Customer Story Leggett & Platt’s Enterprise Procurement System
Page 2 Business Profile 120 year old diversified manufacturer Residential Furnishings Commercial Fixtures & Components Aluminum Products Industrial Materials Specialized Products
Page 3 Sample Products Residential Furnishings Commercial Fixtures & Components Aluminum Products Industrial Materials Specialized Products
Page 4 Business Profile $5.5 Billion revenue 30 divisions 300 branches 33,000 employees Significant acquisition growth 160 in last 10 years Very decentralized Operations Culture
Page 5 Challenge with legacy environment Distributed transaction system Inability to share information across branches Inconsistent reference data Multiple vendor masters Non-standard UOM codes, terms codes, etc. Inability to get actual price paid Paper-based system of record Manual matching of PO, Receipts, Invoices Undisciplined and inefficient business process Distribution of 6 part PO forms Branch manager signs every PO and Invoice
Page 6 Program Mission & Objectives Establish a disciplined purchasing process and implement a single technology solution to enable Leggett & Platt branches to achieve cost savings through leveraged Strategic Sourcing and elimination of non-value-added activities. Streamline and automate the business process Improve quality of procurement data Share purchasing information across the enterprise Increase Strategic Sourcing productivity Improve implementation of supply contracts Lower COGS – direct and indirect materials
Page 7 PeopleSoft Enterprise 8.8 Modules Strategic Sourcing eProcurement Purchasing Accounts Payable eSupplier Connection eSettlement EPM Supplier Rating System
Page 8 Implementation Challenges Integrations R Us Branch Setup Business Units Vendor Locs Ship To Item Rationalization Subcontract POs Automotive Release Schedules Strategic Sourcing Distribution Query Strategy
Page 9 Rollout Strategy Roll out to branches by Division 1-2 branches scheduled per week, every week, except major holidays and quarter ends Implementation and Support staff 8 – Implementation 5 – Administration and Support 9-week conversion project plan Business process review – 2 weeks User role definition and setup – 3 weeks Data scrubbing and conversion – 3 weeks Training and go-live – 1 week
Page 10 Implementation progress April 2006, approximately: 28 Branches converted 30,000 PO’s dispatched 120,000 invoices processed $200,000,000 paid to 3,600 suppliers 750+ users 525 Requestors 130 Purchasing users 70 actively creating PO’s 150 Accounts Payable users 45 actively creating vouchers
Page 11 Results Purchasing data is available across the enterprise. Data accuracy has improved. Actual paid price, by item, is easily captured and available. Consistent units of measure allow for aggregation of volume data. Vendor master is being rationalized. Business process has been streamlined. Online workflow approvals Electronic PO dispatch Automated A/P 3-way match
Page 12 Next steps Take it to the bottom line Leverage improved data Form commodity teams Strategic Sourcing events Organizational change Consolidated procurement activities Accounts Payable shared services Supplier portal – PO collaboration and acknowledgement Electronic invoice settlement
Page 13 Lessons learned Organization Project team dedication Transition to support model Off-shore development Explicit detail in requirements documentation Extensive QA Testing Discipline and dedication Increase complexity of test cases Change Management More about business process than software
Questions?