EDI Collaboration: Increase your Business Efficiency through Technology Benefits

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1 EDI Collaboration: Increase your Business Efficiency through Technology Benefits Сотрудничество в области EDI: повышение эффективности бизнеса через Технологии обмена данными Andrey Busygin Nestle Rossiya LLC 2-4 June th ECR Forum Moscow, Russia June 09, 10

2 Presentation prerequisite EDI concept has been widely used in Russia. However the electronic order doesn t mean the electronic data interchange. Learn how to save million dollars at the touch of a button? Using EDI messages DESADV and RECADV to improve logistic operations. Using EDI with Distributors. 2

3 What is EDI? 3

4 What is EDI? 4

5 EDI Theory EDI responsible to : - Decrease routine or manual work - Speed up information exchange - Improve quality of the data (no double entry) - Set common business process with your partners and contractors 5

6 EDI participants GDSN data pools Suppliers Retails / Chains Distribution Centers Distributors / Partners Carriers VAN providers

7 Areas of business where EDI brings benefits Integration with Warehouses & 3PL providers (Material Handling) Integration with Customers (Order to Cash) Integration with Carriers (Transportation) Integration with Suppliers of Raw & Pack Materials (Operational Purchasing) 7 */ size of cycles means interest to implement EDI

8 Integration with Customers (Order to Cash) RECADV Customer s or Distributor s Information System VAN / EDI -provider INVOIC ORDRSP ORDERS SAP POD Nestle Rossiya DESADV (Delivery note) ORDERS WMS Goods receipt Goods Return Issue Nestle DC (managed by 3PL)

9 Integration with Customers (Order to Cash) Nowadays Nestle Rossiya technically realized 5 main EDI messages Messages fully integrated with Nestle system All messages fully aligned with ECR-RUS standards We continue to do deployment with our distributors ORDERS- PURCHASE ORDER/ ЗАКАЗА НА ПОКУПКУ ORDRSP- PURCHASE ORDER RESPONSE / ОТВЕТ НА ЗАКАЗ DESADV - DESPATCH ADVICE / УВЕДОМЛЕНИЕ ОБ ОТГРУЗКЕ RECADV- RECEIVING ADVICE / ИНФОРМАЦИЯ О ПРИЕМКЕ INVOIC INVOICE / ЭЛЕКТРОННАЯ СЧЕТ-ФАКТУРА 9 June 09, 10

10 EDI with Retails Metro Tander Аtack Lenta Кораблик Real Selgros Based on deliveries of the first Quarter of 2010 : - 7 chains (228 ship-to) - Turnover of EDI orders consist 51% of NPS of Grocery and Confectionery business 10 June 09, 10

11 EDI with Partners (Distributors) Based on deliveries of the first Quarter 2010 : 23 partners (85 Ship-to) - EDI orders consist 68% of NPS of Grocery and Confectionery business 11 June 09, 10

12 Integration with warehouses & 3PL providers EANCOM based EDI plug-in Nestle Rossiya SAP R/3 ERP PRODAT (Material Master Data) DESADV (ASN) / Transport Order RECADV ORDERS DESADV w/ ref ORDERS INVRPT (Stock Adjustment) 3PL Provider Warehouse Management System INVRPT (Stock Status Change) INVRPT (Stock Status Change) ORDERS (Purchase Order) 12 June 09, 10

13 Examples of effective EDI ~ All our DCs in Russia integrated Nestle system via EDI ~ 4 millions - EDI EANCOM WMS messages per year 13

14 EDI Goods receipt simplification with DESADV and SSCC Each pallet has unique number SSCC (Serial Shipment Container Code ) Receipt process happened pallet by pallet : with RF terminals or with preliminary printed list. Standard steps during goods receipt on customers side with SSCC usage: 1. To take out first pallet from the truck and scan SSCC bar code. 2.RF terminal retrieve and display content of the pallet 3. Whs clerk to compare physical quantity of goods on pallet with RF figures 4. To enter difference or confirm quantity via RF terminal. 5. To move pallet to the main storage Then with rest pallets all steps repeat again.! If no RF terminals then quantity confirmation clerks do afterwards in the WMS based on captured results (from paper)

15 EDI Goods receipt simplification with DESADV and SSCC inside Obvious benefits : 1. Need only one pallet place to unload whole truck 2. Content of the pallet comes with DESADV message in advanceе with all attributes: shelf life, Batch code, Material codes, Quantity and many rest useful information. 3. Whs clerk responsible just to check quantity and confirm it via RF terminal. 3. Time saving. 4. No mistakes. 5. Possibility to send RECADV and provide Prove of Delivery (POD).! Requirements: For sender : ability to create new unique SSCC for mixed pallets during picking process. Receiver: Ability to work with DESADV and SSCC.

16 EDI Clear invoicing based on RECADV Existing process contradictions : 1. Based on Russian legislation seller obliged to provide customer paper based Invoice-facture during 5 working days. 2. Invoice-facture should reflect the same quantity as was confirmed by customer. 3. No way to issue clear Invoice facture in advance without customer s quantity confirmations. Obvious benefits become available with RECADV: Clear Invoice-facture creates based on RECADV message right after customer confirmation In case differences appropriate reason codes goes to supplier for analysis EDI INVOIC message could dispatch to customer in few minutes. Famous GAPs. No way to use e signed INVOIC as legal (due to this fact seller still responsible to provide customers with paper based Invoice-Facture) Extra cost to delivery printed documents to the customers.! We are waiting legally allowed e signed INVOIC usage. ECR working on it.

17 Other benefits : roaming 1. All ECR-RUS VAN providers provide free of charge roaming 2. It is enough to have one link with one VAN and it guaranty EDI with anyone from network 3. Number of EDI companies rapidly growing Customer 1 Nestle Rossiya Customer 2 Other companies used EDI via other VANs

18 Several key comments about EDI... EDI is mutually beneficial process EDI still your competitive advantage and very soon it become regular All investments to EDI returns back with direct and indirect benefits and savings. Effective business processes, less human resources involved, pepper savings, time savings, less number of mistakes, no double entry.. EDI require high discipline within Master data. EDI will be your horror in case chaos within the Master data and in information systems. Respect GS1 standards. Respect ECR-RUS EDI messages standards GDSN master data synchronization technology of the nearest future. EDI is like mobile communication ones you taste it then you can t live without it. EDI it is not nanotechnology EDI is not extremely expensive Then more transactions you do then higher EDI efficiency Attract your partners into EDI

19 EDI is similar to great human innovations

20 Questions

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