Hello. I'm Ho.
Guest lecturer today, covering for Prof. Jung Park.
- Korean heritage, British upbringing, Swiss working life
- 25 years of ERP and change across consulting, oil, fashion, luxury and advertising
- Today I run Trinity: helping organisations change through their people
Three parts, 45 minutes each
Theory
45 min- A question to start
- Who I am
- ERP in one picture
- Lecture 3: procurement planning and processing
Case study
45 min- A polo, from design into the customer's hand
- Six groups, three rounds
- Real life in a fashion maison
Real world
45 min- Lecture 4: supplier and procurement analysis
- A services organisation
- All in one, or best in class?
Before we start
One question, who I am, and how today works.
The polo you buy next September. When did someone start working on it?
Hands up. The answer comes in Part 2.
How I got to this room
My seat: the translator between technology and the business. End users need to understand, appreciate and accept a new system. My focus is the people.
Practitioner>Professor
Stories from real projects
Fashion, oil, luxury, advertising.
Ask me anything, anytime
Interrupt me: this is why I am here. If you want a chat at the end of the lesson, please stay behind.
Prof. Park's theory, wrapped with the real world
Lecture 3 and Lecture 4.
Case study
Working in 6 groups.
An ERP is an agreement between people about how the business works, written down in software.
The lab will be done with Prof. Park upon his return.
ERP in one picture
Where today sits in your course, and the six groups that make the end to end.
Your course, one integrated system
Today: managing procurement, strategic and operational, and then analysing it.
Six groups that make the End to End
In Part 2, you are these six groups, running one polo from design into the customer's hand.
Procurement planning and processing
Prof. Park's Lecture 3
Procurement: strategic and operational
Plan long term
Analyse spend, find sources of supply, negotiate and monitor contracts.
Execute every day
Convert demand into purchase orders. On time, to the right place, in the right quantity.
Purchasing keeps supply and demand in balance.
Who controls the buying?
Centralised
Purchasing buys on behalf of the whole organisation.
Decentralised
Business users control and manage their own buying.
Mixed
Central purchasing manages some of the spend. The business keeps some buying.
Which one? Head office does the sourcing, local plants do the purchasing. The answer depends on company size and how specialised the units are.
MixedProcure to pay, step by step
Supply planning
Ordering
Goods receipt
Settlement
Pay supplier
Each step creates a document. Together they form the document flow you will walk in Exercise 3.
From proposal to order, and to which supplier
Each document is created with reference to the one before.
Built on master data from strategic sourcing: supplier, product, contract.
Three-way match
Pay, and receive a credit note for the missing quantity.
Order, receipt and invoice: three documents, one control that protects the money.
How much, and when?
The fuel tanker
No reorder point. A tanker holds 5,000. A future deficit of 7,500 orders two lots.
Demand driven suits volatile, long lead time or expensive items. Consumption based is simple and steady.
The recipe
Single BOM: a laptop and its asset tag. Multiple BOM: several steps, like the handlebar before the grip.
Data, integration and scale
The contract
It sits in between. In a major oil company, the text blocks were master data and the finished contract was transactional.
One receipt, three effects
Captured once, as part of a process (within WM).
From local to shared
A $2.4 billion project: shared processes, standard master data, one SAP instance.
Stretch your legs
After the break: Part 2, the case study.
Think about which of the six groups you want to be.
Polo: from design into the customer's hand
How the market works, then six groups run the chain.
Super seasons, and minor seasons in between
Minor seasons are smaller drops that keep the shop floor fresh. Names, timing and count vary by brand.
Today we plan AW27: the Classic Polo for Autumn/Winter 2027.
The market: where the brand meets its buyers
The market is when the polo is ordered. Production planning is adjusted to what the market asks for.
The calendar behind one polo
Six groups. End to End Process.
What goes wrong in your area?
Two sticky notes
One thing that goes wrong in your area. Who else feels it?
Outside in
Which group can hurt you most? Name one, and how.
Out loud
Each group reads one note to the room.
Stuck? Examples
- MDMA new colour with the wrong barcode
- PTPOrder sent with the wrong size split
- WMCartons labelled with the wrong size
- OTCCustomer billed at the wrong price
- RTRCurrency rate not updated
- BITwo reports, two sales numbers
When things go wrong
I deal a card. IMPACT: is your group hit, directly or indirectly? When, and how? Stand up if yes.
Five lessons from the ripples
Interdependencies everywhere
Think process, not function.
Master data travels furthest
Cheapest to fix at the source.
The system joins the data. People join the decisions.
Time is always short
An ERP helps you manage the process and the situation.
Controls are there for a reason
Three-way match, duplicate check, dual approval.
Real life in the world of a fashion maison
Always the next season
Design one, make another, sell a third. All at the same time.
A problem
Outlets, off price, carry over, staff sales. France bans destroying unsold clothes.
Colours move
A colour can take off, or cool down, in the middle of a season.
Size is personal
There are nuances by market, even in size labels. In some cultures, people like the feeling of wearing a smaller size.
The plan is the starting point. The system and data keep it on track.
People's behaviour and decisions can override the efficiency an ERP was built to deliver. People make or break the outcome.
Where in Western Europe can you still burn unsold clothes?
Take a guess. Then I reveal.
Well played
After the break: Part 3.
Lecture 4, a services organisation, and one big question.
Supplier and procurement analysis
Prof. Park's Lecture 4
Brain, muscle, and a closed loop
"Who should we partner with to get the best fabric, at the best price, for the next two years?"
"How do we order 5,000 blue buttons for the Milan factory, to arrive by next Tuesday?"
Like your own health: set a goal, plan, track, adjust.
"You can't manage what you don't measure"
Balanced: look beyond the financial numbers.
Three kinds of data, and thinking in cubes
Embedded analytics: one single source of data.
Sales measure of 850 for Skis in February: the fact sits where the dimensions meet.
Supplier and procurement analysis in practice
Contract spend ratio
Maverick spend
On-time delivery
Total spend per category
Purchase order history
| PO 4501 | Received |
| PO 4502 | Invoice blocked |
| PO 4503 | Open |
| PO 4504 | Paid |
Traffic lights
Above, on or below target. Someone decides where the lines sit.
From total to document
Click a category, land on the purchase order behind it.
Which metric would you watch?
At a luxury fashion brand, it depends on who you are in the business, and outside it.
Real life is less straightforward
Upgrade CCTV, alarms and badges
How much can we spend without hurting business critical activity?
Is year to date spend still on forecast?
Do we buy everything we planned, economise, or drop something?
The report gives you the number. The decision still needs people.
Balanced on paper.
Balanced in reality?
Competing priorities. Like planning our own lives, there is a natural place of focus. Who decides it?
Good to know
Exercises 1 to 4
Organisational design, sourcing, supply planning and processing, supplier and procurement analysis.
Groups of 5
Start thinking about your group. The details come in session 11.
Explain, don't name
Explanations earn more points than names and screenshots.
Same pattern, different stock
A consulting or services organisation, where what they sell is people.
Where demand meets supply
Same principle as a goods company. In fashion the stock is polos. In services it is people's hours: an unsold hour is gone.
Who touches one deal? Reveal it, one strip at a time.
All in one, or best in class?
One suite for everything, or a specialist for each job?
Is it more efficient and effective to have an all in one ERP (e.g. SAP), or to mix and integrate best in class software?
All in one e.g. SAP
- Constrained to what the supplier offers
- High implementation cost
- Intrusive to the business and its ways of working
Best in class a specialist per job
- Integration is tricky: every handover is an interface
- Master data management across systems
Even a "full" SAP has satellites
Systems, apps and software, Excel included, that are connected, impacted or considered.
satellites around SAP.
So the real question is how well they connect.
- 1Interdependencies everywhere.
- 2Master data travels furthest.
- 3The system joins the data. People join the decisions.
Thank you.
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