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Supplier Management Ameren’s Story Implementing Supplier Lifecycle Management SLM

Supplier Management Ameren’s Story Implementing Supplier Lifecycle Management SLM. 02 OCT 2014. Chris Nelms. About Ameren…. Electric Customers 2.4 Million Gas Customers ~1 Million Service Area 64,000 Sq Mi Generation 10,300 MW Electric System Miles 85,400 Gas System Miles 21,000

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Supplier Management Ameren’s Story Implementing Supplier Lifecycle Management SLM

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  1. Supplier ManagementAmeren’s Story Implementing Supplier Lifecycle Management SLM 02 OCT 2014 Chris Nelms

  2. About Ameren… • Electric Customers 2.4 Million • Gas Customers ~1 Million • Service Area 64,000 SqMi • Generation 10,300 MW • Electric System Miles 85,400 • Gas System Miles 21,000 • Total Assets $22 Billion • Total Revenues $6.6 Billion • Employees ~8,500 • Fully Regulated Presenter Introduction: Chris Nelms leads the operations team charged with the ongoing strategic implementation of processes & systemic changes around the Supply Services Systems & Processes, which include further enablement of electronic supply chain collaboration. A licensed PMP, he holds an MBA and two Bachelor of Science Degrees.

  3. Ameren & Oracle… • Ameren’s Oracle odyssey began in 2003 with two modules – 11.5.7 • 2004 brought in the eCommerce Consultant • 2005 & 2006 the Source to Settle program was conceived and developed • 2006 Sourcing was implemented stand alone and completely vanilla for ~16 users • 2007 S2S was implemented full scale, big bang – 11.5.10 • 2007 Ameren joins Oracle North American Procurement Customer Advisory Board (CAB)Still the only investor owned utility on the CAB

  4. Ameren & Oracle… • DatabaseOBIEE • 10g 2007 10.1 2009 • 11g SEP 2012 11 2011 • HR Analytics APR 2013 • P&SAOCT 2013 • UPK • 3.5 2009 • 11.0 2011 • EBS Applications11.5.7 11.5.10.212.0.6 12.1.3 • Sourcing - 2006 MAY 2009 SEP 2013 • Procurement Contracts -2006 MAY 2009 SEP 2013 • iProcurement 2003 2007 MAY 2009 SEP 2013 • Core Purchasing 2003 2007 MAY 2009 SEP 2013 • iSupplier Portal - 2007 MAY 2009 SEP 2013 • Services Procurement -2007 MAY 2009 SEP 2013 • Accounts Payable - 2007 MAY 2009 SEP 2013 • Accounts Receivable - 2007 MAY 2009 SEP 2013 • CCTM* -2007 MAY 2009 SEP 2013 • Buyer’s Work Center - - OCT 2009 SEP 2013(Complex Procurement) • Hyperion - - DEC 2010SEP 2013 • iExpense - - JUL 2011SEP 2013 • SLM - - - SEP 2013 • General Ledger - - - JUL 2014 • *CCTM: Contractor Cost Tracking Module. Custom bolt on atop Services Procurement to handle recurring services

  5. Ameren & Oracle… Chris Nelms Manager Process & Systems Group Laura Angelo SC Clerk Victor Alarcon Sr Coordinator Kate Minor Sr Coordinator Mike Renieri Bus PerfSpc Tiffany Pallme SC Analyst Kay Cotner SC Analyst Lawanda McGill SC Clerk Melissa Orr SC Clerk

  6. Historical Supplier Situation… Supplier General Maintenance • In 2008 Ameren maintained ~18,000 supplier records • AP Manages the overall supplier record, banking information and the remit-to site(s) • Supply Chain manages the purchasing sites and contacts for each supplier • 2009 manually on-boarded 400 suppliers to iSupplier Portal • 2009 supplier cleanup/purge project – 18K to 10K • No PO’s for past three years - • Nuclear plant specific suppliers exempted • 2012 ALL new suppliers must be registered, trained and on-boarded to iSP • 2013 Exceeded 2000 suppliers on iSP • All manually on-boarded

  7. Historical Supplier Situation… Supplier Insurance Maintenance • 2009 Corporate Project Oversight Committee (CPOC) formed • Insurance requirements were increased in rigor during this approximate time frame • Browz (www.browz.com) was implemented to handle insurance certifications for all services suppliers with =/> $25K annual volume • All other services suppliers were handled manually in MS Access that containing the summary abstraction of the insurance in force for each supplier. • Access DB allowed for single user only • Roughly 5000 services suppliers maintained in Access • Re-certifications tend to be received at CY mid year and year end • Always a backlog of data entry on insurance. Always.

  8. Supplier Addition Process… • Any Requisitioner in any Business Line can request any supplier • No real supplier vetting process in place • Buyers rationalization – Easier to setup than to research • In most cases the new supplier was just added, no questions asked • If a supplier insists on a credit application being completed: • Ameren has no credit department per se • Personal involvement • Hard push back on every request, insisting that due diligence in finding an existing, registered supplier be engaged • If after due diligence we were compelled to add the supplier, we provide a standard response including trade references and other descriptive information about the Ameren • Nothing really discouraging the addition of new suppliers based on request alone • New suppliers crept in incrementally over time

  9. Supplier Lifecycle Management… Supplier Maintenance Costs: This reference from the AMR shocked us: • We didn’t know if this high end cost applied to us • We knew we were not considering the cost of supplier maintenance as such • We knew there were efficiencies Oracle AP and Purchasing by themselves were not addressing “…companies are spending up to $1,000 per supplier annually…however, when information, enabled by technology, becomes visible across the organization, costs per supplier quickly dwindle to below $150 per supplier.” - AMR Research, June 2009

  10. SLM & Supplier Hub… Supplier Lifecycle Management (Process) Managing the Supplier Lifecycle • Supplier Self Service Registration • Supplier Self Service Profile Management • Supplier & Stakeholder Questionnaires • Workflow Approvals Supplier Repository • Consolidate • Data Quality • 3rd Party Integrations • Publish Analytics SCM Proc. AP SCM D&B AP Proc. Managing Data Quality & Integration Supplier Hub (Data & External Connectivity)

  11. SLM… • Supplier Management Designed to… • Reduce the cost/time of managing supplier information • Improve the quality/accuracy of supplier data • Impact these processes • Procurement Centralization • Supply Base Rationalization • Strategic Sourcing • Social Responsibility • Contract Compliance • Risk Mitigation • S2SExecution

  12. SLM… • Spend Analytics • Dashboards • KPIs • Reports/Charts Transactional Data eBusiness Suite • Supplier Hub • Extended Attributes* • De-Duplicates • Merges • Classify Suppliers • Integrate to Legacy & 3rdParty Data • S2S • Contracts • Sourcing • Purchase Orders • Invoices • Etc. • Supplier Lifecycle Management • Extended Attributes* • On-Board Suppliers • Supplier Audit • Supplier Assessment • Supplier Profile Self-Service

  13. Ameren Justification… Functionality Areas Insurance Certification Management • Allows multiple users into the DB simultaneously • Effectively reduces the cycle throughput of maintenance and update by at least half • Justification for entire SLM module was covered by productivity improvements on this single point • In conjunction with extensive supplier search and grouping capability, improves supplier selection and grouping for sending mass actionable eMail notifications Insurance Certification Lookup/Reference • Buyers and Sourcing people no longer rely on worksheet index to determine if valid insurance is in force • They review directly in Oracle with an image of the certificate available

  14. Ameren Justification… Functionality Areas Certification Management • In addition to Insurance which is handled separately, SLM handles these certificate types as well for Ameren: • Abatement (general) certified • Asbestos certified • Health / Environmental certified • Training certified • ASME certified • The certificate area is wide open to accommodate a wide variety of certification management needs and can be augmented later as business needs change

  15. Ameren Justification… Functionality Areas CyberSecurity Certificate Retention • IT developed an elaborate (50+) question CyberSecurity Questionnaire • Use applicable for some IT suppliers only • Approval of CyberSecurity aspect separate from Purchasing/Sourcing approval • SLM will contain the questionnaire as a stand alone attachment only for CS approved suppliers

  16. Ameren Justification… Functionality Areas Supplier Communications & Notifications • Extensive supplier search and grouping capability allowing the user to parse and group suppliers by extensive criteria • Insurance and other certifications are renewable annually • Notifications allows for quick and intuitive build of supplier communication across many possible points

  17. Ameren Justification… Functionality Areas Qualification Management (Supplier Diversity) • SLM engages creates an invitation when users send requests for update out to suppliers • Registered suppliers can then update their information directly on SLM • Diversity takes these qualifications into Oracle via approval workflow • A third party is used to validate supplier qualifications twice per year

  18. Ameren Justification… Functionality Areas Supplier On-boarding • Ground Rules: • Ameren does not expose supplier registration to the internet • Policy is invitation only for new suppliers • Ameren developed a two round supplier approval process: • Round 1 • All eMail based and addresses the vetting of the proposed new supplier against the existing suppliers checking for duplicates • SLM uses fuzzy logic to return lists of suppliers that match based on spelling, address, city, etc. Vetting is quick and accurate • eMail is routed according to CAT code assigned to supplier • CyberSecurity Questionnaire is reviewed (if applicable) • If approved, supplier is advanced to Round 2, if not approved, an existing supplier is used

  19. Ameren Justification… Functionality Areas Supplier On-boarding • Round 2 (Currently under review for improvement) • Supplier is re-contacted by clerks to fully complete their profile online • Supplier added to supplier master by AP • Information augmented by Purchasing • Information certifications are uploaded and approved (if needed) • Tracked certifications are uploaded and approved (if needed) • Supplier diversity qualifications are uploaded and approved (if needed) • CyberSecurity Questionnaire is attached to supplier record (if needed) • Supplier is approved and enabled for use in Oracle.

  20. Ameren Justification… IT Interest Capital Investment • IT keen to implement 12.1.3 • GL to go live on 12.1.3 (JUL 2014) • Fully regulated utility • Rate recovery cases go before state PSC • Capital intensive • Capital expenditure more readily enters rate base • SLM completely new functionality to Ameren • Presence of SLM allowed IT to capitalize the 12.1.3 upgrade of EBS

  21. Ameren Experience… • Upgrade to 12.1.3 • Roughest in our history with Oracle • Underestimated impact at Ameren/supplier user level • One round of testing less than usually done • Many more user impacting problems • PDF forms not working • Purchasing forms functionality not working • Litany of problems, all resolved now, but some took months. • SLM Overall • Difficulty implementing the two round approval loop process • Underestimated the volume of new supplier requests • RFI update form facing suppliers not working properly, intermittent problems • Login problems on supplier end

  22. Ameren Experience… • Insurance Certificates • Functionality worked as planned • Capability to build and run a data load program • Separate from SLM but promising for mass update • Manually entering insurance information • Maintenance is up to date with little if any backlog • Other Certifications • Paper files to convert • Much data entry to accomplish • Online functionality works as expected • Backlog is worked by clerks and also by interns as we hire them for summer, Christmas break, etc.

  23. Ameren Experience… • Supplier Diversity • Promises a large upside for this small user community • Use of supplier facing forms for self update still having problems • CyberSecurity Attachments – OK • Standard attachment dialog used • Notifications preparation and grouping for communications all working as expected • Initially worked as planned. • With the recent RUP’s & switching to Exadata, the functionality is somehow disabled – SR with Oracle filed.

  24. RUP’s… • Comprehensive Roll Up Patches were implemented spring and early summer 2014. • Extensive testing was done • Exadata servers were implemented • Oracle General Ledger went live • SLM suffered some technical and process setbacks as a result of this implementation • We re-evaluated the two cycle process and eliminated the initial supplier contact for supplier update. This would’ve happened regardless. • Supplier grouping and eMail function was somehow disabled around the time Exadata became part of the topology. An SR with Oracle was created.

  25. Questions…? Chris Nelms cnelms@ameren.com M: 314-303-5365

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