Building your Business case for Big Data: Case Study on Jabil

www.pwc.com

Presenters: Robert Franey, PwC, John Foster, Jabil Session Code*, 88547 Tue., 12:30 p.m. - 12:50 p.m. Forum A Theater

PwC

Jabil worldwide presence

• With more than 165,000 employees and facilities in 33 countries, Jabil provides comprehensive, individualized, focused solutions to customers in a broad range of industries

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PwC

Global manufacturing services partner

• Supply Chain Expertise, Design and Implementation

• Total Life Cycle Management

• Logistics and Final Product Fulfillment

• Product Development, Realization and Value Engineering Services

• Procurement Leverage

• Brand Protection Through Uniform Global Corporate and Social Responsibility Standards

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Localized Supply Chain Services in

Consuming Regions

PwC

Complete product service offering

• Product Development

• Circuit Design

• CAD Layout

• Product Validation

• Circuit Board Assembly

• Molding

• Mechanical Design & Plastics

• Integrated Enclosures

• Systems Assembly

• Direct Order Fulfillment

• Supply Chain Optimization

• Repair & Warranty Services

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Life Cycle Product Management

PwC

Framing the situation around MDM

• Significant growth over the last decade

• Single SAP instance, minor other ERP systems from acquisitions

• Localized processes have caused some data duplication and data inconsistencies

• Evaluated multiple partners and selected PwC to assist with implementing a global MDM strategy

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PwC

Framing the situation around MDM

• Areas of initial focus:

- Material master – 455,604,365 data elements across all material types

- Customer master – 6,902,717 data elements across all customer account groups

- Vendor master – 15,902,115 data elements across all vendor account groups

• Several key initiatives will be simplified with the adoption of MDM

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PwC

How MDM relates to other Jabil Initiatives?

“The top 12 corporate initiatives we defined as core to our overall strategy are in various stages of progression. Underlying and pertinent to the ultimate success of a number of these initiatives (Principal structure, Shared Services, Advanced Planning process, Reduction of organizational complexity, Best in class IT systems and solutions, etc) and our ability to provide appropriate, efficient, timely and meaningful business intelligence, is the topic of master data management or MDM. MDM being a set of processes and tools that consistently defines and manages non-transactional data.”

• Forbes Alexander, CFO (Project Sponsor)

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PwC

Information advantage

By changing existing data, structures, and processes, Jabil can begin to build a foundation for Information Advantage:

• “One place, one number”

• “One version of the truth”

• “Consolidation”

• “Virtual centralization”

• “Bend the cost curve down”

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PwC

Case for big data management

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PwC

Why doesn’t your current information management work – What’s missing?

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Standards

Hierarchical Structures Business Relationships

PwC

Building the business case

Fundamental principle #1:

• The business will do what it gets paid to do

Fundamental principle #2:

• The business case needs to be developed around paying the businesses, and paying them quickly

Fundamental principle #3:

• You already have all the data you need within your four walls and systems to build the business case, it’s just not published

Fundamental principle #4:

• Data and Information Management initiatives don’t have enough legs to carry themselves, they need to be tied to a larger strategic initiative

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PwC

Calculating data creation & maintenance

• The following calculation is for each master data domain within the scope of the initiative:

- Number of create and maintain transactions in the ERP within a fiscal year (may be in separate tables for creates and for changes)

- Multiplied by the DAMA published fully-burdened cost per transaction (e.g., Material master = $.85/transaction)

- Product from the above multiplied by the number of on-line and off-line non-ERP systems where the master data is re-keyed for use in different functionality/applications (not electronically interfaced)

- Equals Total Cost to maintain the domain master data

- Also highlights the number of touches per master record

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PwC

Calculating data creation & maintenance (example)

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Material Master 01 – transaction counts FY11 1,783,318

Material Master 02 – transactions counts FY11 7,431,305

Total Material Master transaction counts 9,214,623

DAMA published fully burden rate/transaction $ .85

Total cost in just SAP ECC v6.0 system $7,832,429

Number of non-ERP On-Line & Off-Line Applications 5

Total Cost of Managing Material Master Data Domain $39,162,145

Total Number of Touches Per Material Master 13

PwC

Where to look for costs

• Material Masters:

- Too many Material Types (causes different configurations for each and additional keying for each material created)

- Operations adding prefixes and suffixes to an existing material for exception handling – impacts inventory processing and costs

- Different numbers for the same material or part in different sites – impacts inventory processing and costs

- Non-duplicate/duplicates, just slightly different typically by description

- Non-standard material descriptions

- Incorrect Bills of Materials

- Too many touches of the data

- Data field system defaults

- Inaccurate units of measure, dimensions, and weights

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PwC

Where to look for costs

• Vendor & Customer Masters:

- Too many non-duplicate/duplicates due to no standards for naming

- Address data is of poor quality

- Lack of relationships between parent and child entities

- Vendor and Customer are too low in the hierarchy

- Number of touches of the data

- Data field system defaults

- Incorrect manufacturer part numbers

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PwC

Areas to target for cost reductions in part due to poor data quality

• Sourcing and Procurement:

- Manual Direct and Indirect PO processing and matching

- Processing vendor registrations and compliance

- Indirect material errors due to incorrect manufacturer part numbers

- Expedited shipments

- Quality Assurance

• Supply Chain:

- Forecasting, Planning, and Work Scheduling

- Claims for non-quality product issues (Mfg. mistakes)

- Cycle time for introduction of new materials

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PwC

Areas to target for cost reductions in part due to poor data quality

• Inventory Management and Distribution:

- Product Returns

- Product Re-labels

- Inventory Movements

- Expedited Shipments

- Cycle Counting Inaccuracies

- Obsolete Inventory

- Claims

- Out of stock

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PwC

Areas to target for cost reductions in part due to poor data quality

• Information Technology:

- Complex data management technology landscape

- Too many disparate systems

- Redundant applications performing the same functions

- IT managing end user reporting functions

• Finance:

- Period-End closing process predictability

- Manual reconciliations

- Number of manual consolidations, eliminations, and journals

- Tax Rate Forecasting accuracy

- Days Outstanding Receivables

- Short invoice payments/claims

- Hierarchy instability

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