Supplier Relationship Management

Demo

J.Madrenas,A.Fàbregues,C.SierraIIIA(CSIC)Barcelona

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Tableofcontents

Introduction ......................................................................................................................3

Application..........................................................................................................................4

Running the application ...........................................................................................5Introduce contracts .............................................................................................................. 5Introduce experiences ....................................................................................................... 6View contracts .......................................................................................................................... 8View experiences.................................................................................................................... 8Analyse Data .............................................................................................................................. 9

Analyse Trust ............................................................................................................................................ 9Analyse Suppliers ............................................................................................................................... 11Analyse Critical Order ..................................................................................................................... 14Analyse Cost Minimization........................................................................................................... 14

Help ................................................................................................................................................ 15

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Introduction

Nowadays, sourcing is a "problem" that many people deal with. It can be divided into three main blocks:

• Category Management: group together the products of a company which follow the same pattern. The output is the strategy to be followed by the company.

• E-Sourcing: electronic auction for the company categories. The outputs are the contracts to be signed by the company and supplier.

• Contract Management: review of the contracts and company evaluation. The output is an evaluation report and the next steps to take.

The Supplier Relationship Management Project (SRM) is a first approach to the E-Sourcing, second part of the sourcing company problem. SRM will give you support on decision making when selecting the best supplier for a new order execution. It is based on your past experiences with several suppliers.

The scenario of this demo, is the process through which a peer, or a peer’s user, may determine whether a potential contract is good enough to justify signing it. This judgement involves both discovering an appropiate offer and, which is more difficult, determining whether suppliers who may be involved in that contract are likely to perform it to a level which is judged good enough.

In the specific example used in this demo, it is based on orders, that are formed around three dimensions: product, quality and delivery day, in the context of writing instruments. We defined a similarity function for each dimension that is hardwired in the demo. But, this is not the only case where we can use our technology, we could apply our methods to any dimension, given that we define an ontology and a similarity function for it.

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Application

The SRM application has a main menu at the top of the application, which contains the options that a user is able to do, and a main frame where the different options selected are displayed.

Fig. 1 SRM Application

Before the user starts running the application, some concepts have to be explained: · This application is based on contracts and experiences.

· A contract is formed by the supplier with which you signed the contract, a

commitment and the preferences about this commitment.

· An experience is formed by a commitment and an observation.

· A commitment is formed by a supplier who commits to an order, the order commited,

and the time of the commitment.

· An observation is formed by an order, and the time of the observation.

· An order is formed by a product, a quantity, a delivery day and a prize.

A detailed description of the menu options is explained in the different points below.

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Running the application The first thinganuserhas todo for testing theapplication, is to introducesomecontractsandthentheexperiencestoanalyse,eachexperienceisassociatedwithonecontract.

Introduce contracts Therearetowaysforintroducingcontracts:·Importingcontractsfromafile.OnthetopmenuFile>Import>Contracts,youcanselectcontractfilestobeimported.Thisfilehasaspecificformatfortheapplication,designedbythedevelopers.·CreatingcontractsfromtheContractspanel.OnData>Add>Contracts,youcanaddcontractsindividually.Youmustspecifythedifferentdimensionsofacontract,andyourpreferences.

Fig. 2 Add contracts panel We will represent the contract preference for each contract dimension as afunction:

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Fig.3PreferencefunctionThisfunctionisspecifiedby5parameters:·Selected:thevalueselectedinthecontract.

·Mintolerance:minimumacceptablevaluefortheitem(intheproductdimension

istheminimumsimilarityaccepted).

·Maxtolerance:maximumacceptablevaluefortheitem(intheproductdimension

isthemaximumsimilarityaccepted).

·G1(1,2,4,7):leftslopeofthepreferencefunctionfrommoreslopetolessslope.

·G2(1,2,4,7):rightslopeofthepreferencefunctionfrommoreslopetolessslope.

Introduce experiences Experiencescanbeintroducedby:·Importingexperiencesfromafile.OnthetopmenuFile>Import>Experiences,youcanselectexperiencefilestobeimported.Thisfilehasaspecificformatfortheapplication,designedbythedevelopers.·CreatingexperiencesfromtheExperiencespanel.OnData>Add>Experiences,youcanaddexperiencesindividually.Youmustassociatethenewexperiencewithanexistingcontractandcompletetheobservationparametersbeforesavingit.

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Fig. 4 Add experiences panel

· Generating multiple experiences. On the menu Data > Generate > Experiences you have the possibility of generating experiences automatically. As we said before, experiences must correspond to an existing contract. The values of the dimensions of the generated experiences will be extracted randomly from a normal distribution, so you have to specify the mean value and standard deviation of each order dimensions (Product, Quality, Delivery day and Price in the example of Fig. 5) and the number of experiences to generate.

Fig 5. Generate History Panel

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View contracts Atanytime,theusercanconsultthecontractsofthehistorybygoingtoData>View>Contracts.

Fig 6. Contract History Panel

View experiences Asthecontracts,theexperiencesofthehistorycanbeconsultedbygoingtoData>View>Experiences.

Fig 7. Experience History Panel

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Analyse Data

Once contracts and experiences have been introduced, the user can start analysing results clicking on the top menu option Analyse.

Analyse contains different options about how to analyse the data.

o Trust o Suppliers o Critical Order o Cost Minimization

Analyse Trust

The Analyse > Trust option gives you the possibility of analysing the trust evolution over time from a given commitment. So, the first thing we have to do, is to complete the order commitment and then evaluate trust.

After clicking the Evaluate Trust button, the charts on the right will be painted, there are three possible views to analyse the data:

• Probability Distribution (P): shows a chart of the Probability of the terms similar enough to the commitment. The terms are arranged on the x-axis considering their increasing similarity value with respect to the commitment. Two arrangements using bars and points can be observed below. At each time step P changes considering the commitment and observation of the corresponding entry in the experience history.

Fig 8. Bar chart, representing the probability distribution for the current contract

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Fig 9. Points chart, representing the probability distribution for the current contract

The time line represents the evolution of P, by changing its value on the sliding bar, it is possible to observe the corresponding P at a particular moment in time.

• Trust vs Entropy Evolution Chart: shows a chart with the evolution of the Trust vs the entropy, for the given commitment over time. The time evolution is defined by the entries in the experience history as aforesaid. The last point in the chart represents the current Trust value for the given commitment.

Fig. 10 Trust vs Entropy chart

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Trust can be customized in order to change its behaviour by clicking the Params button.

The configuration parameters are:

• v: (decay rate) sets how slow P goes back to the default probability distribution D. That is, in case that no observation happens during a unit interval of time.

• Minimum overall similarity between commitments in the history and the current commitment, to consider that one commitment in the history is meaningful enough to affect the assessment of P .

• Nex: number of experiences with a supplier about a certain commitment, necessary to fully consider the influence of a new experience to assess P. •Inertia:a parameter to regulate the impact of an experience in the variation of measures. The bigger the parameter, the lower the impact, that is the more 'inertia' the measures will have.

Analyse Suppliers

Analyse > Suppliers option, analyse suppliers by similarity or satisfaction between the commitment and the observation, showing a ranking from the best to the worst supplier and a set of charts representing the comparison between two suppliers from each dimension of the contract in time.

Fig. 11 Supplier Analysis panel

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The user can do a General analysis, taking into account all the experiences of the history, or specifying an order, by selecting the radio button “General” or “Specifying an order” (see Fig. 11). Also, you can select the checkboxes of the components of the order that you want to analyse graphically, and the two suppliers to be compared.

The result charts given by the application when the user clicks the button submit are:

· Contract Performance Chart: Gives you an idea of your suppliers behaviour with respect to contracts. Each point of the chart represents a supplier and the diameter is proportional to the number of experiences they had.

Fig. 12 Contract Performance Chart

· Spider Chart: Compares two suppliers on each dimension of the contract. Gives you a general idea of the behaviour on each dimension.

Fig. 13 Spider Chart

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· Product Chart: Compares the behaviour over time of two suppliers for product dimension.

Fig. 14 Product Chart

· Quality Chart: Compares the behaviour over time of two suppliers for quality dimension.

Fig. 15 Quality Chart

· Delivery Day Chart: Compares the behaviour over time of two suppliers for delivery day dimension.

Fig. 16 Delivery Day Chart

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Analyse Critical Order

OnAnalyse>Critical Order you have the option of classifying suppliers in a ranking from the best to the worse (ordered by trust), specifying a desired contract and the importance for each order dimension. For example, if you make an order, in which product and delivery day are not as important as quality (you want to prioritize the quality), you can do it by increasing the importance value of the quality dimension more than the other dimensions. In this way, user can establish a sort of priorities from the most important dimension to the least important dimension.

Apart from this, you can graphically analyse the suppliers by means of a suppliers chart (trust, entropy), each point corresponds to a supplier and the diameter is proportional to the number of experiences.

Fig. 17 Critical order panel

Analyse Cost Minimization

Another option to analyse the data, is the cost minimization analysis that can be found in the Analyse > Cost Minimization top menu.

For this kind of analysis, specifying a desired order to minimize the cost and the levels of satisfaction that we want for each order dimension, the application is capable of indicating in a pie chart the percentage of orders to buy to each supplier to obtain the minimal cost for the specified need and satisfactions.

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Fig.18 Cost Minimization panel

Help Help contains some tips and information about the application.

Fig 19. Help Panel