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Figure
1. Microsoft Xbox supply-chain architecture
A sample data
flow through the solution is as follows:
1. When the
console manufacturer requires additional GPU chips, it initiates a
purchase order request, which is sent from its ERP system as a
RosettaNet PIP over the Internet to Microsoft.
2. The
request is received by the BizTalk RosettaNet Accelerator, the first
of two BizTalk Server–based computers in the solution, which serves
as the business-to-business (B2B) gateway.
3. The
first BizTalk Server–based computer forwards the purchase order to
the second BizTalk Server–based computer, which serves as the hub of
the solution, connecting to SharePoint Portal Server, the data
warehouse, and the SAP R/3 and Microsoft Business Solutions Dynamics
AX systems.
4. The
second BizTalk Server–based computer validates the purchase order
request according to its business rules, and then uses orchestration
to route the request to the Microsoft Business Solutions Dynamics AX
system, where it is used to generate manufacturing process
updates.
5. The
Microsoft Business Solutions Dynamics AX system sends its own
purchase order request information through the BizTalk Server hub to
the SAP system, which formulates a Microsoft purchase order for the
chips.
6. The
Microsoft purchase order is forwarded through the BizTalk Server hub
to the BizTalk Accelerator for RosettaNet, where it is converted to
the appropriate PIP.
7. The PIP
is sent over the Internet to the GPU manufacturer, which prepares to
fulfill the order, and which initiates a similar process loop
through the solution by acknowledging the purchase
order.
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Benefits
The BII Framework
is expected to speed the supply chain process while reducing its
cost, for a significant first-year ROI to Microsoft. In addition,
the solution was relatively fast and cost-effective to develop. Its
loosely coupled structure ensures that suppliers can be added later,
as needed, without extensive coding or regression
testing.
On-Time
Deliveries to Rise by 20 Percent
By providing
real-time visibility into the supply chain, the BII Framework will
reduce, by a day, the time that Microsoft manufacturing executives
took to identify problems through the EDI- and batch-based process.
“A one-day
increase in responsiveness is huge in outsourced manufacturing,”
says Meshew. “It means you have the time to respond to problems—for
example, by rerouting production or changing parameters to
potentially save thousands of dollars in unnecessary air freight and
expediting costs.”
As a result of
increasing agility throughout the manufacturing process, the BII
Framework is expected to increase on-time deliveries by about 20
percent for the next-generation Xbox 360 production, according to
Meshew. The real-time visibility into the supply chain, combined
with tighter integration with supplier work-in-progress processes
and Microsoft planning systems, should contribute to a 10 percent
reduction in inventory costs.
Return on
Investment of 126 Percent Anticipated in First Year
Microsoft expects
to see a 126 percent ROI on the BII Framework in its first year. The
majority of that return comes from an anticipated $500,000 reduction
in inventory carrying costs. Microsoft also anticipates a 20 percent
increase in productivity among Microsoft manufacturing staff for GPU
production and distribution, saving $165,000. In addition, because
the solution will alert IT staff to technical issues that now can be
addressed more quickly and cost-effectively, Microsoft expects to
save another $82,500 in increased IT
productivity.
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