Microsoft word - bmscasestudy

ECOutlook.com Helps Bristol-Myers
Squibb Lower Transaction Costs

Solution Overview

Early 1999: As a world leader in health and personal care products that extend and enhance
human life, Bristol-Myers Squibb (BMS) has thousands of suppliers, ranging in size from Global
100 companies to the smallest of small businesses. Although the company’s 20 largest suppliers
conducted business with BMS via an EDI network – with the other 90+ percent, the purchasing
process was handled manually – by mailing or faxing order information. In an effort to reduce its
paper flow and increase operational efficiencies BMS aggressively sought ways to affordably
extend EDI-like capabilities to its largest segment of suppliers.
In the second quarter of 1999, BMS selected ECOutlook.com as its solution provider.
ECOutlook.com teamed with BMS to build an Internet-based solution that would enable BMS to
conduct business electronically with all suppliers, regardless of size, budgetary constraints or
technical sophistication. Effectively, the solution enabled BMS to extend EDI capabilities to its
non-EDI enabled supplier community. The solution was implemented in less than 100 days and
was universally accessible by all BMS suppliers at no cost to them.
Background
Bristol-Myers Squibb is a leading diversified worldwide health and personal care company whose
principal businesses are medicines, beauty care, nutritionals and medical devices. Its Worldwide
Pharmaceutical division discovers and develops breakthrough prescription therapies, including
TAXOL®, Paraplatin and Ifex to fight cancer and Pravachol, Avapro and Plavix to combat heart
disease. The company’s Worldwide Beauty Care Group is led by Clairol – the number one hair
products company in the U.S. and its Worldwide Consumer Medicine division owns such leading
brands as Bufferin, Excedrin, Nuprin and others.
The company employs more than 54,000 people, does business in more than 100 countries and in
1999 achieved global sales over $20 billion. The company’s mission is to extend and enhance
human life by providing the highest-quality health and personal care products.
Business Challenges/Objectives

BMS purchases production and MRO services from over 14,000 U. S. based suppliers; BMS uses
Ariba for procurement of non-production goods and SAP as their enterprise resource planning
(ERP) system. Before implementing the ECOutlook.com solution, a typical flow of documents
was as follows:
EDI-enabled suppliers:

1. BMS sent purchase orders via their EDI VAN. These orders were generated within their SAP system, passed to their EDI software and then to the EDI VAN. 2. Upon receipt of the purchase order, the supplier sent back an invoice via the EDI VAN, which passed it through EDI software and then to BMS’ SAP application for accounts payable. Non-EDI-enabled suppliers:
1. BMS generated paper purchase orders and faxed them directly to their suppliers. Any 2. The supplier would either mail or fax back an invoice for the purchase. 3. Invoice information was scanned and linked to the original PO in BMS’ ERP system, 4. BMS also regularly e-mailed their suppliers a spreadsheet of Expected Delivery Reports and Material Forecasts, which were generated from their ERP system. The paper flow generated from the multitude of faxes and regular mail from 14,000 U.S. based suppliers – only 20 of which were EDI-enabled – was substantial. In addition, only 2 documents were handled electronically via the EDI network – purchase orders and invoices. Moreover, under these processes: Each document was handled from two to six times. Data reconciliation was a manual process, making it very difficult to link the various documents (PO changes, acknowledgements, ship notices, invoices, etc.) related to each order. Extra time was required to handle each document due to higher error rates associated with manual handling of purchasing.
Given the situation and challenges outlined above, BMS sought a solution that would achieve 4
key objectives:
1) Quickly and affordably extend electronic, EDI-equivalent capabilities to 100 percent of 2) Be easily implemented by everyone in its supplier community, regardless of level of IT 3) Integrate seamlessly with BMS’ SAP system. 4) Be implemented and managed without the purchase of new hardware, software or
Solution: ECOutlook.com enables automated, electronic information exchange

After detailed analysis of a variety of solutions, Bristol-Myers Squibb selected ECOutlook.com as
their technology partner to electronically link and integrate business communications between
BMS and their suppliers. By implementing ECOutlook.com’s Internet-based eReach solution,
BMS was able to lower transaction costs by substantially reducing the time spent handling each
transaction-related document. With eReach in place, thousands of “hard copy” business
documents that flowed between BMS and its non-EDI-enabled suppliers could now be exchanged
electronically.
As a result, within a little over a year BMS went from electronically exchanging only two
documents – purchase orders and invoices – between a few large companies, to enabling the
electronic exchange of seven types of business documents with more than 1600 suppliers for both
MRP and MRO goods and services. (Current plans call for BMS to eventually roll out the
solution to well over 10,000 regular and occasional trading partners.) The seven business
document types are: PO (including Discreet POs, Blanket POs and Service Orders) PO changes,
PO acknowledgements, advance ship notices, invoices, materials forecasts and expected delivery
reports.
Web-form Suppliers:

1. BMS generates a Purchase Order or PO change in their ERP system which is translated into an EDI file and submitted to ECOutlook.com. 2. ECOutlook.com automatically normalizes the file into an XML format, confirms that there are no duplicate files, aggregates the Purchase Orders and PO changes, validates the file for accuracy and then routes it to the supplier as either as either a single EDI document or an easy-to-read Web-based form. 3. The supplier can interact with the BMS document by entering information into an intuitive Web-based form to generate a purchase order acknowledgement, an advance ship notice, and, an invoice. Based on the PO type, various BMS business rules – such as tolerance levels, notifications, required fields and calculations, or other response requirements – are linked back to and enforced on, the responding documents. 4. All data is validated for accuracy and automatically routed to BMS via ECOutlook.com. If any of the information is inaccurate and does not comply with BMS’ business rules the sender cannot complete the transaction without first correcting the data. 5. Upon receipt, the information is automatically integrated into BMS’ SAP system, without Direct Integration Option:

In addition to offering its suppliers the web-form method of response BMS worked with ECOutlook.com to implement a direct file transfer solution for its EDI-enabled partners. By utilizing this option suppliers can upload to ECOutlook.com any responding docu-ment (purchase order acknowledgement, advance ship notice, etc.) as an EDI or flat file. As with web-form suppliers, various BMS business rules are linked back to and enforced on the responding documents and all data is validated by ECOutlook.com before being automatically routed along to BMS to be downloaded directly into its business system. In the event, that any information contained within the responding documents is inaccurate and does not comply with BMS’ business rules suppliers are automatically notified via e-mail to correct the document and retransmit. In addition, once the document has been successfully transmitted the data will be viewable and archived on the ECOutlook.com portal. Lower administrative costs due to less time spent handling purchase orders and invoices and no longer having to research lost invoices. Additional cost-savings and efficiencies as a result of electronically enabling a significantly larger percentage of their supplier community – from 20 to 1,000+. (Future plans are to electronically enable all 14000 U.S. based suppliers.) Low cost of implementation as the solution requires no new investment in software or hardware for either BMS or its supplier community. Application of business rules and logic to all documents eliminates manual handling and substantially reduces errors. Paperwork reduction due to full integration of solution with BMS’ SAP system. Improved communications with suppliers due to eReach’s ability to enable broadcast messaging to all BMS suppliers. Enhanced business intelligence due to ability to easily track purchasing trends and run reports on purchasing data. Benefits to Trading Partners: (get a quote from a supplier) Zero implementation costs as no new hardware or software purchases required. Lower administrative costs due to less time spent handling purchase orders and invoices. Lower phone bills and mailing costs due to electronic transmission of documents. Higher productivity due to reduction in manual entry and subsequent errors. Easy document tracking capability ensures smoother, faster movement of invoice through accounts payable department. Common location for all data means improved efficiency. All historical data is electronically archived and available 24/7. Can be re-retrieved, downloaded to computer and/or printed in hard copy form. Enhanced inventory management capabilities resulting from ability to reconfirm dates with Materials Release Forecasts.
Application of business rules and logic enhances solution
Another major benefit of the ECOutlook.com solution is that BMS can have business rules and
logic applied to any data exchange between them and their suppliers. This added capability has
been shown to substantially reduce the amount of time it takes to process each document. Two
example rules are as follows:
All invoices applying to one purchase order cannot be greater than the total of the purchase order or any approved changes to it. A purchase order acknowledgement cannot list an amount that is 5% more or 0% less than the original amount provided in the purchase order. Vendor-Managed Inventory (VMI): A Future BMS Initiative
In the future, ECOutlook.com and BMS will be working together to implement a tightly
integrated VMI program for a number of BMS’ MRP suppliers. In this initiative BMS’ partners
will be have access to a special VMI “dashboard” via ECOutlook.com where they will be able to
able to look at an aggregated view of BMS’ current inventory levels as well as daily, weekly, and
monthly usage forecasts.
The VMI partner will be able to link to a blank PO from the dashboard and will also be able to
respond with shipment and invoicing documents from this aggregated view.
Summary
To date, BMS has worked with ECOutlook.com to implement several of the eReach solutions for
the purchase of raw materials (MRP) and in dealing with the purchase of MRO products and
services. As of 10/8/2000 the solution had been in place for over a year and continues to prove
out its value to BMS as evidenced by the growing list of its suppliers to whom BMS is making
the solution available.
To find out more about ECOutlook.com’s work with Bristol-Myers Squibb and how you can
lower your company’s transaction costs by quickly and affordably extending EDI capabilities to
your non-EDI enabled suppliers call ECOutlook.com at 888-377-1203 or visit us on the Web at
www.ECOutlook.com. And while you’re there be sure to sign up for one of our free e-business
e-seminars.

Source: http://positiveresponse.com/wp-content/uploads/pdf/CaseStudyBMYSquibb.pdf