The Evolution of an E-Catalog Program
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1 The Evolution of an E-Catalog Program Halliburton Kees Wijnstekers Manager, Purchase-To-Pay Processes Perfect Commerce Hamp Wall CEO & President
2 About Perfect Commerce World-class END-TO-END sourcing and procurement solutions to the enterprise and public market sectors. Provides the broadest global reach and deepest global capabilities of any independent provider. Is the trusted solution used by more than 1.3 million users in over 100 countries, 18 languages, and 50 currencies. Owns and operates the world s single largest independent supplier network, with over 500,000 suppliers. FAST FACTS Founded as Commerce One in 1994 Over 300 customers and 500,000 suppliers 99% retention / renewal rate since % uptime
3 Evolution of an e-catalog Program Kees Wijnstekers Halliburton Manager, Purchase-To-Pay Processes Hampton Wall Perfect Commerce President & CEO
4 Agenda Safety Moment Personal Introduction Company Overview Early Catalogs Collaboration with Perfect Commerce Lessons Learned 2014 HALLIBURTON. ALL RIGHTS RESERVED. 4
5 Safety Moment 2014 HALLIBURTON. ALL RIGHTS RESERVED. 5
6 DID YOU KNOW SOMETIMES THE MOST IMPORTANT WORK YOU CAN DO IS TO STOP WORKING. If you re working and you see a process that is not being followed correctly, or if you notice at-risk behavior going on, take the initiative and call a quick time-out. Then confer with your workmates to make sure everyone knows the safe way to continue. Executing Stop Work Authority to right safety wrongs and catch potential unsafe action before it actually happens is not only responsible, it s also effective. In fact, in the oil and gas industry, it s been one of the most successful approaches to safety in the last decade. Empower the people around you. Encourage them to watch for unsafe conditions or processes, and when it s necessary, stop the job until it can be done safely. At Halliburton, solving customer challenges is second only to keeping everyone safe and healthy. You can find more safety tips at Safety Moment Subject suggested by: Brent Johnson, Halliburton Employee 2014 HALLIBURTON. ALL RIGHTS RESERVED. 6
7 Personal Introduction 2014 HALLIBURTON. ALL RIGHTS RESERVED. 7
8 Introduction Kees Wijnstekers With Halliburton for 27 years Geologist by training Approx 6 yrs in field operations, 11 yrs in operations management and 10 yrs in supply chain Manager Purchase-to-Pay Processes E-Catalog program P-Card Program Supplier Portals Process infrastructure for Services Procurement 2014 HALLIBURTON. ALL RIGHTS RESERVED. 8
9 Halliburton Provides Products and Services to the Oil & Gas Industry Founded 1919 Employees Over 80, Nationalities Operational Countries 80 Research Centers 15 Halliburton Locations Halliburton Headquarters Halliburton Research Centers Corporate Headquarters Houston Dubai 2014 HALLIBURTON. ALL RIGHTS RESERVED. 9
10 Procurement Structure VP- Procurement & Materials P&M Director W. Hemisphere Global Director Field Direct & Indirect Cats Global Director MFG Cats Global Director Performance Mgmt P&M Director E. Hemisphere Americas Panama BSC Duncan BSC 6 Field Direct Cats 4 Indirect Cats 5 Cats 19 MFG Plants Europe/SSA ME/Asia Dubal BSC KL BSC Mgr Sourcing & Contracts Mgr Purchase to Pay Proc. Mgr Business Controls BSC : Business Support Center SSA : Sub-Saharan Africa KL : Kuala Lumpur MFG : Manufacturing Cats : Categories E-Catalog Program 1 Person 2014 HALLIBURTON. ALL RIGHTS RESERVED. 10
11 2014 in Numbers Approx $20B in spend with External Suppliers Purchase Orders issued to approx 35,000 vendors Payments made to approx 30,000 vendors Approx 75% PO and 25% FI Approx 50% goods and 50% services 900K External PO s and 300K Internal PO s with a combined total of >3M PO lines 5 Largest categories (accounting for 38% of spend) are Sand & Proppant Specialty Chemicals Drilling Fluids Oilfield Tools & Services Machining 2014 HALLIBURTON. ALL RIGHTS RESERVED. 11
12 Overview In 2007 Halliburton created the first catalogs which used a supplier website In 2012 Halliburton and Perfect Commerce entered into an agreement to deploy hosted catalogs In 2014 Spend through e-catalogs was $86M This was only 0.4% of spend However, there were 126,000 e-catalog PO s This accounted for 14% of PO s Traditional PO cost of $37.32 vs E-Catalog PO of $9.18 yields a benefit of approx $3.54M Compliance with contracted pricing yields a benefit of approx $1M 2014 HALLIBURTON. ALL RIGHTS RESERVED. 12
13 Typical Purchase-to-Pay Process Start Requisitioner enters descriptive requisition Requisition Approval Buyer interprets requisition Buyer sources requisition & confirms price HAL Receives Goods Vendor Ships Goods Vendor interprets HAL PO Buyer makes & sends SAP PO End Vendor creates Invoice for HAL Vendor mails Invoice to HAL Halliburton AP enters invoice Vendor Gets paid 2014 HALLIBURTON. ALL RIGHTS RESERVED. 13
14 Typical Purchase-to-Pay Process Start Requistioner User enters descriptive requisition Requisition Approval Buyer interprets requisition Buyer sources requisition & confirms price HAL Receives Goods Vendor Ships Goods Vendor interprets HAL PO Buyer makes & sends SAP PO End Vendor creates Invoice for HAL Vendor mails Invoice to HAL Halliburton AP enters invoice Vendor Gets paid 2014 HALLIBURTON. ALL RIGHTS RESERVED. 14
15 PtP Process using e-catalog Start Selects Item(s) from Catalog Requisition Approval Auto PO Sent electronically Vendor Ships Goods HAL Receives Goods Vendor creates Invoice for HAL Invoice Sent electronically End Vendor Gets paid Numerous steps are eliminated which require touch time and/or decision/interpretation 2014 HALLIBURTON. ALL RIGHTS RESERVED. 15
16 Early Catalogs 2007 to HALLIBURTON. ALL RIGHTS RESERVED. 16
17 Catalog Type and Count Punch-Out Only US Only Large Suppliers only Limited no. of users Wanted to expand program in terms of suppliers and users Grew to 34 Hosted catalogs RFQ New Structure initiated Agreement with Perfect Commerce Completed Specifications & Functional Design Had 6 Hosted Catalogs 2014 HALLIBURTON. ALL RIGHTS RESERVED. 17
18 Business Support Centers used as hubs Eurasia, Middle East Europe & Sub- Saharan Africa BSC. Dubai North America BSC, Duncan OK Asia-Pac BSC, Kuala Lumpur Latin America BSC, Panama 2014 HALLIBURTON. ALL RIGHTS RESERVED. 18 VP of Procurement cited e-catalogs as a key initiative for 2014 and made BSC s accountable
19 Put a support structure in place LA-BSC (Panama) SuperUser Venezuela SuperUser Argentina SuperUser Brazil SuperUser Mexico PtP e-catalog Team (Houston) ME / ESSA / Eurasia BSC (Dubai) NA BSC (Duncan) SuperUser Russia SuperUser Egypt SuperUser UAE SuperUser Saudi SuperUser US N SuperUser US S SuperUser Canada SuperUser Gulf Coast Vendors and End- Users SuperUser Sing. AP BSC (KL) SuperUser Indonesia SuperUser Australia SuperUser China 2014 HALLIBURTON. ALL RIGHTS RESERVED. 19
20 2014 Developed Roles and Responsibilities PTP e-catalog Team BSC Super Users Country Super Users End Users Overall System Design System Maintenance & Management Catalog Configuration Interaction with Perfect Commerce High-Level Reporting System Security Support BSC s with the above Deploys Catalogs Maintains Catalogs Identify & prioritize opportunities at Regional Level Collect and provide Configuration Data to PTP Catalog Team BSC Level reporting Support Super Users Train suppliers & End Users Identify and prioritize Opportunities at Country Level Collect and provide configuration data to BSC Manage catalog updates/changes with BSC Ensure catalogs are used. Support End Users Use the Catalogs Identify new opportunities Provide feedback to Super Users Support suppliers 2014 HALLIBURTON. ALL RIGHTS RESERVED. 20
21 2014 Halliburton & Perfect Commerce Roles Halliburton Perfect Commerce Identifies Catalog opportunities Provides introduction to suppliers Provides front end support Reviews and approves content Monitors usage Provides hosting infrastructure Provides appropriate templates Manages supplier onboarding Provides supplier training Provides technical support Collaborates to expand scope Identifies areas for improvement 2014 HALLIBURTON. ALL RIGHTS RESERVED. 21
22 2014 Ongoing Management & Monitoring Provided general guidance on candidate selection Developed an Opportunity Assessment as a go/no-go check Developed a detailed Playbook for catalog creation How to guide for super-users and end-users Created a simple & user-friendly e-catalog web page with necessary resources Set a goal of Zero to Live in 30 days Generated monthly reports of catalogs generated and catalog utilization Encouraged competition between BSC s Questioned low usage to assess root cause and take corrective action 2014 HALLIBURTON. ALL RIGHTS RESERVED. 22
23 Current Scope 41 Countries Over 40 Product Categories Abu DhabiNorway Corporate Bearing, Bushing, Spring Kuwait Germany Branding MRO Filters Rolling Real Estate Algeria Fab & Weld Stock New Zealand Russia China - Furnitures Angola UK Cement Fleet Mined Fueling Egypt India MRO Kurdistan Thailand General Products Machining AzerbaijanMexico Hydraulic Tires Hose & Telecommuni Argentina Singapore Fittings Iraq Indonesia Electro-MechIndustrial Promotional cations Qatar Australia Parts Gases Prod IT Hardware Drilling Motors Colombia Libya Belguim General supplies Brazil Vehicle Repair Saudi Arabia Food Ecuador Lubricants/Gre BoliviaMalaysia Services USA Italy Office ases MRO Paint Peru Brunei Phillippines Canada Supplies PPE,Safety,Coverall 2014 HALLIBURTON. ALL RIGHTS RESERVED. 23
24 Barriers to Overcome These are not commodity items which can be bought online Pricing is complicated, it depends on origin, destination and MOT It is hard to find stuff Sometimes they are but if they are not, we can build a custom catalog which fits the business needs of buyer and seller If it can be tabulated, we can make it in to a catalog We will require classification of products using UNSPSC and will encourage use of standard descriptors 2014 HALLIBURTON. ALL RIGHTS RESERVED. 24
25 Barriers to Overcome We buy a lot of services can we have a catalog for these? Materials are managed through MRP Yes, but we need to modify business rules and field mapping to permit generation of PO s for services instead of products Difficult to resolve as it depends on specific local needs. Need to ensure that the correct business decision is made 2014 HALLIBURTON. ALL RIGHTS RESERVED. 25
26 Next Steps With the program well established, push processes from Corporate to Regional BSC and from Regional BSC to Country. Corporate to lead on new functionality Inclusion of Services (Service Req Service PO Service Entry Sheet) Enhanced classification of products using structured attributes Push the envelope on what is considered suitable for a catalog Different products Pricing scenarios Logistics scenarios Internal catalogs etc 2014 HALLIBURTON. ALL RIGHTS RESERVED. 26
27 Lessons Learned Get Executive sponsorship and support Identify Super-Users in the procurement structure Ask for volunteers rather than appoint people Train Start with easy : Office Supplies, Safety Wear, MRO Super-Users to identify project pipeline Understand and meet business needs Measure and Report Understand and address gaps Use Plan-Do-Check-Act to expand and grow program scope 2014 HALLIBURTON. ALL RIGHTS RESERVED. 27
28 Halliburton Overview 2014 HALLIBURTON. ALL RIGHTS RESERVED. 28
29 Contact Information: Hampton Wall Perfect Commerce CEO & President Kees Wijnstekers Halliburton Manager, Purchase-To-Pay Processes
30 Evaluation How-to: Why? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing How? Option 1: App 1. Select Schedule 2. Select Schedule by Day 3. Select Day 4. Select Session 5. Scroll to Description 6. Click on the Evaluation link Option 2: Browser 1. Go to 2. Select Workshop (#17) Complete and submit!
31 Workshop # 17 The Evolution of an E-Catalog Program Speakers: Hampton Wall Perfect Commerce CEO & President Hamp.Wall@perfect.com Kees Wijnstekers Halliburton Manager, Purchase-To-Pay Processes Kees.Wijnstekers@HALLIBURTON.com bit.ly/downloadameliaapp Tweet using: #SIGspring15
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Table of Contents Executive Summary 29
Contents Table of Contents Executive Summary 29 Section 1: Introduction 33 Section 2: World 37 2.1.1. Main consumers 37 2.1.2. Main producers 2015 and 2016 39 2.1.3. Main importers 2015 and 2016 40 2.1.4.
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