Electronic Purchasing

Automation of purchasing processes with key vendors can help you improve inventory management. For example, a quick and accurate PO Acknowledgement means your vendor will ship as ordered and on-time or will telephone you for a variance. EDI and other electronic methods enables quick and reliable sending of forecasts and POs that faxes and spreadsheets cannot do. Later, at the time of shipment, your distribution center is prepared because they are informed the shipment is on the way.

Overview

Here's how it works:

• Send vendors your Forecasts from your existing purchasing system such as SAP. This benefits both parties - your company is able to plan better and vendors are alerted earlier.
• Send the vendor a PO. You can also change it immediately and automatically.
• Receive Shipment Notices. This speeds delivery to the warehouse shelf and reduces ship status calls.
• Receive Invoices from vendors. This eliminates data entry and helps cap staff levels.
• Pay by EFT to better manage cash flow.

There are few significant changes as the purchasing group works with their existing application, not the EDI system. After a few key vendors are successfully implemented, buyers can negotiate for greater discounts as EDI provides a direct benefit to vendors and a high ROI. Later, non-production and trucking vendors can be added.

Overview of EDI and Forecasting

We have worked with several companies to improve their businesses. Here's how it's done.

• Most start with a Forecast Team - the CFO, the IS manager, the sales manager, the production manager, and the customer service manager.
• The goal - work with the Top 10 vendors to send a clear, accurate and timely forecast.
• The challenge - each vendor is somewhat unique, so adaptations may be needed to speed implementation.

The technical challenge is twofold:
1. To provide an alert about quantity changes in distant weeks
2. To provide forecast histories to counter chargebacks.

All large companies receive forecasts, the challenge is to negotiate a discount for a sound forecast.

Conclusion

DCS knows your existing EDI and MRP system. Adding a few vendors can be done quickly and economically to prove the concept. Qualification is simple, ask the vendor if they support X12 EDI. A roll-out of only 24 months can then automate most vendors and truckers. Considerable savings and wider production windows can be achieved. Our Grow^TM development service can help you by setting the first vendor while showing you how. Then you can add others at your own leisure, with DCS available for help. The next step is easy, e-mail DCS for your free assessment.