30 October 2008

FSC servers are renowned for their energy efficiency

Fujitsu Siemens Computers has improved its supply chain with a SharePoint installation incorporating a new e-portal, advanced search functionality, content management and team collaboration tools. Mark Webb reports.

Fujitsu Siemens Computers (FSC) uses its supply chain as a positive force to propel its business, always seeking operational efficiencies and using technology to develop its business strategy.

Gerwin Dollinger, the company’s director of corporate logistics, order fulfilment, says that excellence in the supply chain is embedded in corporate strategy. There’s proof on the office walls and on PowerPoint slides in the form of various industry awards. Dollinger picks out the European Supply Chain Excellence Awards 2003 as indicating excellence throughout the organisation and the Bavarian Quality Prize 2006, which is open to countries across Europe and is particularly vigorous.

FSC has two key technology partners in Microsoft and SAP and aims to be 80-90 per cent based on these technologies within the next three years. “This has a very positive effect that I need only very few specialists on board. There’s not a huge team required and I have highly specialised people on one technology which eases and accelerates integration,” says Boris Lisac, leader of Web applications.

“With SharePoint 2007, it’s a full-blown portal server, which it wasn’t in the past,” says Lisac. “We decided to use this portal server for many web-based capabilities and fully integrate them into our existing corporate platform. We have already replaced two proprietary document management systems as part of our adoption of SharePoint. Both have been replaced by one solution that is now part of SharePoint. Our Account Portal which is a .NET/SharePoint application is fully integrated with SAP and Siebel customer relationship management (CRM).”

An account manager creates a product catalogue in Siebel, which he or she then transfers to an account portal, where the respective customer can log in and see the catalogue and order from it. By clicking ‘order this now’, the customer can send an order directly into the SAP system. The customer can also use the portal to see the order status. Lisac adds that the revenue from this ‘e-channel’ is increasing well.

More than 60 per cent of professional PC orders placed with FSC are for configured-to-order or customised PCs. Demand forecasting needs to be alert to the market’s requirements and the supply chain needs to be fast and flexible to precisely fulfil orders.

FSC’s big accounts and partners place orders by electronic data interchange (EDI) but customers also order by Web-based order entry tool that can capture the customer’s desired PC specification. A small number of orders may be handled manually. Using CRM, FSC also goes to some customers with preconfigured, prepriced and project-based packages and, says Dollinger, clicking on one button places the order.

The sales system checks each order to clear export regulations, credit rating and other business rules, with all ‘clean’ orders progressing to the factory system. The system checks the customer’s requested delivery date and adjusts it if necessary within the built to order lead time. In an industry that has a product lifecycle of three to five months, retailers have to keep up with demanding consumer behaviour. So, working with its customers on the high street, FSC prepares tens of thousands of PCs to meet exact marketing campaign dates.

FSC’s ‘plan, make, source, deliver’ model undergoes continuous improvement, says Dollinger. A balanced scorecard system provides management with a clear picture of areas such as delivery, lead times, costs, quality assurance and transportation. Department managers can thus recognise areas for change and react quickly. Country managers get involved in forecasting so that the figures reflect their knowledge of the order book. An expert meeting reviews the forecast figures, when product, logistics, manufacturing and sourcing managers are present to discuss risk factors.

Sales forecasting and advanced planning, at model and component levels, feeds a rolling forecast to suppliers, which number in the thousands and 90 per cent of which are based in East Asia. Managing risk is a high priority, mixing sea and airfreight deliveries for cost optimisation, watching out for component shortages and alternative suppliers, sourcing globally but keeping buffer stock in a warehouse near the factory. All orders are electronically broadcast by SAP to the factory floor within a certain time frame, where they are handled by a proprietary shopfloor system.

FSC uses connectors to suppliers’ IT systems to implement EDI but there are a lot of different protocols and Dollinger says he thinks there are opportunities to use SharePoint to manage this interface. FSC is also looking to work with partners in the supply chain to implement RFID to track materials and products. It already works with a German retailer by tagging pallets for its shops with RFID. On the other hand, Dollinger points out, the electronics and semiconductor industry is very competitive and cooperation isn’t a straightforward process.

After its very successful first project with SharePoint, FSC then replaced its old extranet solution with a SharePoint Web Content Management System (WCMS) extranet, which has only recently gone live. SharePoint provides customer account management and security more or less out of the box, says Lisac. Service and sales partners use the extranet and thousands of users have registered with the site so far. SharePoint has completely replaced the Unix platform, further concentrating the Web on Microsoft technologies.

The next stage now being trialled is extranet collaboration. FSC staff running a project with a customer or partner can create a project space in which to share documents, a calendar, or write a blog. “We have about 30 pilots running at the moment,” says Lisac. FSC already has several hundred sites for internal collaboration, where FSC employees use team calendars, holiday approval forms, hiring approval workflows and software release announcements. Based on SharePoint’s out-of-the-box functionality several of FSC’s leading managers have their own blogs. Workflows are created on request from a business manager using a SharePoint plug-in which can be done on a consultant level. “We are able to avoid programming solutions.”

Based on FSC’s principle ‘we use what we sell’, SharePoint runs on the most powerful servers, the Tblade Primergy and BladeFrame servers in a Dynamic Datacentre environment, allowing the dynamic provisioning of resources. “It’s absolutely great,” adds Lisac. “I’m working at the application level and if more power is needed , it only takes me one phone call to ask for two more CPUs and two more gigs of RAM and I have it. I love it.”

Lisac says that SharePoint reduces costs on licenses and on operations. “At the moment I support four major platforms and many many applications. By consolidating this to one major platform, SharePoint – and SharePoint is able to do this – we are saving money on operations.” As a strategic technology, FSC anticipates SharePoint becoming more and more a part of its business. “Usage scenarios will appear, some we can’t even think about at the moment,” says Lisac. FSC anticipates that new ideas will come from different departments and partners about how to leverage SharePoint capability, to be more productive, to work better with partners and end users and its use will evolve over time.

The supply chain process continues even after system delivery and includes an environmentally friendly element that squeezes every last drop of value out of the PC hardware and electronic components that travel through it. Dietmar Mormann, who is responsible for the recycling and remarketing centre in Paderborn, says that recycling is carried out in each sales region to meet local legislation and to avoid transportation costs and remarketing is done only in Germany, with products that are gathered in globally.

The remarketing department works closely with the FSC sales department to alert customers to a need for particular equipment. It’s important to get the timing right because it’s difficult to sell, for example, a used PC if it’s older than three or four years. Most are between two and four years old when resold.

“If there is someone who wants to buy it and we can technically refurbish it, then we will sell it to them,” says Mormann. “If not, we will scrap the machine and gather the different materials, either selling them or treating them as waste.”

FSC takes control of the process by offering new hardware with a buy back option. FSC pays the customer to trade in its old machine when purchasing a new configuration.

In Europe, the Waste Electrical and Electronic Equipment (WEEE) directive was activated in autumn 2005 but FSC started nearly 20 years previously with a business doing many similar things that it does today. Indeed it was intimately involved in the translation of WEEE into German law. FSC isn’t happy with sending equipment into situations where it can’t track the materials because it is legally responsible for their correct treatment. “We want to be absolutely sure that the waste is treated in the right way,” says Mormann. The German recycling unit has the capacity to process 8,000 tonnes per year, gathered in from business customers. A normal truckload contains between eight and 12 tonnes.

The recycling department gives its experience back to the development department, holding workshops for engineers who later design the next generation of PC. In the dismantling workshop, engineers get to work on computers they designed a few years previously – sometimes with tears in their eyes, says Mormann. The aim is to help them design PCs that are recycling-friendly and to help improve the sorting of pure materials, for example by keeping glue out of the design.

FSC’s involvement in its products is truly end-to-end, from its Asian suppliers to the recycling plant. The supply chain has been made more responsive for the customer by developing the e-portal in SharePoint. Collaboration technology to enhance communication with suppliers promises to sharpen response at the beginning of the story. It all adds up to supply chain excellence at the beginning and the end of the PC hardware lifecycle.

This article first appeared in the Summer 2008 edition of Prime magazine.

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