PowerPoint Presentation by gddmZl


									EDI Future Environment Initiative
         Project Kickoff

   Corporate Information Technology
Project Review
The purpose of this presentation is to (1) review the current architecture and processes
involved with the processing of Electronic Data Information at Canon USA, (2) analyze
B2B market trends and customer-driven initiatives, (3) and review potential future
solutions for conducting EDI transactions.

                       Presentation Contents
   Project Goals and Phases
   Review of Canon’s EDI System and Processes
   Customer and Market EDI Initiatives
   Proposed Future EDI System and Alternatives
   Review of Potential Vendor Solutions
                                      Project Goals

             Key Business Goals

   Improve response time to customer EDI requests
   Expand EDI Transaction Types
   Reduce Manual Business Transactions
   Reduce EDI Processing Errors and
   Reduce EDI expenses and Manual Intervention
   Develop flexible and scalable B2B infrastructure
                                                    Project Goals
• Short Term Goals
• Complete existing 810 & 850 transaction requests from Customers
• Evaluate current EDI Business Processes and systems
• IT to work proactively with CIG Sales Administration to improve
  communications with customers

• Action Items
• Review current customer requests and schedule meetings with IT/SA
• Document current EDI business processes and designate areas for
• Set goal of completing open 810 & 850 requests by March 31, 2005
• Establish new IT Liaison between for external communications with
                                                       Project Goals
• Long Term Goals
• Completely overhaul the existing EDI platform moving to a new
  streamlined solution that will allow for flexibility and scalability with B2B
• Provides opportunity to increase communication channels for EDI
  transactions and increase response to industry and customer initiatives

• Action Items:
• Develop new B2B strategy across the organization
• Consolidate two EDI platforms into one cohesive EDI platform
• Implement improved e-commerce B2B platform to better serve customer
  needs and reduce EDI operating expenses/increase cash flow
• Restructure EDI business processes to provide improved internal and
  external communication as well as reduction in time to complete customer
  transaction requests
                                                                        Project Goals

                                    Project Phases

      Project                               Project                              Project
     Definition                             Design                                Pilot

Vendor Criteria/Proposals          Vendor Evaluation/Selection        Installation of Production Environment
Document Internal Processes        EDI Process Reconstruction         Develop Pilots in new environment
Survey Customer B2B Capabilities    Update EDI Documentation          Configuration of B2B Environment
Review Canon’s B2B capabilities    Develop On-Boarding Kits           Conduct CRP/ Support Programs
Develop B2B Alternatives           Installation of Test Environment   Resolve Issues with new system(s)
Current EDI Issue Resolution       Construct Customer B2B Pilots      Develop Go Live Plan/Cutover Strategy
                            EDI Market Overview

             EDI Market Trends
EDI revenues forecasted to be
 $2.1 billion by 2006
US-based transaction value estimated
 to exceed $3.2 trillion
EDI transactions primarily utilize a VAN (Value
 Added Network)
EDI can now be transported over Internet-
 based communications (XML, etc.)
                                    Current EDI System

CIG EDI Transactions by Business Unit

          EDI Transactions (% of Sales)

                          Printer    ISG (B)
                           85%        94%

      Camera   Video
       41%     42%
                               Current EDI System

          EDI Transaction Volumes*
           (Based on Sell to Customer)

CIG Sales through EDI               = $1.3B
Total Sales through EDI             = $2.8B
CIG Sales processed via EDI             = 47%
Total Sales processed via EDI = 48%

                                    * CIG and ISG Transactions
                               Current EDI System

          EDI Customer Utilization*
           (Based on Sell to Customer)

Camera Customers utilizing EDI = 1%
Video Customers utilizing EDI             = 2%
Printer Customers utilizing EDI           = 16%
Overall Customers utilizing EDI           = 2%

                                    * CIG and ISG Transactions
                                                           Current EDI System
CIG Trading Partner Analysis            Trading Partner                                              Transaction
                                                                                   Trading Partner
                                                              Types                                     Types
                               AAFES                            4        J & R MUSIC WORLD                1

TP Purchase Orders = 60%
                               ABFS                             1        JCPEN                            5
                               ACCESS BUSINESS GROUP LLC        1        KMART                            4
                               AIG                              1        LAGUNA                           3
                               AMAZON                           2        Lord & Taylor                    0

TP Invoices = 50%              APL
                               BANK ONE
                                                                         Merrill Lynch
                               BANKONELOCK                      1        MICRO ELECTRONICS, INC.          3

TP ASN = 20%
                               Best Buy                         6        NAVY EXCHANGE                    1
                               BJ'S WHOLESALE CLUB, INC.        2        NEMF                             1
                               BOISE                            2        New England Audio                0
                               BrandSmart                       0        NFM                              1

TP Point of Sale = 15%         Cabela's
                                                                         Ocean USA                        1
                               CDW                              5
                                                                         OFFICE DEPOT                     5
TP Sales Advice = 12%
                               CIRCUIT CITY STORES, INC.        6
                                                                         OFFICEMAX, INC.                  4
                               CITI Group                       2
                                                                         PC CONNECTION, INC.              3
                               CLJ                              1
                                                                         Philips Petroleum                1
                               COMPUSA                          4
TP Inventory Advice = 8%
                                                                         Pitney Bowes                     1
                               COSTCO COMPANIES, INC.           4        PRTY                             2
                               D & H DISTRIBUTING CO.           4        PSI                              3
                               DANKA                            2        PTAT                             1

TP Payment Advice = 8%         De Lage Landen
                                                                         QUILL CORPORATION
                                                                         Radio Shack
                               DEUTSCHE FINANCIAL               1        REI                              0

TP PO Change = 7%
                               DUCKWALL-ALCO STORES INC         1        Robinson May                     3
                               EXNN                             1        SEARS                            4
                               EXPEDITORS                       2        SEFL                             2
                               EXPRESS COMPUTER SUPPLY          2        SERJ                             2

TP PO Ack = 2%                 Exxon
                               Famous Barr
                                                                         SP RICHARDS COMPANY
                                                                         STAPLES, INC.
                               FED EX                           2        SUPPLIES NETWORK, INC.           4

TP EDI Advice = 2%
                               FILENE                           3        SVBA                             2
                               FMEYER                           2        TARGET STORES                    6
                               FOLEY                            3        TECH DATA                        5
                               FRY's                            0        TRANSAMERICA                     1
                               Hecht                            3        UNITED STATIONERS                5
                               HEIDEL                           1        UPSN                             2
                               HP                               3        Veterans Administration          1
                               IBM                              4        WALMART                          9
                                                                         West Marine                      0
                               IKON                             5
                                                                         WWAT                             1
                               INGRAM MICRO D INC.              5
                                                                         YFSY                             1
                                               Current EDI System
                                              AAFES                                 A130     AAFES     Y Y Y         Y Y Y
                                              ACCESS BUSINESS GROUP LLC             AAD9     AMWAY                   Y     Y Y
                                              AMAZON.COM                            A97E     AMAZON    Y Y Y         Y Y Y
                                              BEST BUY PURCHASING LLC               B20S     BESTB     Y Y Y         Y Y Y

Open CIG Transaction Requests                 BJ'S WHOLESALE CLUB, INC.
                                              BOISE CASCADE
                                              BRANDSMART (potential for 2005)
                                              CABELA'S (live January 2005)
                                                                                             BOISE     D         D Y
                                                                                                                     Y Y Y Y


                                              CARLSON MARKETING GROUP               C17F     CMG       Y Y           Y Y
                                              C LLOYD JOHNSON                       J038     CLJ                     Y Y

       Total Requests by Type
                                              CDW COMPUTER CENTERS, INC.            C87B     CDW       Y Y Y         Y Y Y
                                              CIRCUIT CITY STORES, INC.             W10U     CIRCTY    Y Y Y         Y Y Y
                                              COMP USA                              S65D     COMPU     Y Y Y         Y Y Y
                                              COSTCO COMPANIES, INC.                P49D     PRICOS    Y Y Y         Y Y Y
                                              D & H DISTRIBUTING CO.                DH01     DH        F F Y F F F Y F
                                              DEERFIELD DISTRIBUTING                D42M     DEER                              Y

  Future (F)                 =         17
                                              DISTRIBUTION MANAGEMENT               A064     DMI             Y Y           Y Y
                                              (D/B/A SUPPLIES NETWORK)
                                              DUCKWALL-ALCO STORES INC              D492     DUCKWAL                     Y M M
                                              EXPRESS COMPUTER SUPPLY               E33X     EXCOMP          Y Y           Y Y
                                              ECKERD                                E297     ECKERD    Y             Y
                                                                                             FMSBARR Y               Y

  Manual (M)                 =          6
                                              FAMOUS BARR                           F574
                                              FINGERHUT                             F55D     FNGHUT    Y Y           Y Y
                                              FILENE'S (May Co. account)            F53K     FILENE    Y             Y
                                              FOLEY'S (May Co. account)             F539     FOLEY     Y             Y
                                              FRED MEYER                            R198     FMEYER    M M Y         M M Y
                                              FRY'S (2005 POTENTIAL NEW)            F170                             F F F

  Requested (R)              =         14
                                              HECHT'S (May Co. account)             H37D     HECHT     Y             Y
                                              INGRAM MICRO D INC.                   I415     INGRAM    Y Y Y Y Y Y Y Y
                                              INGRAM MICRO D INC. (Dell business)   1987     INGRAM2   Y Y F F Y Y F F
                                              INGRAM MICRO D INC. (Buy.com)         I24M     INGRAM3   Y Y F F Y Y F F
                                              INGRAM MICRO D INC. (Gateway)         I25M     INGRAM4   Y Y F         Y Y F

  Development (D)            =         18
                                              J & R MUSIC/COMPUTER WORLD            J677     JRDIST    F F F F Y Y Y Y
                                              JCPEN                                 P14E     JCPEN       Y       Y
                                              KMART                                 K36T     KMART     Y             Y
                                              LAGUNA CORPORATION                    L26Z     LAGUNA                  M M Y Y
                                              Lord & Taylor (May Co. account)       L38T     LRDTLR    Y             Y
                                              Meijer                                W309     MEIJER    Y Y Y         Y Y Y

  Total Requests*            =         55
                                              MICRO ELECTRONICS, INC.               M19T     MICROCN   M M Y         M M Y
                                              NAVY EXCHANGE SERVICE COMMAND         N060     NAVY      Y   Y         Y   Y
                                              NEBRASKA FURNITURE MART               N11L     NFM                     Y Y Y
                                              New England Audio (2005 target)                          R R           R R
                                              OFFICE DEPOT, INC.                    O112     OFFDEP              Y             Y
                                              OFFICEMAX, INC.                       O377     OMAX                Y             Y
                                              PC CONNECTION, INC.                   P35G     PCCONN    R R Y         R R Y
                                              QUILL CORPORATION                              QUILL               R             Y
                                              RADIOSHACK                            T39N     RDSHACK         Y             Y
                                              REI Outfitters (live January 2005)                       D             D
                                              ROBINSON-MAY (May Co. account)        R36M     RBSMAY    Y             Y
                                              SEARS ROEBUCK & CO                    SAL5     SEARS     Y Y           Y Y
                                              SP RICHARDS COMPANY                   R661     SPRICH                        Y Y
                                              STAPLES, INC.                         S35V     STAPLE              Y             Y
                                              SYNEXX                                S2NX     SYNEXX    Y Y           Y Y
                                              TARGET STORES                         T417     TARGET    Y Y Y         Y Y Y

  *Total Current CIG Transaction Sets = 155
                                              TECH DATA                             T22T     TECHD     Y Y Y Y Y Y Y Y
                                              UNITED STATIONERS                     U402     US        Y     Y Y Y         Y Y
                                              WEST MARINE                                    WSTMAR    D             D
                                              WALMART                               W385     WALMA     Y Y Y Y Y Y Y Y
                                              SAM'S CLUB                                     SAMS      Y Y Y         Y Y Y
                                  Current EDI System

  Current CIG TP Analysis    Potential CIG TP Analysis*
TP Purchase Orders = 60%    TP Purchase Orders = 68%
TP Invoices = 50%           TP Invoices = 63%
TP ASN = 20%                TP ASN = 32%
TP Point of Sale = 15%      TP Point of Sale = 15%
TP Sales Advice = 12%       TP Sales Advice = 15%
TP Payment Advice = 8%      TP Payment Advice = 18%
TP Inventory Advice = 8%    TP Inventory Advice = 12%
TP PO Change = 7%           TP PO Change = 12%
TP PO Ack = 2%              TP PO Ackn = 8%
TP EDI Advice = 2%          TP EDI Advice = 2%

                                 *Including Open Requests
                                   Current EDI System

             Canon ROI for EDI
Purchase Orders a Year                 = 170,000
Average Time to Process a PO Manually = 15 minutes
Average Labor Rate per manual PO       = $6.25
Savings from EDI PO Transactions
PO EDI Transactions                    = 170,000
Manual Processing Costs                = $6.25
Total                                    $1,062,500
                                                              Current EDI System

        Canon Order Processing Method Analysis

     METHOD          Customers     %    Orders    %    Order Lines    %      Dollar Volume     %

  EDI Processed        119        2%   170,911   42%   656,229       39%   2,757,965,902.58   48%

Extranet Processed    1,806      29% 128,701     31%   547,328       33%   1,444,597,412.42   25%

Manually Processed    4,380      69% 111,817     27%   464,267       28%   1,501,821,610.39   26%

  GRAND TOTAL         6,305      100% 411,429 100% 1,667,824 100% 5,704,384,925.39 100%

    31% of Customers Utilize Electronic Ordering
    73% of Sales Processed Electronically
                                            Current EDI System

                           Existing Architecture


Processing                                                   Trading
              Database          ESS     GENTRAN    (VAN)
Warehouse     •Invoice         Setup                           ASN
(4 Systems)
                •ASN                                         Trading
                 •PO                                         Credits

   S80                                                       Partner
                                                                      Current EDI System

                      New Trading Partner Setup
The following data fields must be properly setup and continually maintained in
order to prevent EDI processing errors with Trading Partners Purchase Orders.

Customer Setup                                                            Conversion Tables
                                          Product Setup
       Bill-to Customer                                                         Trading Partner UOM
      Sell-to Customer                       Global Product Data          Trading Partner Terms Trading
   Tax Information Credit                      Packaging Data                Partner Ship-to Trading
  Profile Invoice Recipient               Customer Item Description           Partner Sell-to Trading
   Delivery Data Payment                     Maintenance Codes                      Partner SKU
 Terms Product Restrictions

                                                           Basic Setup
                      Price List Setup
                                                              Trading Partner Code
                          Price List Definition                    File Format
                          Price Management                       Payment Terms
                                                                   Active Flag
                                                                Output File Path
                                          Current EDI System

            Purchase Order Process Flow
The following steps represent system processes that must be
completed in order to process a customer’s purchase order.

  PO extracted                                   File Mapped to
                          PO Translated
  from Canon                                     Canon’s Internal
                          by GENTRAN
  EDI Mailbox                                    Format

        PO Data          PO loaded into            Order Lines
   validated by ESS      Canon EDI PO            created in ESS
     EDI Module            Database
                                   Current EDI System

    Current EDI System/Process Limitations

 Time to complete customer EDI requests unknown
 Open 810 & 850 customer EDI requests
 Issue Tracking and IT Response
 Current Platform does not provide seamless integration
  with customer driven initiatives (UCCnet, etc.)
 Data Maintenance/EDI Errors
 Inefficient Business Processes related to EDI
 Inadequate Communication with Customers
                                   Future Architecture

     Proposed Benefits of New B2B System

 Decrease time required to complete transaction requests
  by utilizing new data mapping technologies and software
 Expand types of EDI transactions to allow for increased
  electronic transactions with customers and exchanges
 Reduce transaction costs and labor required to process
  traditional EDI mappings and transactions
 Create B2B environment that will accommodate future
  changes in legacy systems and applications
 Streamline Trading Partner Management processes
                                                   Future Architecture

Internal             B2B Platform                                 External

  Oracle       Business Process Management
   ERP                                                             Trading
                                                       Trading     Partners
                  Web Service Integration
Warehouse                                               XML
(4 Systems)                                                        Trading
               Trading Partner Management
 Mercury                                               Portal
                      B2B Integration                               VAN/
                                                      Extranet    Providers
              Enterprise Application Integration
                          Future Architecture

   ERP                                   Partner

(4 Systems)


  Custom                                 Trading
Applications                             Credits


                                                                    Proposed Timeline

                      EDI Future Environment Timeline

   4Q 2004                             1Q 2005                               2Q 2005

1W 2W 3W 4W          1W 2W 3W 4W 1W 2W 3W 4W 1W 2W 3W 4W 1W 2W 3W 4W 1W 2W 3W 4W 1W 2W 3W 4W

Project Kickoff/
Contact Vendors

                        Complete existing 810 & 850
                         requests from Customers

               Define Functional                         Internal/Customer
             Requirements/Future                              Training
                 EDI Strategy

                                                         New System

                   New Vendor                         Development/User
                   Evaluations                        Acceptance Testing

                                                                                       Go Live
                                                                                                      Proposed Timeline
                                     Wed Dec 15
                                                               System Requirm ents
                                    Project Kickoff
                                                                    Com plete

                                             Dec-04   Jan-05     Feb-05   Mar-05     Apr-05 May-05   Jun-05   Jul-05   Aug-05 Sep-05   Oct-05

Vendor Evaluation/Presentations
Develop Vendor Selection Criteria
Vendor Selection
Contract Negotiations

Detailed Functional Requirements

Back-End Development
Commerce Software Selection
Hardware Assessment
Order Management
Transaction Processing/Reconciliation
Warehouse Assessment
Phone Rep Support
Customer Database (commerce only)
Application Development
Product Information Database Alignment

Cost Structure Analysis/Posting

Process Development
Detailed Functional Requirements
Develop EDI Strategy
Site Update/Enhancements
Ongoing Operations

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