Your customers are implementing a procurement solution. Learn how to change beliefs, shift thinking, and drive conversations and change within your company to shift from operationally focused e-commerce to customer-centric digital commerce and help your company flourish. You'll also gain insights into how to get to the future and create a change organization.
1. Grahame Davidson – Solutions Consultant, Private Digital Commerce; IBM A/NZ
Hiroyuki Kaneda – General Manager, Open Network; Misumi Group Inc.
August 31, 2016
Selling E-Commerce to Your Leadership
Public
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Misumi Group Inc.
Hiroyuki Kaneda
General Manager,
Open Network, Misumi Group Inc.
Leads “Misumi Open Network Strategy” as GM in Misumi Group Inc.
Prior to joining Misumi, Hiroyuki worked for SAP Japan for 15 years
(SAP Global Top Talent for 7 consecutive years).
Executive MBA from INSEAD University.
Author of eight business-related books.
Received media coverage from “President”, “Diamond”, “Toyo
Keizai”, Nikkei Business”, and “GQ JAPAN.
Lectures “Business Strategy” at Tokyo Metropolitan University.
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MISUMI Group Introduction
• Total revenues in FY2015: 240 Billion Yen (approx. 2.3 Billion USD)
• As a manufacturer’s supplier throughout the world, we quickly deliver our items to 220,000 customers annually
MISUMI group’s revenues & # of employees
(100Million)
FY2015
240B Yen (2.3B$)
9,628 employees
# of employees
Revenues
(#)
# of MISUMI’s customers (machinery industry)
FY2015
80,000 in Japan
140,000 in outside of Japan
Total 220,000 customers(#)
In Japan
Outside of
Japan
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Misumi Brand Product Line (Misumi as Manufacturer)
• Product lineup of 16 million products
supplied by more than 2,700 makers
• Product information for each item is
offered through the E-catalog
(Unit Price, Lead time, specifications)
• Each product is designated a part
number that is used to place orders
without drawings
• Meet customer requirement of the
shorter delivery globally
Product Category 16 Million Mechanical Components
Major Products Carried by the MISUMI Group
20. 20
550 BrandsMechanical Components
300 BrandsElectronics Components
821 BrandsTools and Consumables
1,050 BrandsMRO
Misumi Brand Product Line (Misumi as a Distributor)
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320
45
0
50
100
150
200
250
300
350
Direct Indirect
Our Challenge of Indirect Production Materials
• Indirect production materials cost only 36% of total purchase amount but 80% of total purchase-related workload
• As a result, 7.1 times more inefficient and reducing its workload is big challenge for many manufactures
Indirect
36%
Direct
64%
Purchase amount
Indirect
80%
Direct
20%
Purchase related
workload
Efficiency
(Amount/Workload)
7.1 times
Source: Caps Research “Critical Issues Report” Indirect Spend
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Key Issues of Indirect Materials Procurement
70% of workload is
spent for low frequent
purchase items in
indirect production
materials
Total purchase-related
workload cannot be
improved unless
reducing workload for
low frequent items
Catalog items
60%
30%
Fixed price
Replace brand
One-off items
40%
70%
Quotation/Operation Workload
E-procurement
Purchase
amount
Workload
Challenge
Countermeasure
Purchaseamount
Items
Higher frequent item Lower frequent item
Source: Spent analysis result of a MISUMI customer
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Benefit in Connecting to E-Commerce
(Our case: MISUMI e-Catalog integration with customer)
• 13 minutes can be reduced per 1 order and more benefit in large order transactions
• MISUMI’s 16 million stock + 80 thousand trillion MTO* items can support reducing customer’s workload
(10K)
All can be purchased in MISUMI E-com
Comparison of e-Catalog in Japan
Source: MISUMI’s (As of Mar 16)
Benefit in connecting to e-Catalog
Spent time for
quotation/order
Quote
5 min
PO
5 min
Acceptance
7 min
3 min
2 min
1 min-2Min
-3Min
-6Min
13 min
reduction
Select item
5min 5 min
-2Min
Spent time for order
by system
Total
22 min.
Total
9 min.
107
7 2
891
198
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
MISUMI TRUSCO As One Midori Monotaro amazon
1,600+800垓(受注製作品)16 million stock + 80 thousand trillion MTO
*MTO: Make to Order
CompA CompB CompC CompD CompE
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Procurement Integration Creates Value for Buyer/Supplier
(minimizes the workload, cost, and speed)
System Integration
minimizes customers
procurement efforts
and activities
PunchOutEDI
Customer Misumi
Benefit
• Limit the number of
approved suppliers to
minimize cost
• Promote and drive
compliance
• Automates
procurement most
processes. Increases
efficiency.
• Minimize manual
errors when ordering/
invoicing etc.
• Increase sales by
gaining visibility to
customers users
Send Order
Detail (PO)
Receive
Order Detail
(PO)
Acknowledge
Price/LT
Send
Shipment
Information
Upload
Order(SO)
Customer Misumi
Check Out
PunchOut
cXML
(OCI/CIF)
Search
Product
Click Misumi Link
B社
C社
Select
Product
Request
Order cXML
(OCI/CIF)
Internal
Approval
Search
Select
Order
Confirm
Receive
Request
EDI
Automation
Receive
Shipment
Information
• Automates
procurement most
processes. Increases
efficiency.
• Minimize manual
errors when ordering/
invoicing etc.
1.
2.
1.
2.
3.
PunchOut allows easy access to, and simple product selection from pre-approved suppliers
EDI Integration allows buyers to centralize purchasing activities among various suppliers
Procurement activities can be easily standardized by utilizing Procurement Service Providers
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Lessons Learned (Misumi as Supplier)
Project (Execution)
• Project Team Structure
(Cross Function by IT/ Business)
• Project Scope Definition
(for Process Automation)
• Supplier On-Boarding
Strategy (Plan)
• Simplify the Objectives and ROI
• Quick Win Goal Setting
• Top Management Engagement
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Coming Soon…
Ariba Spot Buy with MISUMI Supports Your Global E-Procurement
Collaboration of SAP Ariba/MISUMI supports your global E-Procurement, especially your Asian Market by Spot Buy
Customer Benefits
Realizing Global E-procurement
- Reduce non-core works
- Visualize/Integrate/Consolidate
- Procurement globally
Misumi
Custo
mer
Ariba Spot Buy
Misumi
Custo
mer
Misumi
Custo
mer
Misumi
Custo
mer
MISUMI
MISUMI Group Inc.
MISUMI Corporation
SURUGA Production Platform Co., LTD.
SURUGA SEIKI CO., LTD
Dayton Progress Corporation
Anchor Lamina America, Inc.
27. Thank you Contact information:
Grahame Davidson
Solutions Consultant
IBM Australia Limited
55, Coonara Ave,
West Pennant Hills
NSW 2125.
+61 405576884
#SAPAribaLive
Hiroyuki Kaneda
General Manager,
Open Network Department,
Misumi Group Inc.
Hiroyuki.f3ky.Kaneda@misumi.co.jp
+818097118064
#SAPAribaLive
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Driving Future Business Integration
With the external environmental
change, business collaboration/
integration is key for our success
1. Business integration in the variety
of business process (order
automation, replenishment, etc.)
2. Business Process outsourcing with
the customer value chain
3. Business Collaboration with
external players (Customer,
Supplier, Service Provider) ×
×
×
× ×× × × ×
×
×
×
Companies who cannot
integrate independently
=“Dropout Cluster”
Industrial Ecosystem (Business Driver)
Product
development
Product
designing
Production Marketing
Sales/
Logistics
R&D
Value Chain
Service
Component
manufacturing
R&D
Institution
OEM/
EMS
Discrete
manufacturing
Master
Data
Information
Production/
Logistics
quick
delivery
distribution
Sourcing
Fulfillment
Portal Marketing
Commerce
Platform Service
Companies who can
integrate independently
Industie4.0 3D Printer Industrial robot
External environmental change (Innovation)
Emerging country etc…
Screen Only
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Our Strategy
Level P1. Punch Out
Level1
(No Punch Out)
P2. Punch Out
Level2
(Original Format/
Simple Function)
P3. Punch Out
Level3
(Original Format/
High Functionality)
P4. Punch Out
Level4
(Standard Format/
SimpleFunction)
P5. Punch Out
Level5
(Standard Format/
High Functionality)
E5.
EDI Level 5
(Real Time)
E4.
EDI Level4
(Standard Format/
Automation)
E3.
EDI Level3
(Original Format/
Automation)
E2.
EDI Level2
(Semi Automation)
E1.
EDI Level1
(Manual)
Punch Out LevelLow High
Low
High
ManualSemi
Automation
Automation
No Punch Out
(Limited business
opportunity)
Punch Out with Original Format
(Increase business opportunity,
but take Cost and Time
Punch Out with Standard Format
(High business opportunity,
Easy to expand sales opportunity)
③
④
EDI
Level
SAP SRM
Integration
with Customers
Existing EDI integration
with Customers
Japan Supplier Network
Integration (with Customers)
Screen Only
①②
Ariba
Integration
with Customers
Our top priority
Acceleration with
Ariba
Our top priority is to focus on the High Level* Punch Out/ EDI segment to increase our business opportunity
(SAP Ariba is the best partner for our strategy)
* Misumi Original Study:
Classification of our customer segment with Punch Out/ EDI Level
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0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4
CY2014 CY2015 CY2016
0
100
200
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600
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800
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1,000
4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4
CY12014 CY2015 CY2016
MISUMI E-Catalog Growing
• MISUMI customer’s E-procurement has been increasing Y-o-Y due to their transformation to IT-based manufacturing
• E-procurement for indirect production materials is even more increasing
Number of companies connecting with MISUMI E-catalog
(Mainly Large accounts)
(# of company
group)
885 groups globally
as of Mar. 2016
Number of MISUMI E-catalog users
(Mainly SMB)
1.5M users
globally as of
Mar. 2016
(Users)
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Screen
Add “MISUMI” to the
Punch-Out catalog list!
Misumi to Start Integration with SAP Ariba
①Keyword/Part #
②Product Category ③Supplier Name
Easily search though 16 Million products! Flexible Spec search
(material/surface treatment/dimensions etc.)
1
2
E-catalog is equipped with various search methods,
allowing users to easily find what they need.
Keyword/Part #/Product Category/Supplier Name
Flexible product specification with on the spot quote !
Eliminate time wasted on waiting for quotes.
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Quote
Receive
Quote
Enter QT
Details
to System
Order Accept
Before
Integration
with Misumi
・Enter order
details to
system
After
Integration
with Misumi
Minimize Quoting/Order Processing Time
Minimizing overall time spent on processing quotes and completing orders
Enter Order
to System
Quote
Receive
Quote
Enter QT
Details
to System
Order Accept
Enter Order
to System
・Quote with multiple suppliers
・Wait till all suppliers reply
・Check Price/Delivery date
・Enter quote result into system
・Order out to multiple suppliers
・On-spot quotes available
・Eliminate waiting time
・Eliminate
entering order detail
to system
・No price/LT adjustments
・Eliminate entering quote result
・One-stop shopping experience
Minimize quote requests! Eliminate double entry!
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Procurement
Monitor
Global Procurement Integration
ProcurementEngineer &
Production
Select
products
Request QT Answer QT
Receive QTConfirm QT
Apply PO PO
Answer
Delivery Date
Inform
Delivery Date
Confirm
Delivery Date
Ship
products
Receive
products
Customer MISUMI
Engineer &
Production
Select
products
Answer QT
Confirm QT
PO
Answer
Delivery Date
Confirm
Delivery Date
Ship
products
Receive
products
Customer MISUMI
Current procedures New procedures
Lots of check and adjustment work occur
For example, the lead time*
was shortened
from 2days to 5 min.
* From “Select products” to “PO”.
MISUMI Punch Out and EDI solution cuts processes like liaisons between the engineer and the supplier