Building a 21st century retail supply chain - the case for edi in retail -- spice technology group
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Transcript of Building a 21st century retail supply chain - the case for edi in retail -- spice technology group
SPICE Group, Inc. [email protected]
Head Office2601 Matheson Boulevard E. , Unit 39Mississauga, ON L4W 5A8
Cloud Solutions Centre940 Sheldon Court, Suite 200Burlington, ON, L7L 5K6
India Development CentreS-23, Krishna Marg,Jaipur, INDIA
Practical Innovation for Retailers, Manufacturers and Distributors
Building a 21st Century Retail Supply ChainThe “Case” for EDI in Retail
EDI – A Connected Supply Chain
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Simple I Fast I Affordable
Table Of Contents
Why EDI?
What are Best in Class Retailers Doing
What is EDI?
Wins for Merchandising, Finance, Supply Chain & IT
Common Retail EDI Processes
Developing a Business Case for EDI
Sample Roadmap for Implementation
Implementing EDI – “The Plan” & What to expect
Why EDI?
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While ERP Streamlines (Internal) Workflow …
• Retailers benefit immediately by streamlininginternal workflow and communications
…Trading Partner (External) Data Not Addressed
• Reduces business case realization for ERP
• Paper, phone calls and faxes propagate
• Affects all departments dealing with Suppliers andalternate customer channels
Net Result –Still Paper, Spreadsheets, Faxes
• Merchandising affected
• Supply Chain and Logistics affected
• Finance affected
Most best-in-class retailers have automated supply chains with EDI/eBusiness
Disconnected Channels
What are “Best in Class” Retailers Doing?
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What Best in Class Retailers Have in Place What Best in Class Retailers Plan to Do Next
What is EDI/e-Business
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An automated exchange of business data
• Electronic Data Interchange (EDI) is a program wherebyTrading Partners (such as suppliers, transporters and others)send and receive data in different formats, directly to andfrom Retailer’s ERP systems and in accordance withRetailer’s business rules.
• This results in improved data exchange between by retailerand all Trading Partners. Benefit: a significant reduction inerrors, exceptions, manual work and lead times/safetystock throughout the supply chain.
• EDI is interchangeably described as e-Business and B2B(business-to-business ecommerce, utilizing moderninternet-based technology). They all mean the same thing.
Wins for the CFO
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Accounts Payable
• Significant headcount reduction in labour
• Faster and more accurate 3-way match-and-attach process
• Savings from automatic checking of negotiatedcosts.
• Capture of early payment discounts
• Reduction in vendor inquiries
Evaluated Receipts Settlement (ERS)
• An advanced retailer-supplier workflow wheremerchandise is paid for based on issued PO &DC/Store Receipt (and not on invoice).
• AP headcount reduction and early paymentdiscount capture
Trade Allowances & Discounts
• Fast capture and reconciliation of specialallowances , discounts and promotions
• Streamlined management and settlement ofchargebacks and vendor deductions
Finance & Reporting
• Accurate and timely accruals of purchases
• Improved inventory & shrink accuracy
• Faster month end closings
Working Capital
• Reduced inventory due to shorter lead times
Wins for VP Merchandising
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New Product Listing
• Automated and timely exchange of retailer-supplier datato reduce timelines associated with new product listings,get new product to market faster, improve online accuracy….and receive/process vendor merchandise quickly at theDC or store
Replenishment & Inventory Management
• Automated PO distribution to suppliers with POreceipt acknowledgements and delivery dateconfirmations significantly improves inboundvisibility, reduces ordering lead time and improvesin-stock positions.
Collaborative Forecasting & Sales Data
• Collaborative Forecasting and sharing of POS datawith suppliers significantly improves in-stockpositions and the customer experience.
Scan-based Trading (pay-per-scan)
• An advanced system of trading that allows suppliers tomanage replenishment of certain categories/SKUs.Significant cost reductions throughout system.
“Endless Aisle” & Drop-Ship Execution
• Tight EDI/B2B integration with vendors allows forsmoother consumer drop-ship program.
Wins for VP Supply Chain & Distribution
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Smooth Inbound Logistics & DC/Store Receiving
• Automated inbound receiving using Advance ShipNotice (ASN); Significantly improves inboundvisibility and associated operating costs for internalDC or 3PL
X-Dock and Flow-through Logistics
• Significant reduction in system-wide inventory andDC Labour costs. EDI enables smooth X-dockprogram and enables functioning of a mechanizedDC.
Inbound/Outbound Freight
• Automated management oftransportation contracts andsimplified freight invoicemanagement.
Promotions Execution
• Ensure promotional items are in-store bypromotional date; reduce expediting costs, andimprove the customer experience.
Reverse Logistics (returns, recalls, repairs)
• Automated execution of return to vendor (RTV)process; fast execution of product recalls andstreamlined repairs and services.
Source-to-Shelf Visibility forExceptions
• Exceptions-based visibility ofproduct flow from overseas toshelf or consumer channel andall points in between.
Wins for VP Information Technology
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Improved ERP Utilization
• Utilize several unused features of theERP with supplier data integration forimproved overall systems capability ininventory management, finance andwarehouse management
Improved Master Data Quality &Business Reporting
• Suppliers and other external partnersgenerate over 40% -60% of the data thataffects ERP. Data quality and reporting isa time-honored “IT headache!”
• Automated rules based exchange of datawith trading partners vastly improvesdata quality and reporting accuracy.
Modern EDI/e-Business is hassle-free …
• Cloud EDI/e-Business solutions from SPICE allows you tofully leverage your ERP investments, minimize ITdisruptions and rollout EDI/e-Business to your tradingpartners quickly and cost affectively.
…and now inexpensive and fast
• Innovative business models from SPICE allow youto have your trading partners participate in thecosts of EDI (since they benefit as well – and oftenrequire EDI).
• SPICE provides all the technology and servicesneeded to deliver a turnkey solution
• No hardware
• No software
• No new IT resources
Common Retail EDI Processes
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Catalogue Update
POS Data
Freight Invoice
Application Error Advise
PO Change Acceptance
Text Messages
New Store Openings
Motor Carrier Shipment Status
Purchase Order
Purchase Order Acknowledgement
Invoice
Remittance Advise
PO Change
Advanced Ship Notice
Request for Pick Up Appointment
Freight PO
Developing a Business Case
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1. Reduced Lead Times [Inventory/WOS]
2. Reduced FTE
3. Reduced Cost Per Case
4. Increased GMROI
5. Increased Turns
6. Increased Sales
7. Increased Margins
8. Increased Working Capital
9. Improved Franchisee Experience
Your Business Case
Building a Roadmap of Benefits
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An Example of an EDI/B2B Implementation
Roadmap
Merch. Procure-to-PayPO, PO-Ack, ASN, MH-10 label, Invoice, Vendor Catalogue
Benefits: FTE, DC Labour, Inventory
CPFR & ERSPOS Data, PO Change, Supplier PO Change, Change Acceptance, Remittance Advise [eliminate Invoice]
Benefits: FTE, DC Labour, Inventory
Scan-based TradingImplement for certain categories
Supplier Score-carding
Benefits: FTE, DC Labour, Inventory
6-12 months
6-12 months
6-12 months
Capture low hanging fruit
Implementing EDI: “The Plan”
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BUSINESS IMPACT
SET• Business Case• Usually a Pilot with a few large vendors• Either CFO or Chief Merchant (or both) provide an EDI
mandate to suppliers with timelines.
READY• A (business) Project Coordinator is assigned to manage
internal task coordination (Merchant or Finance Team)• SPICE Technical development and rollout tools
configuration• Inform suppliers of initiative.
GO• Go for low hanging fruit first• Test & enable suppliers• SPICE manages the heavy lifting - rollout to suppliers.
Technology Infrastructure Impact
• Outsourcing EDI to SPICE means SPICE will deal withcomplexities of “translating and transforming data” toand from the many supplier systems to Retailer’s ERP.
• Minimal IT impact to retailer - no hardware, software oradditional IT resources needed. Just need to integrateonce with SPICE Connect Cloud, we will manageeverything else from there on.
SPICE’s Set – Ready – Go EDI Implementation Framework & Vendor Enablement Tools reduce your effort and speed up timelines
Mirrored Case Studies
SPICE understands the complexities of supply chain integration
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