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CERN Farnell collaboration: an e-procurement success story

CERN Farnell collaboration: an e-procurement success story. James Purvis CERN. 1954. 2006. 50 years of CERN. Physics. Administrative Computing. The challenge at CERN. Build the worlds largest scientific instrument… LHC Project : 3bn CHF project, 11,000 workunits, 200 Companies,

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CERN Farnell collaboration: an e-procurement success story

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  1. CERN Farnell collaboration:an e-procurement success story James Purvis CERN

  2. 1954 2006 50 years of CERN Physics AdministrativeComputing

  3. The challenge at CERN Build the worlds largest scientific instrument… • LHC Project : 3bn CHF project, 11,000 workunits, 200 Companies, • Experiments : 146 institutes, 33 countries • Contract Management, Workflow, e-business, safety, admin, customs procedures... • Increased Expectations with Reduced Resources

  4. The tools at CERN Frequently Asked Questions on WWW FREQUENTLY ASKED QUESTIONS ON W3 An FAQ list is really a cop-out from managed information. You should be able to find everything you want to know by browsing from the WWW project page, as everything should be arranged in a logical way. Here though are things which maybe didn't fit into the structure, with pointers to the answers which maybe did. Its an experiment, started May 92. The questioners are anonymous. I am just starting: how do I find out more?[1] How does www keep track of the available servers?[2] How does W3 compare with WAIS and Gopher[3] ? How do I create my own server[4] ? 1-10, Up, <RETURN> for more, Quit, or Help:

  5. delivery Goods Reception User request workflow order Qualiac EDH Purchasing invoice authorise Finance Budget Holder instructions Lifecycle of an order

  6. delivery picking User request workflow Baan EDH stores authorise order Finance Budget Holder Lifecycle of a stores request invoice

  7. The Double Edged Sword ofElectronic Purchasing • Observations • Staff numbers decreasing, yet purchase orders increasing • Population creating purchase orders doubled in last 10 years, • Now 80% of organisation initiates purchase orders • Number of high-cost, low value purchase orders doubled • 90% of purchase orders are considered ‘low value’ • Pareto rule : 20% of our suppliers held 80% of business • Web ubiquity - Double-edged sword • Everything you need is on web • Everybody becomes a purchase officer with a few mouse clicks If we can streamline the entire procurement channel with one supplier, we can provide a blue-print for major procurement cost-savings with others.

  8. Value Administrative Cost Goal • Speed • <24 hour delay • Efficiency • Efficiency of “bulk” low-overhead processes • Cost • Low cost administrative procedure • Zero stock • Best price • Empowerment • Flexibility of ‘free-text’ purchasing • Freedom & Diversity of full procurement channels • Freedom of buying via supplier internet catalogues • Control • Purchasing rules enforced • Non-standard equipment purchases High Value / Low Cost High Value / High Cost Low Value / Low Cost Low Value / High Cost

  9. <24 h delivery 1998 FarnellClassification CERN Classification 1st collaboration (2002-4) XML file CERNCatalogueDatabase

  10. Strengths 40,000 articles “Virtual Stores” Fully electronic messaging Weaknesses 2 years Prices / Product data volatility Mapping & classification effort Limited product range Poor search facilities Opportunities Catalogue core competencies e-marketplaces & standardisation Threats ROHS Web ubiquity Results

  11. 2nd Collaboration (2005)

  12. 2nd Collaboration (2005)

  13. 2nd Collaboration (2005)

  14. 2nd Collaboration (2005) ********

  15. 2nd Collaboration (2005)

  16. 2nd Collaboration (2005) XML Order

  17. 2nd Collaboration (2005)

  18. Technology

  19. Results

  20. Results 2006 2005 80,000 Free-text 70,000 Catalogue 60,000 50,000 40,000 30,000 20,000 10,000 January February March April May

  21. Scope 170,000 articles CERN negotiated prices CERN agreed product ranges Data up-dated every 2 hours. Stock info on-line Monthly catalogue updates (e.g. ROHS) Savings Lower administrative costs Recuperate VAT No marketplace. No transaction fee Monthly invoicing No detailed item classification, just product range agreements No duplicate data entry Almost no free-text orders Efficiency Completely standards based UNSPSC codification cXML messaging & ordering Monthly invoicing Leverage power of Farnell’s catalogue search Control Product ranges Catalogue content Workflow Benefits

  22. Future • Blueprint for other business areas in CERN • Blueprint for other enterprises EPFL, UBS, Geneva State, WHO… • Collaboration is ongoing • Multilingual capabilities • Usability testing • Beta testing

  23. Closing Thoughts “If you don't know where you are going, any road will get you there.” Lewis Carroll, Alice in Wonderland

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