Supply Chain Management for Food and Agriculture – Software Platforms and Functionality

1. Improve Cost, Efficiency, and Quality through Supply Chain Management IT Integration Supply Chain Management for Food and Agriculture – Software Platforms and Functionality Cristian Herghelegiu, PMP, Partner Account Manager, Micosoft Romania 01 November 2006 - Bucharest Regional Competitiveness Initiative

2. Agenda • Agribusiness - Key challenges • Typical Supply Chain Management (SCM) • SCM selected benefits • Microsoft Dynamics solutions • Summary & Actions…

3. Agribusiness players • Producers & Vendors (small, medium and large) • Fruits and vegetables • Meat Industry • Milk industry • Beverage • Integrated companies (meat, alcohol) • Technology level (or absence) • Standards lacks, raw materials quality • Sales/Purchase Prices • Purchase price (pressure on vendors)

4. Agribusiness key challenges • Competition at all levels; • Operational margins – operational; • Prices (sales); • Standards and regulations– ability to sell in further context; • Level of investment; • Human resources! • Business Control!

5. What customers want*? • Precision • Accesibility • Partnership • Consultancy *Gallup research

6. Globalisation Competition Standards Customer requests Technological Evolution Business results Challenges

7. Priorities Innovative products and services Customer relationship excellence Operational excellence Cost reduction Suppliers relationship excellence

8. How to hit priorities? • Business Acumen and vision! • Business tools to allow and support: • Focus on main business and not on operations; • The best operational pattern; • Business Agility; • Affordable costs (ROI, TCO); • Easy adoption by the team (training time, operational cost); • Easy to support (integrated with the rest of platform);

9. Short definition of SCM • Supply-chain management simply refers to the management of the entire set of production, distribution, and marketing processes by which a consumer is supplied with a desired product. “…a set of interdependent companies that work closely together to manage the flow of goods and services along the value-added chain of agricultural and food products, in order to realize superior customer value at the lowest possible costs” *. Folkerts and Koehorst, Challenges in international food supply chains: vertical co-ordination in the European agribusiness and food industries. British Food Journal, 100, 385–388.

10. Typical Supply Chain

11. Operational effectiveness • Many aspects of SCM, are efforts to improve the operational effectiveness of a chain: • improved logistics, shared information systems, better information flows, reduced transaction costs, preservation of product quality, standards and integrity throughout the chain; • Important in matching competitors; • Increasingly SCM becomes necessary condition for access to certain markets (export markets, supplying to supermarkets); • Will not guarantee a sustainable competitive advantage.

12. Basis Of Competition The Past ... The Future ... Product versus Product Supply Chain versus Supply Chain

13. Supply Chain Benefits Manufacturing Distribution Retail Consumer

14. Why SCM? – a vision at least… • Sales forecasting • Purchase planning | stock replenishment • Capacity planning • Capacity Load (resource allocation) • Minimize inventory (to Just in time) • Time to market • Delivery cycle and Logistics • Overall: cost reduction, higher return on invested capital, higher turn over… higher profitability

15. 6 keys for successful SCM • Recent studies of supply chains in Australia identified six key principles of successful SCM (AFFA et al. 2002): • focus on customers and consumers; • the chain creates and shares value with all its members; • making sure the product fits the customers’ specifications; • effective logistics and distribution; • an information and communication strategy that includes all chain members • effective relationships that give leverage and shared ownership.

16. Benefits of Supply Chain Planning • Competitive advantages due to a greater quality of service, shorter throughput times and cost savings. • Lasting increase in customer satisfaction due to increased delivery reliability and increased ability to respond. • Reduced costs due to minimization of warehouse stocks and more efficient resource planning. • Increased efficiency due to assisted decision-making (planning algorithms, simulations) and alert functions.

17. Benefits of Supply Chain Controlling • Reduced costs as problems in the supply chain are recognized and the appropriate measures set in motion early on. • Lasting increase in customer satisfaction due to increased transparency and ability to react. • Increased efficiency due to the optimal coordination of all supply chain processes. • Competitive advantage due to the systematic recording and controlling of the complex relationships in the supply chain network.

18. Microsoft Dynamics CRM Microsoft Dynamics NAV Microsoft Dynamics AX „Microsoft Green“ Revolutionizing Midmarket Productivity • Productivity, from each entity to whole organization • Empowerment: simple access to business vital information • Expertise

19. Integrated solutions Enterprise Resource Management Enterprise Resource Management (ERP) Categorii de solutii: Enterprise Reporting, BI, KPI Categorii de solutii: Financiar, Resurse Umane, Salarii, Mijloace Fixe Analytics Supply Chain Management Customer Relationship Management Customer Relationship Management (CRM) Categorii de solutii: Automatizarea lanţului de aprovizionare Gestiune, Stocuri, Automatizarea serviciilor Business Operations (SCM) Categorii de solutii: Automatizarea vanzarilor, Marketing, Service

20. The Breakthrough

21. The Strategy Microsoft Dynamics

22. Significant Investment In Business Applications 23 years in business applications 9,300 partners Over 298,000 customers worldwide* * Includes Microsoft Dynamics, Microsoft FRx, Microsoft Forecaster, Microsoft Retail Management, Microsoft Small Business Financials and C5 customers

23. Finance Operations Sara, CFO Benjamin, Marketing Sales & Marketing Kevin, Account Mgr. Julia, Systems Karl, Logistics IT Penny, Payroll Inga, Purchasing The Challenge

24. Why Microsoft Dynamics?

25. Familiar Look & Feel All level integration with Microsoft Outlook Role based “Very few know how many verifications and what work is required within the payment process." Beyond The 2005 Releases April

27. Platform integration Secure the investment in technology

28. Trusted decisions The right information, at the right time and in the right format

29. Military vehicles Patent Lawyers Municipa-lities Relief Orgs Private Schools Pharma-cies Restau-rants Physi-cians Vertical Motor Vehicles Specialty Retail Law Firms Hospita-lity Govern-ment Not-for-Profit Educa-tion Health-care Core Manu-facturing Core Retail Core Distribution Core Professio-nal Services Core Public Sector Core Financial Management CRM SCM Analytics Specializare/Verticalizare • Retail • Transport şi Logistică • Producţie • Discretă • De proces • High Tech • Modă • Utilaje • Alimente, Băuturi, Tutun • Componente electrice şi electronice • Sisteme de calcul • Mobilă • Distribuţie • Alimente & Băuturi • Produse de consum • Produse industriale • Servicii • Financiare – Leasing, Asigurări • IT - Computer & Software • Management & Consultanţă • Închirieri • Dealership Auto Focus pe industrii • Microsoft Dynamics – platforma ideală pentru verticalizare • Sute de soluţii disponibile în prezent • Flexibilitate pentru partener – valoare adaugata pentru client • Productivitate pentru partener

30. Management financiar pentru intreprinderi mici • Managementul firmelor de retail si POS • Managementul contactelor, contabilitate si servicii online, integrate in pachet cu Microsoft Office Portofoliul Microsoft Dynamics in Romania • Suita de aplicatii pentru managementul firmelor si institutiilor incluzand functionalitati de management financiar, SCM, CRM si planificare si control bugetar • O suita CRM completa  incluzand automatizarea fortei de vanzari, marketing si managementul contractelor de service

31. Microsoft Business Solutions Produse, Branding, Marketing Suport & Metodologie Vânzări, Informaţii de piaţă BirouMBS local Localizare, Produs & Marketing local Suport, Certificare şi training pentru parteneri Vânzări, Informaţii de piaţă Reţea de parteneri Analiză, Design, Configurare, Dezvoltare, Implementare, Training Suport Vânzări, Informaţii de piaţă Clienţi Model de Business Indirect

32. Conclusions • In new agro-industry development, building a supply chain has been demonstrated to be just as critical to the success of the industry as establishing adequate agronomic and pest-management practices; • Microsoft Dynamics offers the integrated solution in order to optimize the operational, financial and customer and supplier related operations.

33. Actions • Contact us at: • www.microsoft.com/dynamics • Contact us and our partners at: • www.microsoft.ro/dynamics

34. cristian.herghelegiu@microsoft.com