Course Breakout Exercises

1. Course Breakout Exercises

2. Exercise Scenario • Participants break up by table into 3 groups of consultant teams, each assisting one of the three clients below: • Each group will apply the workshop material to prioritize PTP and OTC transactions for their clients. This will emphasize the benefits of eEnabling processes, the complexities of making eDecisions, and importance of collaboration. • The customer is an industrial customer – and is not an end consumer. • The distributor only operates in this “industry”. The distributor nets receivables and payables with the refiner/producer. • Sometimes the refiner/producer utilizes product from the distributor to provide products to the customer. • For the first three exercises, each team will work on its own. The last exercise will be facilitated to ensure collaboration between the teams. Refiner/ Producer Customers Distributor

3. Exercise Setting • Each table is consulting to either a customer, distributor, or direct product manufacturer • Applicable industries: lubricants, petrochemicals, refined products • Industry economic model • Customer buys some product directly from the manufacturer, but also buys from distributor • Customer has multiple locations across the US to deliver to, each with different product needs • Distributor is at times a customer, and competitor of the manufacturer • Sometimes the distributor delivers product to customers on behalf of the manufacturer • Distributors offer some locations that are more economic to store product • Each team represents the consultants to the company • Deliverables developed are to be completed from a consultants point of view • Each “client” is beginning to think about the e-enablement of its order to cash, and procure to pay business processes • No eEnablement has occurred between any of the three companies • No common data or document industry standard exists to receive or send information (other than EDI) • Each exercise will take 45 minutes. Each team will have 25 minutes to create a deliverable, and then each team will have 5 minutes to present its findings on the provided flip charts. A 5 minute class wide review at the end of each exercise will reinforce key concepts and issues.

4. Exercise 1 Purpose: Each consulting team will develop a material catalogue for the exercise items. Each team will study the exercise items provided, name each, and develop and assign common material characteristics to each item. The exercise will highlight the differences in approach of each of the teams. Deliverable: Each team will build the following table on a flip chart. • Each consultant team works on its own. No conversations with the other teams. Items can be picked up for further analysis. • Not all attributes will apply to all products

5. Exercise 2 – ePTP Exercise Documents All documents are created by the purchaser. These documents are only created by either the customer, or the distributor. For the purpose of this exercise, the refiners/producers material needs are not to be considered. These documents flow left to right between the industry participants Documents • Material Requirements Plan – provide future planned needs • Price Acceptance Notification – confirms prices sent by suppliers • Purchase Order • Receipt Acknowledgement – sent to supplier to confirm shipment arrived • Payment Notification • Order Status requests • Inventory Availability Requests

6. Exercise 2 – Manufacturer ePTP Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the procure to pay processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7 procurement process documents. Prioritize the documents in the order you would want to receive them from either the customer or distributor. • Consider the importance of industry data standards? Which documents on the list require standards? • Manufacturer Considerations: • What role/input would be best for the manufacturer to have in e-enabling these processes/documents? • How much leverage does the manufacturer have with the: • Distributor • Customer • What are the desired outcomes from a manufacturers perspective? • Are there any differences required in how the manufacturer deals with the customer, or with the distributor? • What role will the manufacturer play in defining industry data standards, if required? • Deliverable • On one flip chart page, rank each document from 1 to 7. • Note if the prioritization is different if it comes form the customer vs. the distributor. Provide this prioritization if it is different. • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide an overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

7. Exercise 2 – Distributor ePTP Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the procure to pay processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7 procurement process documents. Prioritize the documents in the order you would recommend them to be e-enabled considering: • What you want to receive from the customer • What you want to provide the refiner/producer • Consider the importance of industry data standards? Which documents on the list require standards? • Distributor Considerations: • How important is consistency in processes? • Can the distributor provide greater value added in servicing the customer for the manufacturer? • How does the distributor manage the needs of improving customer service to its customer vs. the customer of the manufacturer? Are both really customers? • What role will the distributor play in defining industry data standards, if required? • Deliverable • On one flip chart page, rank each document from one to 7. Also provide a second column on if industry standards are required for each document. • Consider what value you place next to receiving these documents from the customer, and sending these documents to the refiner/producer in your recommendation • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide a overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

8. Exercise 2 – Customer ePTP Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the procure to pay processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7 procurement process documents. Prioritize the documents in the order you would recommend them to be e-enabled, from the standpoint of what information you can provide to the refiner and the distributor that adds the most value to the customer. • Consider the importance of industry data standards? Which documents on the list require standards? • Customer Considerations: • How much leverage does the customer have over the manufacturer and distributor? • Can the customer set the priorities of what gets developed first? • What role will the customer play in defining industry data standards? • Deliverable • On one flip chart page, rank each document from one to 7. Also provide a second column on if industry standards are required for each document. • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide an overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

9. Exercise 3 – eOTC Exercise Documents All documents are created by the seller. These documents are only created by either the refiner/producer, or the distributor. For the purpose of this exercise, the customers sale order process is not considered. These documents flow right to left between the industry participants Documents • Sales Order • Sales Order Change - notifies purchaser of changes to sellers sales orders • Price Change Notification – notifies purchasers of changes in prices offered • Invoice • Seller Shipping Arrangements – Tenders – confirms planned arrival time • Bills of Lading • Sales Order Status – on demand

10. Exercise 3 – Manufacturer eOTC Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the order to cash processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7 sales order to cash process documents. Prioritize the documents in the order you would want to provide them to either the customer or distributor. • Consider the importance of industry data standards? Which documents on the list require standards? • Manufacturer Considerations: • What role/input would be best for the manufacturer to have in e-enabling these processes/documents? • How much leverage does the manufacturer have with the: • Distributor • Customer • What are the desired outcomes from a manufacturers perspective? • Are there any differences required in how the manufacturer deals with the customer, or with the distributor? • What role will the manufacturer play in defining industry data standards, if required? • Deliverable • On one flip chart page, rank each document from 1 to 7. • Note if the prioritization is different if it is sent to the customer vs. the distributor. Provide this prioritization if it is different. • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide an overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

11. Exercise 3 – Distributor eOTC Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the order to cash processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7order to cash process documents. Prioritize the documents in the order you would recommend them to be e-enabled considering: • What you want to provide to the customer • What you want to receive from refiner/producer • Consider the importance of industry data standards? Which documents on the list require standards? • Distributor Considerations: • How important is consistency in processes? • Can the distributor provide greater value added in servicing the customer for the manufacturer? • How does the distributor manage the needs of improving customer service to its customer vs. the customer of the manufacturer? Are both really customers? • What role will the distributor play in defining industry data standards, if required? • Deliverable • On one flip chart page, rank each document from one to 7. Also provide a second column on if industry standards are required for each document. • Consider what value you place on providing these documents to the customer, and receiving documents from the refiner/producer in your recommendation • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide a overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

12. Exercise 3 – Customer eOTC Exercise Purpose Each consulting team assists their client in determining how to proceed with e-enablement of the order to cash processes. Consultants provide: • advise on the prioritization of e-enabling documents • a recommendation on how involved to get in the defining of industry data standards • An estimation (L,M,H) of the leverage their client has in e-enabling these processes. • General Questions: • Review the list of 7 order to cash process documents. Prioritize the documents in the order you would recommend them to be e-enabled, from the standpoint of the value of the information received from the refiner/producer and the distributor that adds the most value to the customer. • Consider the importance of industry data standards? Which documents on the list require standards? • Customer Considerations: • How much leverage does the customer have over the manufacturer and distributor? • Are there different priorities depending on who the document is received from? • Can the customer set the priorities of what gets developed first? • What role will the customer play in defining industry data standards? • Deliverable • On one flip chart page, rank each document from one to 6. Also provide a second column on if industry standards are required for each document. • Below the table listing the document priorities: • Provide a yes or no recommendation on whether your client should participate in the defining of industry data standards. • Provide an overall H, M, L estimation of the leverage your client has in effect the e-enablement of these processes.

13. Exercise 4 – Collaboration/Wrap-up Exercise Purpose: All the previous exercises have centered on each consulting team and “client” determining what it does on its own. The purpose of this exercise is to bring the groups together to see how differently they will work through some of these solutions if they work together. What information is considered so sensitive that it can’t be shared? All three industry companies decide to create a public e-market First 20 minutes: How to identify the highest priority documents, and therefore processes, to place on the public e-market. Use the prioritization of each of the three teams document rankings as input. Second 20 minutes: • Discuss the obstacles that exist in moving this e-market forward • Where will master data be housed? • How much information is each company comfortable sharing? • What types of processes must be put in place to accept e-enabled document receipt? Last 5 minutes • What will be the future role of the distributor? • Will distributors get squeezed as processes become more e-enabled?