POSCO-ICT 2011 New Employees training

Marketing System Concept

Table of Contents
. Marketing Business 1. Introduction 2. Main Tasks of Sales Reps . Marketing System Overview 1. Marketing System Map 2. Definition of Process Chain 3. Definition of Process Unit 4. Process Flowchart 5. Main Screens

. Marketing Business 1. Introduction 2. Main Tasks of Sales Reps

1. Introduction

1. What am I supposed to do?

Starting today, you will perform important tasks as a sales rep.

Hmmm. Sir, what am I supposed to work on?

Now go to work

Daily work as Sales Reps

1. You, as a sales rep, start your day by checking key stats from previous day

2. You will also check out shipping volume and receivables of the day

3.Think: What does my customer require of you?

4.What are the things I need to improve?

Ask Yourselves these questions:

Are my customers orders progressing without problems? Any potential delays in delivery?

2. What are my periodicquarterly, monthly, weekly, and daily responsibilities?

Shouldnt we also go over pricing strategy? Guy next to me is saying I need to do ship allocation. Dont forget quarterly offers and deals!

I need to build sales plan.

What about market surveys and demand forecasting?

2-1) Domestic Sales Workflow (e.g. POSCO )

Quarterly MFG Planning
-Finalize Per-Product Order Quantity
(Sales and Production Planning)

Quarterly Sales Planning

-Finalize Per-Product Sales Plan
(Contracts Department)

Sales Planning By Destination

-Finalize Per-Customer Sales Plan
(Contracts Department)

Weekly PerCustomer Sales Volume Adjustment

(Contracts Department)

Monthly MFG Plan Adjustment

-Incorporate MFG Actuals
(Sales and Production Planning)

Sales Plan Notification

-D-45 to Quarter Start Date

Order Input/Entry
-Weekly
(Contracts Department)

Collection MFG (Production) /Shipping

-Credit Sales of D+40 as of the end of month
(Varies depending on each product/customer)

 Quarterly Tasks
Tasks Description Factoring in Sales strategy / MFG Plan / Demand Industry Market Conditions / Sales conditions - Customer Demand Survey Adjust MFG Plan Per product/Per Destination/Per Customer Determine Sales Terms - Determine Credit Sales Period per Customer "base" pricing adjusted as needed Operating Income Sales Volume of Strategic Products Customer Satisfaction Optimize sales mix Innovation activities, etc.

Formulate Sales Plan

Assess Pricing Determine discount rate per customer outside from the Strategy Update/Roll Key Performance Metrics

 Monthly Tasks
Tasks Adjust Sales Mix Description Following Quarterly Rolling Business Plan, incorporation of previous month's actuals and current month's plan - Set up Per Plant MFG Plan , product mix, bottle-necked material, etc.

Input customers' demand forecast-driven sales plan into Formulate System Shipping Plan Build per product/per department shipping plan based on inputted value in System Customer & Market Trend Surveys Identify customers' production/sales/inventory status Identify output trends of onshore and offshore steel mills Domestic import trends Capture Price trends of secondary products Capture domestic inventory levels of steel material/products

 On-going Tasks
Tasks Description Weekly Roll Rolling - Every week, between Tuesday Afternoon and Wednesday morning - Feed previous weeks weekly actuals and compute perproduct order volume Order input starts on Wednesday morning - Input orders starting with Week+1 and Week+2 Roll progress management by destination and by customer Monitoring MFG status monitoring to meet MFG/delivery due dates - Check status by order line item - Query product history per line - Check delivery result Process advances/charge interests on past-due payments

Order Input/Entry (Weekly)

Product Delivery

Collection

2-2) Export Workflow ( e.g. POSCO )

POSCO
Finalized Quarterly Order-Taking Target Develop Quarterly Export Offer Plan Run Export Offers Loading Receive Acceptance
Finalize Quantity/Price/Delivery Date

Trading Companies/ Customers

POSCO

Trading Companies/ Customers

Publish WL/MS Customs Clearance (Customs Broker)

Departure
Nego (3 Business Days including B/L Date)

Receive Orders Production Management Ship Allocation

Create Orders

(4 Business Days including negotiation date)

Collection

Payment

Task
Finalized Quarter OrderTaking Target

Description
Quarterly MFG Plan Quarterly Sales Planning - Finalize domestic and export sales (order-taking) targets Gather market intelligence - Customer trends, market demand & supply and competitors price trends - Offshore offices and trading partners - Customers & Trading Partners Interview Documents - Steel Journals and Newspapers - Assess Trade Dispute Potential Formulate Rolling Pricing Strategy by Product and by Region Develop Export Offers by Region and by Customer - Optimize Sales Mix driven by Regional Needs/Characteristics - Determine Volume and Price based on Customer-specific needs/characteristics (E.g. Long-term captive customers, high operating income customers, etc.) Send Offers by Trading Partner and Direct-Sales Customers - Specify contract terms including quantity, price, order-taking conditions, due dates, etc. Methods: document-based or oral offers - Validity : Typically 7-to-10 days after running an offer - When offers are not accepted, take the following measures: Extend Validity of an Offer Re-submit an price/quantity-adjusted offers or if not amenable, submit the offer to other regions or different customers

Develop Quarterly Export Offer Plan

Ship Allocation

Task
Receive Acceptance Details

Description
As a token of acceptance of POSCOs offers, trading partners close deals with customers and sends offer-acceptance details to POSCO Input Export Deals Status Info by Product and by Region for closed deals. Create Per Customer Roll Input Plan based on Monthly Roll Input Plan. - Customer-requested delivery due date - Specifications - Schedule ship allocation schedule for relevant region - Factor in other regions and customer requests, etc. Manage Order Progress per Customer and per Trading Company Track MFG progress and Check whether L/C is open on D-10 to MFG delivery date and MFG delivery date Export Shipping Team performs Ship Allocation (CNF) - Check Ship [Vessel] name, arrival date, departure date, gross tonnage Manage frontline trading partners to ensure frill-free loading of shipments - Careful management is required for FOB ship allocations because vessels are allocated by trading companies. - Ensure past-due date leftovers are consumed [shipped] in full.

Receive Orders / Production Management

Ship Allocation

Task
date]

Description
Performed on the 3rd business day from B/L date [i.e., inclusive of B/L

- Export via Trading Company Required documents: Application for Local Draft Negotiation; Tax Invoices; Local L/C, Application for Reimbursement against Local Draft

Nego

Negotiation, Bill of Exchange, etc. - Direct Export

Local Documents Arrival Notice, certificate of receipt,

Required documents: B/L, Invoice, Packing List, *Certificate of Origin, *Inspection Certificate, *W/S, *M/S, etc. (* marked documents are issued upon customers request)

Collection

Payments are deposited by Trading Companies to the opening bank of local L/C within 4 business days from the nego date

Task

Description

Develop Shipping Final Sales Forecast output are used as Shipping Targets What is Final Sales Forecast (FSF)? Plan - Sales and Production Planning Team computes FSF numbers (Monthly) based on initial sales forecast numbers inputted by individual team Profitability Analysis (Monthly)
MPI or DW system is leveraged to obtain Operating Income per Hour, Margin Per Hour against costs per product, per region and per customer for analysis. Used as an input for Sales Mix optimization Used as an input for Export Offers Planning

Sales Mix Analyze changes in demand over previous month or actuals Adjustment - Product mix, bottlenecked products, etc. Meeting (Monthly)

Task

Description
Capacity available from 10:00 every Wednesday - E.g. 07. 2. 7(Wed.): Baseline Dates and Capacity 2/192/25 : Roll Input available to all Sales Teams 2/263/ 4 : Roll Input available to all Sales Teams 3/ 53/11 : Roll Input available to all Sales Teams 3/123/18 : New Open week (Roll input available to Automotive Steel Sales Team) Manage Roll Input Progress per Customer Order Status Management Shipping Status Management Vessel Tracking & Management

Manage Roll Input (Weekly)

Day-to-day Operation (On-going)

Production Status Management Inventory Management Ship Allocation Status Management CRM Margin Receipts Status per Trading Company

3. What else am I tasked to do, aside from sales?

Im a quality guy. What do I do? Im a planner.

MFG process control?

Am I supposed to formulate strategy?

What about material purchasing?

2. Main Tasks of Sales

Sales & Production Planning

Develop sales and production plan Perform sales system related and improvement activities

Sales
Develop domestic and export sales plan for cold-rolled products and make sales

Production Order and Process

Compute production capacity, develop production order and input plan, and order status management

Logistics/Revenue Management
Logistics planning for domestic and exports; and shipping/delivery activities Revenue accounting

Material Purchasing

Material purchasing based on the production planning Material cost accounting

Sales and Production Planning

 What is the Sales & Production Plan ?

* It is a basis for companys business plan and serves as a sales and production target. * It is a basis for calculating sales and standard costs. * It establishes material supply plans for pre- and post-processes and helps smooth production. * It serves as a basis for other plans established by other departments such as purchasing/finance departments. * Based on demand forecast, the production plan is established reflecting previous production records. * Quarterly rolling plan: As a basis for business plans, quarterly budget plans and sales plans, it is set for coming 16 months (four times a year). * Monthly rolling plan: As an action plan, it serves as a production target for production and operation plants and is set for coming eight months (eight times a year). * Sales plan: When establishing quarterly and monthly rolling plans, each sales team decides sales amounts based on production plans.

 Process Chain for the Sales & Production Plan Start Boundary
Purchasing Information

End Boundary
Sales Plan For Each Customer

Process
Supplier Custome r Inputs - Monthly purchase order * Unit: by planning item * Considerations Customers monthly sales/production plan Inventory Material delivery forecast Sales Person Operatio n Dept. Purchasing share of each buyer - Customers demand forecast - Repair plan, specification

Start
Demand forecast Sales & Production Plan Production Capacity Calculation Order Taking Plan

End

Outputs

Customer

- Monthly sales plan Customer for each item Contracting Dept. -Production plan for Operating Dept. each plant Financing Dept. - Sales plan for each Repair Dept. product and department Purchasing Dept.

Process Step
Sales Production Plan Production Capacity Calculation Order Taking Plan

Purchasing Information

Demand Forecast

Sales (Order Process)

 What is the order process ?

The order process is all the pre-production processes including order input, quality design, material match, delivery assignment, price assignment, and order confirmation which are carried out to produce products that meet customers requirements when the customer places an order after making a contract with the customer on the price and quantity of products that are to be sold quarterly (annually or twice a year for special cases). Order Process Definitions Order Process
Order for material purchasing Plan & Forecast Order - Plan Order : There is no customer for this order - Forecast Order: There is a customer order, but no material, so we should buy material to produce product Write an order to produce products according to customers requirements. Regular Order Salesperson, Material buyer

Definitions

Order Compiler

(Before giving the plant a production instruction, the marketing department decides materials suitable for the order.) Products available for regular orders have quality design standards which are defined through development processes.

Salesperson, Material buyer

Stock Sales Order

Based on agreement with the customer, write an order to sell stocks of products that are produced in a way of Make to Order and stocks of products that are downgraded because they failed to meet customer requirements.

Salesperson

 Process Chain for the Order Process Start Boundary

Supplier Input
Order - Customer - Order Type - Product - Order Size - Quantity - Standard Code - Usage - Delivery Date of Choice - Packing Weight - Material Supplier Mill - Destination :

End Boundary
Output
Delivery -Deadline Price Quality Warranty Production Method Work Order - Production Due

Process

Customer

Customer Sales Team

Order Process

Customer Sales Team

Process Task
1 2
Quality Design

3
Material Match

Order Input

Order Capacity Check

Assign Delivery Due Date / Price

5
Order Confirmation

Production Order and Process (Progress Management)

1. Definition: Progress Management

Progress Management is a business process that involves (1) booking orders based on production lead time that is defined and maintained per MFG process in order to produce and deliver customer-ordered products within the due delivery date committed to (i.e., as per contract) at the order-taking time, and (2) monitoring, controlling, and coordinating entire order processing process (order finalization-production-shipping-transportation/delivery).

27/24

2. Scope and Roles/Responsibilities

Customer Order (Marketing) Order Entry/Common & Required Assign Due Date/Pricing Quality Design (Plant) [Work Order] Input Plan (Plant) Work Order Production (Plating-Receiving) Final Quality Judgment (Marketing/Plant) Shipping Plan Transportation Management (Warehouse, Intermediate Warehouse) [ Progress Owner] DB Order Status Address Abnormally Progressing Order/Material - Adjust early/late progressing orders against due dates - Adjust Abnormally Progressing Material, Past Due Date Material Create Purchased Material Data - Create data of Material purchased from POSCO and other Steel Companies [ Roles ] Order/Material Progress-Status Monitoring - Inhouse: Share information via Progress Management System (PMS) - External: Steel-N.com(Web)

MFG Actuals Management (ERP) - MFG Job Actuals Management (WIP) - Goods Receipt/Issue Management (INV) - Issue MFG Quick Update Report

Product Arrival@Customer

3. Progress Management Business Process & Tasks

Task1 Order Progress Management Monitor Progress by status from Customer Order Taking to Product Delivery - Identify early/normal/late progressing orders against due date per order line - Provide Progress Info to in-house and external customers

Task2 Progress Status Monitoring from Material matching to Material Progress Product Delivery Completion Management - Identify Normal/Abnormal Progress Status per Material (Material, Product) - Make and deliver products within due date and reduce inventory costs via Abnormally Progressing Material Handling Task3 Abnormal Order Handling Abnormally Progressing Order( Order_Line ) Handling - Increase or decrease input, close or terminate MFG/Shipping/Delivery - Suspend (hold)/resume MFG/Shipping/Delivery - Adjust Product Packing Unit Weight Range (Abnormal Unit Weight Material Handling)

Task4 Abnormal Material Abnormally Progressing Material( Material, Product ) Handling Handling - Material: Unassigned Material Allocation, Reallocation (purpose change), MFG hold/resume, Over Roll Force-Pass/Clear - Product: Order-matching, Reapplication, Scrap processing, suspend/resume request for sales Task5 Create Purchased Material Data Create Data of Material purchased from POSCO and other steel makers - Create Material ID (Number); and Register Steel-making to Cold-Rolling History Data - Material Management Business Process; Feed to MES

Task6 MFG Actuals Processing

MFG Actual processing and payments for individual process from receiving to product delivery for Material Purchases of Previous Day/Previous Month and feed the data to ERP ( WIP,INV) - MFG Actual Management per process, intra-process Goods Receipt/Issue Management

Logistics and Revenue Accounting

 Sales [Outbound] Logistics

Categories Key Tasks - Develop basic guideline on transportation and unloading; make transportation and unloading contracts; and make payments - Manage logistics cost, metrics - Drive logics related outside activities (i.e. government agencies) - Export shipping and ship allocation planning - Freight dedicated export/normal vessels and ship management - Create and execute logistic improvement plan - System development and maintenance for shipping area - Develop and manage shipping plan - Consolidated enterprise transportation scheduling and shipping orders - Manage product/equipment progress/status until products are delivered to customers - Product receiving/release/storage/receipt-issue - Manage transportation quality of trucking company and unloaded products at the docs for marine transportation - Manage loading and unloading of products - Operations management of product dock and port

Planning & Contracting

Shipping (Transportation) & Activities Management

 Transportation Cost Payment Flow

Suppliers

Proposal for contracting Domestic freight Delivery completion

Monthly freight of truck and cargo train Monthly freight of coastal transportation

Monthly unloading expense AP Invoice

Approval

Marketin g

Transportation contract
Export freight

Registration of arrival Manual

Export freight per outbound date

Factory warehou se

Products Invoicing

Arrival at customer

Automated

ERP GL

Incurrence of freight and unloading expenses pursuant to delivery conditions

Truck Category 1A(9A), 1B Freight
Unloading expense

Train 2A X X 2B X X

Coastal transportation

Export ocean transportation

Prime Products

1C(9C), 1D X

3A

3C(8C), 3D(8D)

6A, B, C, F

7A, 7B X X

X X

X X

(: Incurred, X : Not incurred)

 Transportation Cost Settlement process chain SIPOC Start Boundary End Boundary

Supplier

Input

Process

Output

Customer

Sales team Product delivery team Carrier Shipping company

Transportation contract terms and conditions - Delivery condition - Destination - Carrier - Delivery volume Payment terms Verifying receipt of waybill Arrival information Foreign currency exchange rate information Supplier information

Settlement of freight

Supplier information Transportation volume Transportation amount Amount in foreign currency Payment terms Bank Bonded warehouse information

Carrier Shipping company Finance Team

Process Task Registration of arrival Delivery completion Applying foreign exchange rate Calculation of freight Invoice generated

Approval

 Billing Process Execution flow

Customer

ERP GL AR invoice

Customer Order Unit Price Unit price correction Calculating revenue Sales cancellation
Issuing tax calculation statement for domestic transaction

Bank

Marketin g

Inventory issuing Invoices acceptance

Approval Issuing statements of advances from customers and credits

Domestic Negotiation arrangement Export Issuing export negotiation documents

Warehou se (Other sectors)

Daily delivery

Major checkpoints for each billing process

Process Sales cost Cost adjustment Calculating revenue Reflecting changes in delivery terms Unit price correction Sales cancellation Issuing Issuing tax negotiatio calculation Prime Products n statement and bill documents X X

Domestic Export

(: Execution, X : Non-execution)

 Billing Process Chain SIPOC

Start Boundary
Supplier Input
Delivery record - Delivery condition - Changed delivery condition - Destination - Payment terms - Delivery volume Ordered unit price Corrected unit price Volume of cancelled sales Foreign currency exchange rate information Information of vessel and vehicle

End Boundary
Process Output
Sales cost Cost adjustment amount Sales volume Product price (foreign currency) Freight (foreign currency) Change of amount upon delivery Calculated tax amount Bill summation amount Negotiation bank

Customer

Sales team Product delivery team Claim-processing team

Sales Settlement, Billing

Customer Sales team Bank

Process Task Sales cost Cost adjustment Calculating revenue Sales amount adjustment Invoice generated Approval

Material Purchase Orders

 Process Flow

Material balancing
- Prepare mid-long term material requirement - Build MFGConsumption plan

Determine target materials to purchase

- Order-taking analysis on available steel grades - Determine steel grade, size, and quantity

Negotiate with supplier (timeline, qty)

MFG MONITORING

Receive material data

-Receive MFG status per supplier - Determine supplier per steel grade Track MFG status per supplier :Mill Sheet (By e-mail) - Negotiate timing and quantity - Confirm production or file-to-file (Head Office)

POSCO Coil

Other companies Coil

EXCEL Upload data

(Excel DB )
-Store formatted materials data - in Excel (Program for upload) - Register materials date to the database

Create PO and AP
-Register PO in the ERP - Create AP

EXCEL Format data of materials Info

- Format purchase material in line with offshore production mills - Check integrity of info provided

Check data and send to MES

-Create purchased material info per - Coil (Charge) -Make corrections if necessary --Send to MES

Q&A

. Marketing System overview 1. Marketing System Map 2. Definition of Process Chain 3. Definition of Process Unit 4. Process Flowchart 5. Main Screens

1. Marketing System Map

Enter Bill

Payment (AP)

Transportation Cost

ERP (GSI)

Cost (CST)

BOM

Purchasing (PO)
Material Acquisition

WIP MDM QD
Production Performance

INV

Sales (AR)
Sales Performance

Budget/Sales Standard Measures

Shipping Performance
Shipping/Logistics Transportation Contract Mgt. Order to Ship Out

Sales & Production Plan

Demand Forecasting

Order Processing Register Orders Material Supply Design Results

Quality Design

Progress Mgt. Meet Orders

Production Plan
Sales Plan

Quality Design Item Number Material Spec Design

Material Processing Mgt. Order Processing Mgt. Incorrect Material Processing Register Purchased Materials

GMarketing

Set Deadline Calculate Production Order Capacity Capacity Set Price

Sales Management Sales Management

Order Plan

Confirm Order

Register Orders

Give Order to Material Order Start Production Management Predicted Detailed Material Order Capacity Material Spec Design Purchasing Plan Material Predicted Order Results Purchase Order Material Ware housing Mgt. Production Order

Shipping Performance

Material Warehousing

Operation Performance

G-MES

Standard Mgt.

Cold Rolling Control

Quality Review

Yard Mgt.

Cold Rolling

Shipping Control

Shipping Order

2. Definition of Process Chain

G-Marketing

The global marketing system provides standard functions for establishing sales and production plan (sales plan, production/calculation of ability to receive orders), placing orders for materials, establishing purchasing budget, accepting orders, giving orders to start production, quality design (material specification design), process management, shipping, and sales management for overseas cold rolling mills. Establish a production and sales plan by considering equipment repair plan, measures (Ton/Hour, Error Rate), and production based on the demand forecast data of the sales department. This plan is also used to maintain balanced production by establishing a material supply and demand plan in consideration of production volume and production data between processes, order in progress, and standard production period, so that customers are informed of the expected shipment date when ordering products.

Sales & Production Plan

G-Marketing

The person in charge of placing orders for materials refer to the (steel) product use plan by client and month obtained by the sales representative.

Material Order Management

Orders are placed by predicting the Hot/Cold coil materials based on the sales plans of each of the mills purchasing the products so that products are delivered before the deadline requested by the client, and at the same time inventory is maintained at a certain level in accordance with the production and sales plan. This process includes checking the order capacity after registering order details of products ordered by the client as well as error check on order information, item order number, deadline setting, pricing, and quality design before the sales team finally confirms the orders. The information on giving orders to start production (determination of factory and error rate by process) is edited before being sent to MES.

Order Processing

G-Marketing

Quality Design

This includes quality design for placing orders for materials which provides information on materials to overseas cold rolling mills for the production of products ordered by clients as well as product quality design function for product warranty design and production standard design. Quality design involves the main key for setting and managing quality assurance standards, production standards for managing production specifications that suit the characteristics of each of the overseas mills, and materials standards for managing the material quality characteristics by seller. This includes the management of the processes of placing orders for materials to increase the chance of meeting the deadline by taking necessary measures for incorrect orders and materials, and the provision of order processing data to the client and other related systems. This includes the management of processes by order and material to ensure on-time delivery of products in the quality standard as agreed in the contract when the order was placed by the client, and taking measures for incorrect orders and materials to improve the speed of delivery and prevent a bottleneck.

Progress Management

G-Marketing

Shipping & Logistics

This process involves organizing and managing shipping (allocation) orders for efficient management of transportation equipment and personnel in consideration of local environment and shipping conditions set by the client company. The management of transportation contracts includes shipping conditions for the materials and products and transportation costs by destination as well as warehousing, docking, and unloading costs. It also involves processing domestic shipping orders, overseas shipping, and shipping performance.

Sales Managemen t

Sales price is applied on each of the products that were shipped out to calculate sales and adjust sales before connecting to ERP accounting. Also, add and subtract the amount when sales is made or purchased made on account are paid when registering and managing the payments made by the client company.

3. Definition of Process Unit

G-Marketing

Sales & Production Plan

Material Shipping Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/L ogistics

Sales Mgt.

Register Demand Forecast

Register demand forecast by team - Register forecasted amount by Planning Item/Team/Month/Region (Export, Domestic Consumption) Analysis demand forecast - Comparative analysis of management plans, previous term, and demand forecast compared to last months plan Determine production volume - Use the factorys inventory data such as demand forecast and T/Hr, and error rate to determine production volume by cold rolling process and /P.I. Detailed measures - Establish standard detailed measures by A.I. for each term Determine shipment volume/sales amount - Determine shipment volume and establish a sales plan by team/region Establish a Daily Material Supply Plan: Determine processing volume by process and date, and establish a material supply plan between processes. Determine Production Capacity: Calculate production capacity based on the material supply plan for upper process, and determine order capacity in terms of order processing. Establish a Sales Plan by Term: Establish a sales plan by team and term in terms of contract month Establish an Order Plan: Determine the order capacity by team and week in consideration of the sales plan

Establish a Sales and Production Plan

Calculate Production Capacity

Establish an Order Plan

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/L ogistics

Sales Mgt.

Detailed Material Purchase Plan

Determine the amount of materials to be ordered according to the sales and production plan, consumption by the client company, and appropriate inventory volume, and confirm material orders for this month/week after reaching an agreement with the mill purchasing the materials on the volume of orders. Determine the volume of orders to be allocated to each of the sales teams in consideration of the mills volume of orders. (Person in charge of ordering materials) Registering a predicted order form according to the determined volume of material orders (Sales representative)

Material Order

Development of quality design of the predicted order and conversion to material order form. (Person in charge of
ordering materials) Receive feedback on order form and results from each of the mills ordering materials. Periodically update data on production management of materials ordered. (Person in charge of ordering materials) Cancelling material orders. (Person in charge of ordering materials)

Material Warehousing Mgt.

Create PO data and registered it in ERP upon receiving data on material orders, create an AP to pay for the materials, and notify the financial staff of the payment (Person in charge of ordering materials) Receive material order number while receiving data on material warehousing, and match the data with the plan & forecast order (Person in charge of ordering materials) Receive material processing data while processing orders and manage the modification of material status. Give sales rights to other sales representatives to sell the materials that the person who placed orders cannot sell. (Sales representative)

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/L ogistics

Sales Mgt.

Register Predicted Order: Predict the volume of sales to a client and use the information in ordering materials
and placing actual orders. Order Registration: Enter the client code, order type and other common ordering data as well as the thickness and width of product. Material Supply: Choose the material that meets the specifications requested by the client and produce the products. Product Inventory Supply: Choose the products that meets the customer demand among the products stored in the warehouse. Set Deadline: Set the deadline after checking if the factory can produce the materials that meet the order specifications within the deadline. Set Price: Set base, DC, and extra prices when pricing products. -. Add the price preservation item when entering orders to decide re-assigning the order price upon releasing.

Input Order

Confirm Order

Search all the details of the confirmed orders and see if the demands of customers are accurately reflected before confirming the order. Send order data to Process Management to create O/S data. Request a quality design for the entered order data. (Location of Quality Design System: Main Office, Korea). Send the results of quality design and register the results in Quality Design Results DB. Send quality design data and order data to MES production control center.

Quality Specifications

Start Production

Calculate the decisions of factory and error rate on the orders with completed order specifications and quality specifications, and then order the MES Production Control Center to start production.

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/Lo gistics

Sales Mgt.

ITEM Supply

Receive quality design data from Material Order Management (Predicted Order) and Order Processing (Product Order) to supply sales products/half finished products/planning items, and send the results of item supply. - Create and resend a new item number by connecting to standardization (ITEM Master). Process for creating a quality design for order (predicted orders) for materials. - Manage the conversion standards and create a design for material changes for materials (Stainless Hot coil, cold coil) in predicted orders. - Process of creating a quality design for ordering products. - Process quality design for quality warranty/production order and error check for quality design results.
Supply data on products/half finished products that can replace remaining materials and extra materials for quality and non-quality factors of products and half finished products currently being manufactured. - Product : Item codes for replacement product series/standard code/corporate warranty number/purpose of order/plating amount/sales product - Half Finished Products : Item code for alternative production standard number/half finished products

Quality Design

Replacement Item Supply for defect materials

Give a Number for Replacement Material Characteristics

Analyze the reasons for defects when long-term inventory materials or stored materials do not meet the required quality standards (quality testing on stored materials or defects in products), and number the replacement material when the person in charge of quality management decides that its necessary to change the number for materials in the lot.

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/Lo gistics

Sales Mgt.

Order/Materia l Processing

Manage and provide the process status from receiving orders to shipping. The status of processing orders is managed in the same manner as the material processing code. Manage the processing volume with the product conversion volume.

Order/Materia l Treatment

Systematic management of defect materials and data on defect materials - Categorize the types of defects, input data on incorrect orders and materials into a system, and the person in charge takes measures after reviewing the registered orders/products.

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/Lo gistics

Sales Mgt.

Transportation Contract Mgt.

Provide management functions for managing payments for transportation costs. - Register the prices by transportation conditions, destination, transportation cost, country/port, warehouse, port, and loading/unloading. - Register ships by shipping companies according to transportation contracts and use the data in allocation of ships (coast). Provide transportation cost management function. - Manually process the payment adjustment and transportation cost (plan). - Register the transportation rate by transportation conditions.

Shipping Order

Provide functions for domestic shipping. - Product shipping order for delivering the products on standby to the client company - Connect to search/modify payments by client AR and register security item (after converting to amount) by type. - Postpone/cancel shipping order in Order Process Data Provide function for ship allocation. - Choose materials by export and offshore products and give orders for allocation of ships for export and overseas shipping - Register an L/C for overseas shipping and clearance report number Provide shipping performance process function. - Approve shipping orders by client - Connect the shipping order data to MES for products on standby. - Finish shipping by order

G-Marketing

Sales and Production Plan

Material Order Mgt.

Order Processing

Quality Design

Process Mgt.

Shipping/Lo gistics

Sales Mgt.

Sales Accounting

Apply the sales price for each of the products that are shipped to calculate/adjust sales amount, and connect to ERP accounting. Register and manage the payments made by the client company. - Add and subtract amount after sales and unpaid bills are paid.

4. Process Flowchart

Mega Process Name Marketing

Process Chain Name

Sales and Production Plan

Demand forecast ERP Standard cost ERP Operation record Facility department Repair plan Registering demand forecast

Sales and Production Plan Gathering basic data Adjusting specifications Adjusting operation plan Production planning Sale planning

Calculating production capacity Material processing planning Calculating production capacity for orders

Order receiving plan Order receiving planning Sale planning Marketing department Expected sales price Order management Lead time satisfying

Demand forecast information Forecasted In-house demand demand volume

Coordinating meeting Sales-Mix Product-Mix

Mega Process Name

Marketing

Process Chain Name

Material Order Create Material Specs Send Material Order Cancel Material Order

Material Order Mgt.

Quality design for predicted order form and convert to material order form

Detailed Material Purchase Plan Sales & Confirm Order Plan Predicted Sales Production Plan and Confirm Material Production Volume Order Volume Allocate Order Volume by Team Register Predicted Order Form

Quality Design POSCO Order Processing

Material Processing Mgt.

POSCO Process Mgt.

Material Warehousing Mgt. POSCO Process Mgt. POSCO Shipping/Logistics POSCO Sales Accounting Create and register PO data Match Material Predicted Order Form Material Search Data Results Send Material Processing Data Purchase Amount Data Change Material Rights Confirm Actual Order Material Finish order confirmation, supply, and material management Order Processing Process Mgt. ERP Purchase (AP Module)

Process Chain Name Marketing

Process Name Order Processing

Input Order Quality Design

Material Spec Design

Confirm Order
Confirm Order Item Supply Send Order Data

Start Production
Order to Start Production

Input Predicted Order Create Order Details Material Supply Inventory Supply Check Order Capacity Set Deadline Set Price

Process Mgt. Shipping Control (MES) Quality Design

O/S DB

Quality Specs
Request to Add Quality Specs Register Quality Spec Results Place Order

Mega Process Name G-Marketing

Material Order

Process Chain Name Quality Design

ITEM Supply

Order Mgt.

Supply Ordered Items Supply New Items

Quality Design

Create Item

Set Quality Assurance Standards Set Manufacturing Directions Set Product-Material Conversion Check Quality Design Matching Supply Replacement Items for Defect Materials

Progress Mgt.

Cold Rolling Shipping Mgt.

Number Replacement Materials Supply Replacement Items for Defect Materials

Supply Replacement Items for Defect Materials

Process Chain Name Marketing

Process Name Progress Management

POSCO, Predicted Material Other Clients Data Ordered Material Material PO Number Process Management Order Cold Rolling Manage Purchased Materials Yard (MES) Order Material Processing Data STSC old Rolling (MES) Order Unit Data Mgt. STS Cold Rolling Control (MES) STS Cold Rolling Material Unit Material (MES) Process Mgt. Data STS Cold Rolled Product Shipping (MES) Production Performance (ERP WIP)

Order/Material Processing
Order Processing

Material Processing

Number Defect Items

Quality Design STS Cold Rolling (MES)

Process Chain Name

Marketing

Process Name Shipping/Logistics

Transportation Contract Mgt.

Accounting Data

Shipping Order
Domestic Shipping Order Overseas Shipping Order Shipping Performance Mgt.
Shipping Performance Shipping Order

Sales Mgt.

Manage Transportation Costs Manage Transportation Revenue

Process Mgt. Shipping Control (MES) Sales Mgt.

Process Chain Name

Marketing

Process Name Sales Management

Sales Accounting Shipping Product Price / Logistics Data

Transportation Performance Accounting Shipping Performance Accounting Sales Performance Accounting Request for Payment Process Claims

Shipping Order

ERP (AP)

Sales Performance

ERP (AR)

5. Main Screens Sales & Production Planning

 Material Purchase Management

 Order Acceptance

 Progress Management

 Shipping & Logistics

 Sales Management

 Related system : AR, MDM

Q&A
Thank you (Xin Cam On) (Xin

Appendix . Concepts of Item/BOM/Routing

1. What is an item?
Refers to raw materials, materials, or intermediate materials and final products required for production activities; defined and systematically classified for use to meet corporate management objectives For the application of ERP, all operating standards must be integrated and standardized on an item basis. Utilizing this can ensure the cross-functional processing of all operations including purchasing, production, selling, cost, etc. Supplier
Raw materials /Material item Semifinished item

Manufacturing

Distribution

Customer

Item for sale

Item for sale

Item for sale Semi-finished Item

Refers to products to be sold to customers

Stocks kept from warehousing to distribution base Intermediate materials in the production process for producing goods (work in process on the line) Raw material crushing ~ standby for warehousing

 Applicable POSCO items

Classify items for sale/semi-finished items into Item No., Material No./Production Standard, Thickness/Width Apply the raw material name code to raw materials, standardize the article code, and apply it to materials/furnishings/consumables. Main/Subsidiary raw material Semi-finished goods Goods for sale

Packaging /Warehousi /Warehousi ng ng

Correction Correction

FH Coil

Coil Waste Zn Dross

Coil Scrap

Product Rejects Sellable items

Plating Plating

Subsidiary raw material (Zn-General) Subsidiary raw material (Zn-Mix No. 5)

Materials, furnishings, consumables, etc. Semi-finished goods: Pertains to intermediate material in the production process. Item on standby from plating stage for warehousing/judgment

 Application examples of POSCO item type

Category
Products Goods for sale Others Semi-finished goods Planned goods for sale Planned semi-finished goods Gra de Gra de
Semi-finished material group Material code group

4
Gra de

9 10 11 12 13 14 15 16 17 18 19 20
Material code
Reserve
Thick- Thick- Width ness ness group code code

Material code group

Trait code

Res erve

Rolling Products Others

Semi-finished material code

Thick- Trait ness group code

Thick- Thick- Width ness ness group code code

Trait code

Res erve

Reserve Reserve

Item
Rolling

Purchase and goods for sale Planned purchase and goods for sale Materials Raw materials Service
Consumables, furnishings, medicine, etc.

Type

Pro Kind duct name

Gra de Gra de Gra de

Semi-finished material group Material code group Material code group

Thick- Trait ness group code

Reserve

Material code
Thick- Trait ness group code

Thick- Thick- Width ness ness group code code

Trait code

Res erve

Reserve Reserve Reserve Reserve Reserve

Serial classification no.

Large Medium L M Large Medium L M

Serial no. Serial classification no.

Serial classification no.

Manage reserve sector as space (null).

Order 1 2 3 4

Item Name Type Product type Product name Class Material number/semifinished product material number group Material number/ Semi-finished product material number Thickness group Thickness Width Post-process Other product features Other product features Preparatory

Mod e X X X 9

Digit 1 1 1 1

Contents Alphabetical management of item types, according to enterprise item system classification Alphabetical management of product types of product and semi-finished product Alphabetical management of form-specific ranking of product within the same product types Numeric management of the classes of product type- and its name-specific product and semi-finished product Alphabetical management with group items of actual material number : corresponding only to product Alphabetical management with group items of actual material number of semifinished product : from molten item Alphabetical management with items of actual material number : corresponding only to product Alphabetical management with items of actual material number of semi-finished product : from molten item Alphabetical management with grouping items of actual thickness group (concept of rough classification) Alphabetical management with items of thickness group (concept of middle category) Numeric management with items of width group (corresponding only to actual Item) Alphabetical management of post-process method of EG products (corresponding to both of planning and actual) Numeric management with each product-specific feature item (only for actual item) Alphabetical management with each product-specific feature item (only for actual item)

7 8 9 10 11 12 13

X X 9 X 9 X X

1 1 1 1 1 1 1

 Hierarchical structure of Planning Item and Actual Item

For the item system for goods for sale and semi-finished goods, operate 2 hierarchies of the Planning Item and Actual Item based on the characteristics of operation. - Planning Item: Utilize as a basic unit for demand forecasting and integrated sales/production. Grouping Item of Actual Item - Actual Item : Utilize as a basic unit for order processing, quality design, work order, stock management, cost calculation, etc. [Concept of Item Hierarchy ]

Planning Item PA
Demand forecasting Sales-based production plan

Order processing Work order Cost calculation MRP Standard

specifications

Actual Item A1

Actual Item A2

Actual Item A3

2. What is BOM (Bill of Material)?

It defines the basic unit, recovery, etc., of materials and raw materials required to produce an item. It refers to the relationship between items (production itemmaterial/raw material item), i.e., a concept of mixed ratio of raw material, component list. Utilize for calculating the required quantity of raw material and materials (MRP). Utilize as basic data for calculating the material cost when computing the production cost. Example of BOM (production of Ramyeon) Ramyeon 1 ea

Noodle

300g

Soup

Wrapping paper

Flour 260g

Potato flour 30g

Palm oil 10g

Refined salt

Refined sugar

Soy sauce powder

...

3. What is routing?
This is the production process for producing items and types and usage of equipment, manpower, and electricity put in per process. Utilize for making plans for process capacity (equipment use time) for production. Utilize as basic data for calculating the processing cost during production cost computation .

Example of routing (noodle making)

Production process

Flour Potato powder Palm oil

Mixing and processing raw materials

Cutting noodle

Inspecting noodle

Noodle
Raw material mixer (3 min.) Processing machine (1 min.) Manpower (3 min.) Noodle cutter (1 min.) Manpower (1 min.) Manpower (1 min.)

1 ea (300g)

Usage of equipment, manpower, and power