Return to Business Growth Brings Challenges
A Midwest manufacturer of vehicle components faced narrowing shipment windows. In some cases product had to be shipped within three days. Additionally, use of an EDI network increased cost, but did not provide value. Process automation was needed so customer orders could be filled immediately. Fortunately, Infor ERP VISUAL has a sound module (VDI) upon which automated EDI can be set. These business documents were automated:
- Inbound Customer Purchase Order (EDI X12 Transaction Set 850)
- Outbound C.P.O. Acknowledgement (Confirmation, 855)
- Inbound Releases (Forecast, 830)
- Inbound Shipment Schedule (DELJIT, 862)
- Outbound Shipment Notice (ASN, 856)
- Outbound Invoice (810)
Automation eliminates data entry using paper forms or web pages. Documents are received or sent without data entry time or errors. For example, the Inbound Customer Purchase Orders immediately appear as Sales Orders awaiting customer service approval or correction. Additionally, the Inbound Releases and Shipment Notices near weeks are converted to C.P.O.’s. The key time savers are the Inbound Customer P.O., Release, and Shipment Schedule. The other three documents were automated to eliminate data entry staff cost.
The biggest hurdle was that customer EDI guidelines were out of date. This was met by use of an EDI data analysis tool. Second, the business rules (such as packing and shipping requirements that are different for part numbers) needed to be properly set in VISUAL (Ship Cards).
The project tasks were as follows:
- Project Planning (2 days)
- VDI, EDI, and AS2 system selection, installation, and testing (2days)
- Configuration of the VISUAL Data Interchange Module (11 days)
- Configuration of the EDI system (12 days)
- Configuration of the AS2 system (1 day)
- Customization for each customer (1.5 day)
- Training of Users (3 days)
Total Time: 32.5 days for the first customer
Approximate Development Cost (32.5): $39,000
EDI System Cost: $2,500
AS2 System Cost: $2,500
Estimated Investment: $44,000
As with all automation, the cost of the second and subsequent customers was minimal to the customer. To automate the 2nd through 10th customers at 1.5 days each was 13.5 days (about $16,200). Totaling $60,200 for 10 customers
Automated processing provided three main savings:
- Much more time is available for scrutinizing orders. Price and revised quantities are spotted.
- A customer service person was re-assigned to material management duties.
- The old EDI network per document, per customer, and per month fees were eliminated.
The yield – savings greater than the investment (100% ROI).
Their key customers (Paccar, Cat, Deere, and Freightliner) respect their higher level of commitment. Soon, customer inventory reports will arrive daily.