Contract savings new

Contract Savings

A Sub System of GPS

GPS Contracts Savings

• Why GPS Contract Savings developed and used for?– Sourcing Decision Analysis– Cost management (CoMa) Reporting– Means of tracking Buyers, suppliers

commodity managers etc. performance.

How GPS Savings Calculated?

• Initially savings are calculated using Action plans.• Following problems reported due to using Action

plans to calculate Savings:– Multiple Actions plans were created because Standard

blanket contract issued only for Approved action plans.

– Creation of multiple Action Plans covering the same effective dates, which artificially inflates savings.

GPS Savings in GPS Antwerp Release

• An enhancement was implemented in the GPS Antwerp Release to allow the creation and/or maintenance of Standard Blanket CLIs without an Action Plan. – This causes savings (positive or negative) to be

underreported.

Contracts Savings

• To overcome the mentioned problems World-Wide Purchasing Cost Management and the Global Business Process Owner proposed to use ‘Contracts’ instead of Action plan to calculate Savings.

Contracts Savings

• Advantages of using Contracts– Savings are accurate.– Total Price is used to calculate Savings instead

of ‘A’ price.Ref:

Total price =Base Price + Total Base Material Cost + Price Add-Ons + Taxes

‘A’ Price = Base Price + Total Base Material Cost

Contracts Savings

• Advantages of using Contracts– Savings for a contract can also be allocated to

the plants using the contract, instead of all plants using the part (as is done on Action Plans).

Contracts Savings

• Initially Contract Savings functionality was part of Global Purchasing Reporting System (GPRS).

• Later moved to Supply Chain Metrics Reporting (SCMR).

• Finally detached from SCMR and implemented as separate enhancement in GPS.

700

GPSPLIPC1B

CSIDSPLIPC1B

MMDBPLIPC1B

GPDSPLIPC1B

WPCSPLIPC4B

Supplier Name & Address,Supplier Contracts

DSM = D

WWP/PC&LDS/DRM06/01/98

PRIMOPLIPC4B

MPSPLIPC1B

GQTS(SAMPLE/PPM)

PLIPC1B

Contract

DSM = S

GMTOPSPLIPC4B

MGO-AMGO-CPLIPC4B

TMSPLIPC1B

SPA

Contract

SupplierContracts

eFX

PLIPC1 BShadow File

DSM = D

DSM = D

CurrencyConversionRates

Part Cost

OrganizationName, Buyer,Contract

DSM = D

DSM = D

DSM = D

Part Volumes

Part ValidityDSM = D

Parts per Million

Country, Supplier,CISCO Supplier,Quality Ratings

PartShared

PurchasingData

GPS

DatastoreMultiple IPCs

Steel Parts

DSM = D

Tooling POs

Units Of Measure,INCO Codes

EISIS

Contract

LEGACYDATA

Parts, Volumes, Suppliers, Contracts

SupplierQualityRatings

SPDI, MPCE

ContractSavings

Savings

GPS-Contract Savings

Contract Savings Architecture

•

Contract Savings File

CS Adjustment

GPS

DB2

TROY SQLServer

Stored Procedurefor Merging Contract Savings Batch and

Adjustment data and create MDB files

MDB files

MS IIS ServerASP Pages

GPS APP Center

MS ACCESS

FTP Contract savings file

PLIPC1B

Mainframe at PLANO

USTRSGSCM025

CS Web Adjustment

CS Reporting

CS Batch Process

USTRSGSCM025 Update ADJMNT / ADJMNT_DTL SQL tables

User Downloads Detail, Summary, Left Side, Variance and Exception report MDB files.

Using SQL server DTS store Contract Savings File into SQL table.

Contract SavingsBatch Process

CS-1Extract and Prepare

Timeline records(add Currency

Conversion Rate, addGPS CLI info., breakinto months, matchwith Volumes, etc.)

CS-2Calculate

Performance foreach monthly

record

CS-3Add Action Plan

Information to eachmonthly record

CS-4Send Contract

Savings file(s) toReporting Server

CONTRACT

SAVINGS

BATCH PROCESS

When Contract Savings batch process run?

• The creation of Contract Savings information is expected to be a weekly batch process, which runs after the jobs to post GPS and Legacy contracts to Timeline.

• The Contract Savings Batch Process must run immediately after Posting to Timeline because given the way the Contract Savings Part trigger(s) are created, this is the only time when the GPS Contract data, Timeline Contract Data, and Contract Savings Part trigger data is synchronized.

• The Contract Savings Batch Process relies on the fact that this data will be synchronized to work properly and to report correct, consistent results.

Contract Savings Release 1.0, December, 2000

• This release implemented when the GPS Contract Savings Batch Process to calculate Contract Savings finalized.

Contract Savings Release 2.0, Currency Conversion Release, December, 2001

• Released when the Currency Conversion method for Contract Savings was modified to:– Report contracts for European receiving plants in EUR

instead of USD. Approximately 95% of European contracts now have a currency of EUR. Reporting these contracts in EUR instead of USD will lessen inaccuracies due to currency conversion from European performance data. USD and EUR are the only valid destination currencies etc.

Contract Savings Release 3.0, Part Relationship Release July, 2002

The original design of Contract Savings only looked back one generation of replaced parts and then only at confirmed replaced part relationships.

This led to many parts having no performance calculated or performance being calculated against Costbook because an Old Price could not be determined.

A great deal of manual effort was then spent to track down what the performance for a part should have been and add the resulting information into the Contract Savings Adjustments application.

Contract Savings Release 3.0, Part Relationship Release July, 2002

• This led to many parts having no performance calculated or performance being calculated against Costbook because an Old Price could not be determined.

Contract Savings 3.1, Net Material Performance Release, March 2003

• An issue was discovered with the Option Adjusted Forward (OAF) rates maintained by NYTO and the algorithm defined for currency conversion. Because of this issue the currency conversion algorithm for future months is being modified to use the rate most recently provided by NYTO for that month.

Contract Savings Adjustment (CSA)

The Contract Savings Adjustment (CSA) module enables users to enter, maintain, and view adjustments for Contract Savings in the Contract Savings process in GPS.

The users of the CSA module will interact with it through multiple pages and through graphical data selections.

The Contract Savings Reporting Database merges the contract savings adjustments with the contract savings from GPS.

Contract Savings Adjustment (CSA)

The CSA module is comprised of the following page types:

1.Adjustment related– Enables adjustment inquiries, modifications and additions. This

first page enables entry and viewing of key adjustment information.

2.Security related– Login, User Maintenance, Change Password Etc.

3.Feedback– The Feedback module provides all General Motors users the

ability to send written feedback to the System Owner via E-Mail regarding the CSA application.

Contract Savings Reports

The Contract Savings Reporting Database merges the contract savings adjustments with the contract savings from GPS.

Using Contract Savings Reporting Database following reports are created– Summary Reports– Variance Reports

Analysts use the Reports to identify which records has changes in their performance (savings) from one reporting cycle to the next.

Contract Savings 4.0

• Client: GM WWP IS&S

• Customer: GM WWP Cost Management

• Other Stakeholders: GM WWP

GMASB

GM Supply Base

GM Platform Management Team

GM SMTs


1.Commercial Savings: Part relationships are not confirmed in GPS in many cases. These relationships are crucial to calculating savings as part numbers change due to EWO’s. Contract Savings compares today’s price to the price on year ago to measure part performance, then tracks how engineering changes have affected that price in order to derive purchasing performance.

2.Contract Savings will be used as the GMNA common system to track material cost. This means that Engineering Performance (Technical Savings) will be tracked from the system as carefully as Purchasing Performance (Commercial Savings). This will require enhancements to the system to allow adjustments to Engineering Performance, and perhaps other changes (Web Adjustment tool).


3. Need to be able to track savings (Commercial and Technical) by product line. Currently, volume records do not have required product line information.

4. In order to globalize the system, enhancements will be required due to Brazil’s savings calculation against an index of inflation and devaluation. Similar issues may exist in Asia Pacific.


Goals of Contracts SavingsThe two primary goals of the project are:• Reduce the amount of manual reconciliation required

to provide accurate Material Performance Tracking Information

• Utilize a common Contract Savings reporting process for GM

Scope of Contract Savings 4.0

• The following changes are in scope• 1. Changes to the contract savings master file• 2. Changes to GPS• 3. Changes to the Contract Savings Web• Adjustment tool • The following changes are not in scope:• 1. Changes to legacy system data feeds to GPS• 2. Changes to WWP/Financial savings definition

and policies• GPS changes not directly related to contract savings

Action Plan

• An Action Plan is a document that is created by a buyer to solicit pricing information for parts from available suppliers who produce these parts.

• This is accomplished by issuing Request for Quotes (RFQ) to selected suppliers, updating this information in the action plan and submitting a recommendation for an award.

Action Plan

• There are five types of action plans for Product Purchasing:

1. Advanced Purchasing Action Plan—new parts not production released.

2. Global Sourcing Action Plan—parts released and on current contracts.

3. Supplier Negotiation Action Plan—price changes with current supplier.

4. PICOS Action Plan—workshop at supplier’s facility.5. Value Management Action Plan—similar to PICOS,

only on a broader scale.

Education

Contract savings new