1. Debriefing Case 4 : Supplier & procurement analysis
Business Process and Information systems
Autumn 2016
Group C : Nicolas Etienne, Estelle Geneux, Ramy Fouda, Aloïs Borgogno & Ophélie Héral

2. Procure-to-pay : operational procurement
Goal :
Analyze the supply process with analytical tools (KPIs, reports and dashboards).
More precisely, we analyze the work related to inventories, purchase orders, contracts and supplier invoices, but also we define a new KPI with thresholds in order to monitor our sourcing strategy.
Inputs :
Contracts,
Suppliers,
Products,
Outputs :
Reports
KPIs
Detailed analysis
Inventories,
Purchases, …

3. Procure-to-pay : operational procurement

4. Analysis : Rolling Inventory Comparison (1)
Tasks :
Analyze inventories from different views and using filters
Compare different elements
Identify trends and outlying events
Data used :
Master data : Inventories.
Transactional data : Supplier invoices and sales.
Analytical data : Rolling Inventory.
Rolling Inventory Comparison in 2016

5. Analysis : Rolling Inventory Comparison (2)
Rolling Inventory Comparison in 2016 per Product Category
Task :
Add a dimension to the graph : “Product Category”
Select all the categories you want to be analyzed.
Analysis :
One category appears to be pulling the inventory up : “Boiler, Heater, Assemblies”.

6. Analysis : Purchase Order History (1)
Tasks :
Analyze purchase orders.
Change views to ease understanding.
Data used :
Master data : Suppliers.
Transactional data : Purchase orders.
Analytical data : Invoice Value.
Invoice to the Company per supplier within the last 14 days

7. Analysis : Contract spend (1)
Tasks :
Analyzing the use of contracts for the different categories products during the period of 2015 and 2016 (in terms of spend) ,
Find who are our majors suppliers.
And compare contract spend per month to total spend.
Data used :
Master data : Products and Suppliers.
Transactional data : Contracts and Supplier invoices.
Analytical data : Contract spend.
Contract spend per product categories between 2015 and 2016

8. Analysis : Contract spend (2)
Most important suppliers that worked with contract between 2015 and 2016
Comparison of contract spend to total spend save as “Contract ratio [student ID]”

9. Analysis : Contract spend ratio
Task :
Monitor contract spend ratio (KPI).
Data used :
Analytical data : Contract spend ratio (KPI).
Calculation formula of this KPI :
(Value of invoices with reference to a contract and no reference to a purchase order + value of invoices with reference to a purchase order and a contract) / Total value of all invoices.

10. Analysis : New Evaluation (1)
Tasks :
Create a new Evaluation based on an existing KPI.
Data used :
Master data : Products.
Transactional data : Contracts and Supplier invoices.
Analytical data : Contract spend ratio (KPI) as a base.
Base for the Evaluation
Which existing KPI will be the base for the new evaluation ?
What to evaluate ?
Dimensions : Product Category
Evaluate : 191 Boilers
How to evaluate ?
Condition : higher than
Target Value : 80%
If it doesn’t meet conditions ?
Critical Threshold : 72%
Medium Threshold : 76%

11. Analysis : New Evaluation (2)
Additional Dimensions
- What dimensions are mandatory ?
e.G : time, currency, VS suppliers
What to evaluate ?
Dimensions : Product Category
Evaluate : 191 Boilers
Global Properties
The new evaluation is all set. The only thing left to do is name it so it’s easy to find and maybe let a comment to explain what it does.

12. Analysis : Contract Life-cycle (1)
Tasks :
Find a report.
Display relevant information.
Analyze a report.
Data used :
Master data : Employee, Suppliers.
Transactional data : Contracts. Analytical data : Target and Released quantity.
Find Contract tracking report
Work Center > Sourcing and Contracting > Reports > list > Select “Contract Tracking”
Change Characteristic Settings
Select : Contract ID
Change Key Figure Settings
Select only Target Quantity and Releasd Quantity
Key Figure Settings for Contract Tracking Report

13. Analysis : Contract Life-cycle (2)
Display only your contracts
Edit filter > Contract ID > Created by > You
Contract Tracking Report
Target Quantity VS Released Quantity
Released Quantity : comes from the system calculation, quantity we needed to purchase now.
Target Quantity : Total quantity indicated in the global contract with the supplier.

14. Analysis : Supplier invoices (optional)
Task :
Analyze the invoice development over time (last 14 days).
Data used :
Master data : Suppliers.
Transactional data : Supplier invoices.
Master data : Monitoring supplier invoices (invoice value per supplier and total net value of invoices).
Total net volume of the last 14 days’ invoices
Supplier invoice (net) of the last 14 days per supplier

15. Difficulties encounters & solutions
Research a report
Find the right report.
Confusion with an other one.

16. Resolution – research a report
Difficulties encounters & solutions
Resolution – research a report
Work Center Home => Reports => Show : All Reports.
Know exactly which reports you want (Right title, description).
Check details.
Type the right title.

17. Confusion Rows-Columns (Dimension)
Difficulties encounters & solutions
Confusion Rows-Columns (Dimension)
Make an incomprehensible graph.
Categories Names which overlap.

18. Resolution – confusion Rows-Columns
Difficulties encounters & solutions
Resolution – confusion Rows-Columns
Go to the dimension which is disturbing and click on « Move to Columns/Rows ».
Try until you’re satisfied.
=>

19. Difficulties encounters & solutions Change years
Find the right tab.
Configure correctly.

20. Resolution - change years
Difficulties encounters & solutions
Resolution - change years
Delete the limitation in the tab « Edit Selection » (Last 12 months)
Go to « Edit Filter » and select years which you want in « Invoice Year/Month »

21. Difficulties encounters & solutions Legends
Not easy to find.

22. Difficulties encounters & solutions Resolution – legends
Go to the icon and choose Legends and « check » show Legends

23. Difficulties encounters & solutions Settings Key Figure
Confusion with Dimensions.
Difficult to find it.

24. Resolution – setting key figure
Difficulties encounters & solutions
Resolution – setting key figure
Go to Settings and Select Key figure
Select which Key figures you want to keep

25. KPI (= Key Performance Indicators)
Difficulties encounters & solutions
KPI (= Key Performance Indicators)
How to find it ?

26. Difficulties encounters & solutions Resolution – KPI
Go to Corporate Performance (Work Center) , Key Performance Indicators, open Evaluation Catalog :
Select the right evaluation catalog :
And select the KPI Definition :

27. Question 18 : Formula for thresholds
Difficulties encounters & solutions
Question 18 : Formula for thresholds
Hurry up and arrive at the wrong conclusion
Be careful !
It is not correct.

28. Difficulties encounters & solutions Resolution – question 18
Make the right Calculation :
It means :
80% - (10%*80%) = 72% (Critical Threshold)
80% - (5%*80%) = 76% (Medium Threshold)

29. Real-life example: KPMG
One of the BIG FOUR auditors.

30. Entreprise Performance Management (EPM)

31. What is KMPG’s mission? Define the controls in an ERP.
Test the controls and results.
Analyse the results and deduce the improvements.
Build a strategic plan to implement improvements.

32. Examples

33. Why?

34. Summary Resources used : Data created and used :
ERP system (SAP)
Human resources.
Analytical tools (reports, KPIs, dashboards).
Data created and used :
Master data :
- Products list.
- Suppliers.
Transactional data :
- Contracts
- Purchase orders (and inventory).
- Supplier invoices.
Analytical data :
Report : Material inventories – rolling inventory comparison (inventory evaluation over time).
Report : Purchase order history (invoiced value per supplier)
KPI : Contract spend ratio (% of contract spend)
Report : Contract life cycle (target and releases quantity per contract).
Report : Monitoring invoices (invoice development over time).
Organizational unit affected and roles involved :
Purchasing department (employee and manager)
Key performance indicators (KPIs) :
Contract spend ratio
Total spend per contracts
Released quantity (%) …
Value created :
The supply situation is better known and controlled.
We know what to improve, what are our strength and weaknesses.

35. Do you have some questions ??