the states and later in
2016 in Europe
History

What Is A Network?

Supply Chain Operating Networks

Integration Data portability and
synchronization
Linear flows Network bidirectional flows
Functional focus Need for plan, source,
make and delivery to work
together
Master data Need for authoritative
identifiers
What Did I Learn?

1) Determine the ROI for the
future state of B2B visibility.
2) Advance the learnings and
insights of business and
technology leaders on the
user of new technologies.
3) Start the work on multi-tier
process development.
4) Test and learn: new
technologies and approaches.
5) Define the organizational
fabric to improve B2b
processes.
Goals

Network of Networks - Use Cases
Onboarding Pilot
For the Supply Chain Leader Who Wants to Rise Above

Summary Discussion
At the April 2018 Network of Networks meeting in Chicago, IL it was agreed to continue the
onboarding pilot:
• The eALEI.org (ISO/DIS 8000-116) as a common core trading partner register was
successfully demonstrated
– Further updates are needed to include improved request for the addition of trading partners.
– The data contained in the eALEI is sourced from authoritative government sites or documents, there
is a need to display the date when the data was sourced and to develop a plan for updates (update
once, all parties updated)
• It was agreed that it is the responsibility of the initiating trading partner to ensure that both
trading parties have a record in the eALEI.org before notifying the networks
• ISO/DIS 8000-116 (ALEI) is useful in identifying duplicate trading partner records within a
company and useful in communicating correct trading partner name to networks
• Onboarding for a network to network (digital) connection is a second step that supplements
an existing trading relationship
• Initial onboarding requires setup of (1) legal entity data, (2) functional location data, (3)
product data and (4) contract data
Summary

 It was agreed that shared common core trading partner data would be useful
to the vendor onboarding process.
 Analysis of vendor masters will be performed to identify common core trading
partner data
 A hosted registry will be created to allow common core trading partner data to
be uploaded
 The hosted registry will be compliant with ISO 8000-120 (quality master data
with provenance)
 A validation process will be agreed
 An ISO 22745 compliant API will be developed to allow synchronization of
shared common core trading partner data
 Consideration will be given to the use of blockchain for the decentralization of
the registry of common core trading partner data
 Analysis of onboarding forms in order to propose a “Universal Supplier Setup”
form
Phase 1 completed

Using ALEI to improve Vendor Master
Case study
Task:
• Research ALEIs for 24,245 suppliers in 81 countries
Results:
• ALEIs could be verified for 17,111 suppliers (71%) in 33 countries
• 7,134 (29%) of the suppliers will need to be asked for more information to verify
their legal status
• Of the 17,111 verified suppliers 7,060 (41%) were duplicate records
ALEIs researched 24,245 100%
ALEIs verified 17,111 71%
Further information required from vendor to validate legal entity 7,134 29%
Verified ALEIs 17,111 100%
Verified Legal Entities 10,051 59%
Duplicate records linked to master Legal Entity records 7,060 41%

Trading Partner Data model

1. An analysis of supplier onboarding forms has been completed:
a. a draft trading partner model was developed and is being tested
b. a Universal Supplier Onboarding Form (USOF) has been developed and is being tested
Members of NoNs group are encouraged to compare the model and form to their onboarding data
requirements and advise any missing data elements
2. The eALEI.org website continues to be developed
a. Links to government registries have been completed and are being maintained
b. Password control has been added to non-public data
c. Ability to output the universal onboarding form has been added
d. ISO 8000-116 has been approved by the ISO committee for ballot as a draft international standard
(DIS)
3. A case study on the use of ALEI to identify potential duplicate supplier records was successfully
completed
4. Network plug and play (interoperability) is being discussed as phase 2
Status

Challenge
• Parties are using different transactions* (typically these are EDI transactions) and they rely on their networks to set up secure
communication as well as provide syntax and semantic mapping.
*Even when the parties are using the same EDI transaction or message standard, they implement the standard differently and as a
result data mapping is required.
Proposed solution
• Ad hoc network connections will require automated network discovery and automated syntax and semantic mapping.
• An ISO 8000-115 Network Identifier has been added to eALEI.org, this allows the identification of the network and the account
within the network. This will allow the automated discovery of the network. This data is sufficient for network interconnectivity.
• Both parties will need to define their data requirements using ISO 22745-30 statements. This will allow the requesting party to
communicate what data is required and the sending party to communicate what data is available. ISO 22745-30 requires the
use of an open technical dictionary this provides the data necessary for automated mapping. These data requirement
statements can be made discoverable on eALEI.org
• ISO 8000 quality portable data using ISO 22745-40 is the proposed common data exchange format. This is a simple xml
syntax where data is encoded using and open technical dictionary to create ISO 8000 quality portable data (converting an EDI
message to ISO 22745-40 is very straight forward).
Note: The technical solution is straight forward and relies on open standards. Implementation costs for a network are very low. The
technical solution will however make it easier for users to switch networks.
Expected value
• Administrative cost reduction
– Better (resolvable) legal entity, location and product references
– Improved internal controls and spend analytics (increased accuracy and timeliness)
– Compliance enabler (ITAR)
• Input cost reduction
– Opportunity for item aggregation and supplier optimization
• Cash enabler
– shorter cycle time of transactions, less invoice resolution,
– inventory optimization
Phase 2

Kevin Wong, Nulogy
JB Kuppe, Boardwalktech
Lora Cecere, Supply Chain Insights
September 18, 2018
Contract Manufacturing Materials Management
Improving Collaboration and Efficiency with Supplier-Managed Materials using
Blockchain

Problem Background
Industry Context:
● Brand customers are increasingly asking co-
packers and co-manufacturers (CPCMs) to take
over management of materials planning and
procurement
● Outsourcing this responsibility provides cost
savings and efficiency for brand customer, and
new service and revenue opportunities for co-
man suppliers
● Sufficient trust of co-mans is an obstacle to
greater adoption and success with this strategy
The CPCM
industry is
currently USD
25.67B (2017)
and projected to
grow at over 3X
the pace of
sectors it
serves.
- Contract Packaging
Association State of the
Industry Report 2018

Outsourcing Contract Key Concepts
1. Full Service - Turn Key: Supplier purchases the materials required to
build the finished goods from raw material suppliers of the supplier’s
choice.
2. Full Service - Directed Buy: Supplier purchases the materials required
to build finished goods from raw materials suppliers directed by the
customer with pre-negotiated pricing. The quoted/directed buy costs
are supplied by the customer to the supplier.
3. Reconciliation: A detailed comparison of the actual PO costs for the
materials utilized vs the standard cost/directed-buy cost
4. Material Cost Variables:
• PO quantity - variation based upon customer demand fluctuations
(e.g. residual or stranded materials)
• Print volume (e.g. gang printing savings vs. single run)
• MOQ - minimum order quantity resulting in residual materials
• Commodity variability - raw material cost changes due to commodity
cost fluctuations
• Supplier changes - directed-buy cost change with different raw

Problem Definition: Directed Buy Contracts
● Brands customers negotiate bulk pricing and volume with
material suppliers
● Contract manufacturers then procure against bulk contract,
but the actual price and volume can be significantly different
due to Material Cost Variables
● Resulting cost variances are not transparent to all
parties
● Lack of visibility and transparency into Reconciliation leads
to reduced trust in this multi-party environment, increasing
friction and limiting opportunity for both brand and co-man
supplier

Problem Illustration
Customer
Supplier CP/CM
1) Negotiated $1 for
100K units 3) Invoice for materials
Material
Cost
Variables 2) CPCM procures:
50K @$0.95
25K @$1.20
25K @$1.15
Material A
= $1 for
100K units
Benefit Areas: ✔ Visibility/Trust ✔ Latency ✔ Cost

Pilot Proof of Value (POV) Solution
An automated and seamless operational and blockchain system to
provide POV partners with the ability to quickly perform
reconciliation at any time.
● Automatically load data from operational system events to
ensure accurate reconciliation and improving speed, accuracy and
adoption. For example: Customer PO received, materials ordered,
production complete, etc.
● Blockchain digital ledger would ensure the reconciliation provides
objective, verifiable evidence for all transactions
● Potential additional capabilities:
● Automatic verification of POs where data meets expected
reconciliation criteria
● Reconciliations could alert both supplier and customer of any
significant changes in raw material costs – for example, any
single component cost change over 10% could trigger a
notification, leading to an investigation if warranted

Proof of Value Project Benefits
1. Faster and less expensive reconciliation between customer, CM
and supplier:
● Reduce person hours on low-value reconciliation work
● Free up more time and capacity for customer service and
strategic work
2. Faster cash cycle for suppliers:
● Shorten DSO (days sales outstanding / days receivable)
3. Vested partnership:
● More trusted, transparent, and strategic relationships focused
on improving agility, speed-to-market, customer service, and
other shared outcomes
4. Material cost savings:
● Identify cost fluctuations earlier to allow collaborative problem
solving and potential mutual cost savings

Discussion Points
● Data Integrity/Separation
● All integrations would be one-way to the digital ledger ensuring
ERP data integrity and separation
● Solution is not limited to any specific ERP system data
environment
● Security
● Nulogy and Boardwalktech have multi-national enterprise
customers with stringent security policies on authentication,
data governance, and data security
● Both companies bring the same capabilities to this POV project
● What is required by POV participants?
● SME and technical staff to support process workflow and data
integration needs
● Solution cost

POV Project Timeline
PHASE DESCRIPTION
APPROX.
DURATION*
Analysis
• Capture relevant customer processes as workflows
• Select appropriate test case (e.g. SKU)
• Determine relevant business rules on directed-buy reconciliation
2 weeks
Design
• Identify key integration points in partner systems
• Determine correct data field structures and mapping
• Design business logic and workflow for reconciliation rules/requirements 4-6 weeks
Development • Nulogy and Boardwalktech develop integrations and business logic
Testing
• Nulogy and Boardwalktech perform end-to-end testing together with
customer, supplier, and materials supplier
2 weeks
Setup and
Implementation
• Partners receive training and go-live with integrated workflow 1 week
* Assuming use of Nulogy platform and full availability of partner teams.

Proof-of-Value Pilot Roles
● Source data: Nulogy CP/CM system of record
● Digital ledger: Boardwalktech blockchain technology
● POV sponsors: Supply Chain Insights and F4SS
● Brand customer partner: Open to F4SS Member
● Contract manufacturer / packager partner: Open to F4SS
Member
● Materials supplier partner: Open to F4SS Member

Presentation for the Network of Networks Group in Europe on 11.21

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie Presentation for the Network of Networks Group in Europe on 11.21

Ähnlich wie Presentation for the Network of Networks Group in Europe on 11.21 (20)

Mehr von Lora Cecere

Mehr von Lora Cecere (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Presentation for the Network of Networks Group in Europe on 11.21