Published on March 10, 2014
SPICE Group, Inc. 1-888-400-7950 www.spiceTG.com excited@spiceTG.com Head Office 2601 Matheson Boulevard E. , Unit 39 Mississauga, ON L4W 5A8 Cloud Solutions Centre 940 Sheldon Court, Suite 200 Burlington, ON, L7L 5K6 India DevelopmentCentre S-23, Krishna Marg, Jaipur, INDIA Practical Innovation for Retailers, Manufacturers and Distributors Building a 21st Century Retail Supply Chain The “Case” for EDI in Retail
EDI – A Connected Supply Chain SPICE Technology Group, Inc. 2 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? SPICE Technology Group, Inc. 3 While ERP Streamlines (Internal) Workflow … • Retailers benefit immediately by streamlining internal 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 and alternate 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? SPICE Technology Group, Inc. 4 What Best in Class Retailers Have in Place What Best in Class Retailers Plan to Do Next
What is EDI/e-Business SPICE Technology Group, Inc. 5 An automated exchange of business data • Electronic Data Interchange (EDI) is a program whereby Trading Partners (such as suppliers, transporters and others) send and receive data in different formats, directly to and from Retailer’s ERP systems and in accordance with Retailer’s business rules. • This results in improved data exchange between by retailer and all Trading Partners. Benefit: a significant reduction in errors, exceptions, manual work and lead times/safety stock throughout the supply chain. • EDI is interchangeably described as e-Business and B2B (business-to-business ecommerce, utilizing modern internet-based technology). They all mean the same thing.
Wins for the CFO SPICE Technology Group, Inc. 6 Accounts Payable • Significant headcount reduction in labour • Faster and more accurate 3-way match-and- attach process • Savings from automatic checking of negotiated costs. • Capture of early payment discounts • Reduction in vendor inquiries Evaluated Receipts Settlement (ERS) • An advanced retailer-supplier workflow where merchandise is paid for based on issued PO & DC/Store Receipt (and not on invoice). • AP headcount reduction and early payment discount capture Trade Allowances & Discounts • Fast capture and reconciliation of special allowances , discounts and promotions • Streamlined management and settlement of chargebacks 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 SPICE Technology Group, Inc. 7 New Product Listing • Automated and timely exchange of retailer-supplier data to reduce timelines associated with new product listings, get new product to market faster, improve online accuracy ….and receive/process vendor merchandise quickly at the DC or store Replenishment & Inventory Management • Automated PO distribution to suppliers with PO receipt acknowledgements and delivery date confirmations significantly improves inbound visibility, reduces ordering lead time and improves in-stock positions. Collaborative Forecasting & Sales Data • Collaborative Forecasting and sharing of POS data with suppliers significantly improves in-stock positions and the customer experience. Scan-based Trading (pay-per-scan) • An advanced system of trading that allows suppliers to manage replenishment of certain categories/SKUs. Significant cost reductions throughout system. “Endless Aisle” & Drop-Ship Execution • Tight EDI/B2B integration with vendors allows for smoother consumer drop-ship program.
Wins for VP Supply Chain & Distribution SPICE Technology Group, Inc. 8 Smooth Inbound Logistics & DC/Store Receiving • Automated inbound receiving using Advance Ship Notice (ASN); Significantly improves inbound visibility and associated operating costs for internal DC or 3PL X-Dock and Flow-through Logistics • Significant reduction in system-wide inventory and DC Labour costs. EDI enables smooth X-dock program and enables functioning of a mechanized DC. Inbound/Outbound Freight • Automated management of transportation contracts and simplified freight invoice management. Promotions Execution • Ensure promotional items are in-store by promotional date; reduce expediting costs, and improve the customer experience. Reverse Logistics (returns, recalls, repairs) • Automated execution of return to vendor (RTV) process; fast execution of product recalls and streamlined repairs and services. Source-to-Shelf Visibility for Exceptions • Exceptions-based visibility of product flow from overseas to shelf or consumer channel and all points in between.
Wins for VP Information Technology SPICE Technology Group, Inc. 9 Improved ERP Utilization • Utilize several unused features of the ERP with supplier data integration for improved overall systems capability in inventory management, finance and warehouse management Improved Master Data Quality & Business Reporting • Suppliers and other external partners generate over 40% -60% of the data that affects ERP. Data quality and reporting is a time-honored “IT headache!” • Automated rules based exchange of data with trading partners vastly improves data quality and reporting accuracy. Modern EDI/e-Business is hassle-free … • Cloud EDI/e-Business solutions from SPICE allows you to fully leverage your ERP investments, minimize IT disruptions and rollout EDI/e-Business to your trading partners quickly and cost affectively. …and now inexpensive and fast • Innovative business models from SPICE allow you to have your trading partners participate in the costs of EDI (since they benefit as well – and often require EDI). • SPICE provides all the technology and services needed to deliver a turnkey solution • No hardware • No software • No new IT resources
Common Retail EDI Processes SPICE Technology Group, Inc. 10 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 SPICE Technology Group, Inc. 11 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 SPICE Technology Group, Inc. 12 An Example of an EDI/B2B Implementation Roadmap Merch. Procure-to-Pay PO, PO-Ack, ASN, MH-10 label, Invoice, Vendor Catalogue Benefits: FTE, DC Labour, Inventory CPFR & ERS POS Data, PO Change, Supplier PO Change, Change Acceptance, Remittance Advise [eliminate Invoice] Benefits: FTE, DC Labour, Inventory Scan-based Trading Implement 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” SPICE Technology Group, Inc. 13 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 with complexities of “translating and transforming data” to and from the many supplier systems to Retailer’s ERP. • Minimal IT impact to retailer - no hardware, software or additional IT resources needed. Just need to integrate once with SPICE Connect Cloud, we will manage everything 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 complexitiesof supply chain integration SPICE Technology Group, Inc. 14
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