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Towards Electronic Data Interchange

Towards Electronic Data Interchange. Improving the Supply Chain Reducing Costs, Reducing Errors Improved Reporting 3 projects to consider (getting started) Getting our Ducks in a Row ? Presented in Taiwan – July 2013 by GRK Fasteners – An ITW Company . Topics.

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Towards Electronic Data Interchange

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  1. Towards Electronic Data Interchange Improving the Supply Chain Reducing Costs, Reducing Errors Improved Reporting 3 projects to consider (getting started) Getting our Ducks in a Row ? Presented in Taiwan – July 2013 by GRK Fasteners – An ITW Company

  2. Topics • Introduction to Electronic Data Interchange - EDI • EDI Project #1 – Managing Orders • EDI Project #2 – Ship Notices / Manifests • Related – Current web-based supplier tracking software • EDI Project #3 – Manufacturing Info • Overall Discussion… • Next Steps…

  3. 1. Introduction to EDI EDI is cool 1.1 What is EDI ? 1.2 Which EDI documents exist ? are used ? 1.3 Purchase Orders – with / without EDI 1.4 EDI Formats (X12, XML, flat ascii, others ?) 1.5 Partners and what they do: VAN’s and service providers (SPS Commerce) 1.6 Which EDI documents would help GRK and its suppliers ?

  4. 1.1.1 What is EDI ? • Electronic Data Interchange (EDI) is a method for transferring data between different computer systems. http://en.wikipedia.org/wiki/Electronic_Data_Interchange

  5. 1.1.2 Why EDI ? • Saves time and therefore $ • Reduces errors associated with rekeying information • Provides more interesting work for staff (analyzing / checking – not keying) • Ensures ERP systems have better and more timely data • Expands business window (computers can work around the clock) • Improves communications between trading partners • Can lead to more efficient business processes • Prepares an organization to grow and to work with large customers / large suppliers (i.e., Home Depot, Lowes, Walmart, etc. all rely heavily on EDI) • http://www.edibasics.co.uk

  6. 1.2 WhatEDI documents might be of interest to all of us here ?

  7. 1.3.1 Purchase Orders: without / with EDI • BUT GRK’s customers do not want to enter their order TWICE ! So, many use EDI !

  8. 1.3.2 Manufacturing EDI Suite GRK(putting it all together…) EMR / SCF

  9. 1.4.1 Different EDI Formats • X12 (main standard) • XML (gaining popularity) • Ascii (popular for import / export) for some ERP’s • Excel ? • Others • Sometimes communicating with trading partners involves translating from one format to another…

  10. 1.4.2 X12 example(what does this do ?) ISA*00*          *00*          *12*6058863495     *12*8074744300     *130619*0735*U*00401*000045451*0*P*^∑GS*PO*6058863495*8074744300*20130619*0735*45451*X*004010∑ST*850*0001∑BEG*00*DS*WL00109846**20130618∑PER*BD**TE*(717)-866-7565∑DTM*002*20130705∑DTM*010*20130701∑TD5*****DIRECT∑N9*ZZ*NOTES∑MSG*TAG PO 208326.  DROP SHIP TO STAN MUELLER, 590A EAST ROAD 1400 NORTH, SIBLEY,∑MSG*IL 61773.  PLUS UPS CHARGES.∑N1*SU**92*030034∑N1*ST*STAN MUELLER*92*WL∑N3*590A EAST ROAD 1400 NORTH∑N4*SIBLEY*IL*61773∑PO1*1*3*EA*180.52****CB*NSWL0000133870∑CTP**ALT*180.52*3*EA∑CTP**ALT*180.52*3*EA∑PID*F****77269103022102 5/16 X 3-1/8 PHEINOX SS BULK STRUCTURAL∑CTT*1∑SE*19*0001∑GE*1*45451∑IEA*1*000045451∑

  11. 1.4.3 XML example (shortened!) • <?xml version="1.0"?> • <?xml-stylesheet type="text/xsl" href="x12_850.xsl"?> • <inter_header> • <segment_id>ISA</segment_id> • <authorization authorization_qualifier="00" authorization_info="          "/> • <security security_qualifier="00"  security_info="          " /> • <sender inter_id_qualifier="12"  sender_id="6058863495     " /> • <receiver inter_id_qualifier="12"  receiver_id="8074744300     " /> • <inter_date_time date="130619"  time="0735" /> • <standards_identifier>U</standards_identifier> • <version_id>00401</version_id> • <inter_control>000045451</inter_control> • <ack_requested>0</ack_requested> • <test_indicator>P</test_indicator> • <subelement_separator>^ï¿∏GS</subelement_separator> • </inter_header> • <functional_group_header> • <segment_id>GS</segment_id> • <functional_id_code>PO</functional_id_code> • <application_senders_code>6058863495</application_senders_code> • <application_receivers_code>8074744300</application_receivers_code> • <date>20130619</date> • <time>0735</time> • <group_control_no>45451</group_control_no> • <responsible_agency>X</responsible_agency> • <id_code>004010</id_code> • </functional_group_header> • <transaction_set_header> • <segment_id>ST</segment_id> • <set_id>850</set_id> • <set_control_no>0001</set_control_no> • </transaction_set_header>

  12. 1.5.1 Partners and what do they do ? (VAN’s, service providers, etc.)http://en.wikipedia.org/wiki/Value-added_network

  13. 1.5.2 V.A.N.’s – what do they do ?SPS Commerce is a V.A.N. (Value Added Network partner) • Provide a highly reliable network of trading partners for their customers (often using the Internet as transport). V.A.N.’s connect to other V.A.N.’s… • Parse / Check all EDI sent for correct format and syntax rules • Translate documents to / from X12 format • Perform mapping of EDI fields to ERP specific tables and fields • Provide web-based services so low volume customers can type data, and have it sent in X12 format using only the services of the provider

  14. 1.6 Which EDI documents would help GRK and its partners ? • Project #1: Managing orders – GRK sends purchase order, GRK sends changes to date expected and / or quantity expected as changes become necessary • Project #2: Advance Ship Notices / Manifests and SSCC-18 labels [license plates] – Suppliers label all goods with unique numbers (provided by GRK) and record how the items appear on pallets, and send EDI to describe “what is coming” • Project #3: Manufacturing Information – Suppliers respond to electronic requests for quantities of finished goods available, information from weekly tracking report (how much Climatek? For each order, how many of each item are in each stage of manufacturing) The questions / answers go computer to computer. Can we eliminate having suppliers type supplier tracking information into the web-based GRK system ?

  15. 2. EDI Project #1 – Managing Orders 2.1 GRK sends 850’s to each supplier 2.2 GRK sends “purchase order changes” [850 or 860] to each supplier (new date, new quantity, cancellation) 2.3 modified 850 versus 860 ? email too ? 2.4 discussion ? timelines ?

  16. 2.1.1 GRK requirements: sending 850’s to each supplier • GRK sends out about 300 purchase orders per year • Each purchase order contains an average of 12 lines • BUT, trend is for a larger number of purchase orders – sent on a regular basis, each with a smaller number of lines (MRD – requirement of ITW – GRK’s parent) • Each line has: StockCode, Quantity, DueDate based on best guesses • Periodically (weekly?), GRK needs to change the DueDate and / or the Quantity for orders being produced. • GRK also needs the factories to warehouse finished items when GRK is not selling enough, or to handle expected orders at peak sales times

  17. 2.1.2 Mechanics / Roles: GRK sending 850’s to each supplier • Best ERP based, EDI implementations run on timers. • At 1pm 3pm 5pm weekdays, the GRK computer will wake up and find new purchase orders to translate to X12 (850) and sendto the suppliers possibly via the V.A.N. • Role of people is to check that the computer is doing the assigned job correctly at the correct times • At 7pm daily, the GRK computer will wake up and look for purchase order line items that have changed (either Due Date or Quantity) and will generate X12 (either 850 or 860), and sendto the suppliers

  18. 2.1.3 850 (or any other document) sent and receivedV.A.N.’s could be drawn into picture in a few places PO out 850 850 PO in Internet X12 X12 ERP ERP Accept? 997 997 Accept? GRK SCF / EMR

  19. 2.2 Purchase Order Changes 850 or 860 850 or 860 997 997 SUPPLIER COMPUTER: OK, I changed Line 3 as you requested, and sent email to the scheduler, and updated related information GRK COMPUTER: (after person typed change) For PO# 087654, Line 3 StockCode 000077269100101 Change due date to Oct 9, 2013 and changed Quantity to 9,000 “C”

  20. 2.3 Importance of Email… • Regardless of which EDI documents are chosen to implement this, it is also good practice to have the computer systems at each end send an email message to the correct person(s) to notify them of an incoming EDI transmission and / or something about the contents of the document (i.e., can be used to tell the person exactly what happened)

  21. 2.4 Discussion ? Timelines ? • Smallest project with quickest payback • GRK could be ready within a couple of weeks • Do the factories “do any EDI” ? Do the ERP systems in the factories have EDI capability ? • Could SPS Commerce (http://www.spscommerce.com) help ? • What other information / help is needed ? • When could the suppliers be ready ?

  22. 3. EDI Project #2 – Ship Notices / Manifests (856) 3.1 What is included in the 856 EDI document ? 3.2 SSCC-18 (license plate) labels and their usage 3.3 Benefits of tracking (for factories, for GRK [receiving, re-packing], for customers of GRK) 3.4 discussion ? timelines ?

  23. 3.1 – License Plates (pictorial)LP (license plate #) Pallet 1 of 3, Box 2 of 40, mixed boxes, etc.

  24. 3.2.1 SSCC-18 labels (license plates) and their usage • Full label (shipments and pallets) => • Smaller labels for boxes • Full label has zones • Smaller label has SSCC18 label, UPC and text

  25. 3.2.2 – Pulling apart the SSCC-18 labelhttp://www.gs1-128.info/sscc-18 • SSCC – Serial Shipping Container Codes (GS1-128 symbology) • Sample: 00 007726911234567890 • 00 is the application identifier (always 00) – sometimes omitted (i.e., last 18 digits are significant in SSCC-18) • 0 is the type: 0 => box, 1 => pallet, 2 => shipment • 0772691 – is GRK’s Universal Product Code (UPC) prefix with a zero pre-pended • 123456789 – is a UNIQUE, SERIAL number (NOT A STOCKCODE). GRK will provide a range or pool of these numbers to each supplier • 0 - is the calculated (mod 10) check digit (so that equipment scanning the label know whether or not this is a valid number)

  26. 3.3 Benefits of Tracking (using the license plates) • Supplier has way to check what is being shipped by scanning license plates as the shipment is being built. Supplier invoices could also benefit from this checking • GRK might be able to check (instead of key) supplier invoices using some combination of the incoming 856 information and / or one-or-more 810’s [Invoices] sent by the supplier… • GRK has a more accurate receiving process – by scanning license plates instead of scanning the product labels on each box. • GRK could slowly begin to implement an automated warehouse based on scanning license plates that enter the warehouse (automatic put-away and picking) • GRK has better “lot traceability” by incorporating license plates in the repack process (i.e., using screws from one box with license plate “x”, we created these other license plates (pro- handy- paks)) • GRK customers have better lot traceability – even with repack items

  27. 3.4 Discussion ? Timelines ? • We all need to get to the stage where we can produce 856’s and the SSCC-18 labels – as this will be the price of doing business with larger customers • Perhaps we need a small group of people to collaborate across the time zones and language barriers to make this happen? • Perhaps a company that specializes in EDI – with a presence in both North America and Asia (e.g., SPS Commerce) could assist (if the cost is reasonable, etc.) ? • What should we do ??

  28. 4. Related – Current web-based supplier tracking software 4.1 Why supplier tracking software ? 4.2 Weekly cycle… 4.3 Manufacturing steps… 4.4 Problems with current system… 4.5 Irene (SCF) and Teresa (EMR) will take this on 4.6 “Late Orders” weekly email 4.7 There must be a better way…

  29. 4.1 Why Supplier Tracking Software ? • Lead times of 120 days (time between ordering the goods and receiving them in Canada) are long, and must be understood / managed by both the suppliers and buyer. • With some accuracy, GRK needs to know which items will be received in Canada: early, on-time, late – in order to best serve GRK customers • GRK needs a way to see / check that changes made to due dates and quantities are being observed by the suppliers • GRK wishes to continue to assist the suppliers in determining which items are already late (not far enough along in the manufacturing process) • 2 GRK technical documents exist: supplier_tracking_v2.doc and Supplier_Tracking_Report_Changes_Documentation.pdf are available on request

  30. 4.1.1 Login to www.grkfasteners.com

  31. 4.2 Weekly Cycle (pictorial) EMR and SCF staff type data into GRK COMPUTER via the web each Monday Each Tuesday, the GRK COMPUTER generates the “Late Orders” report and sends it via email to EMR and SCF staff Each Tuesday, GRK STAFF use sales data and data typed in by EMR and SCF staff to adjust the due date and / or the quantity of each outstanding PO Line (see earlier slide…)

  32. 4.3 Manufacturing Steps

  33. 4.4 Problems with Current System • Computer can beslow, takes a long time to update • Data entry errors slow things down more • Probably: Too much information is requested • Brokers (Eternity Hope, CMC) being phased out • Training Irene and Teresa might be time consuming (gathering the information, not just the data entry) • We must do this keying now, but looking ahead: There must be a better way…

  34. 4.5 Irene (SCF) and Teresa (EMR) will take this on Resources: • Computer reports at each factory ? (especially scheduling information!) • Help from brokers ? (up until Q4 2013?) • Documentation from GRK • Trying it during this visit – preferably with real data…

  35. 4.6 “Late Orders” – weekly email • Important Note to Suppliers…

  36. 4.7.1 There must be a better way… • Is there a report from each supplier’s ERP that has the information GRK needs ? • If so, can this report be changed into a format that GRK can work with (e.g., Excel [English], ascii, xml, x12) • If not, could such a report be built ? • Do the ERP’s used by suppliers have EDI capabilities ? If so… • Could we accomplish the same thing by having supplier computers able to receive 869’s (order status inquiry) and reply with 870’s (order status report) ? • Could we also have supplier computers respond to 846’s (Inventory Inquiry) – especially for quantities of finished goods held in supplier warehouses ? • Let’s explore this further…

  37. 5. EDI Project #3 – Manufacturing Information 5.1 What information is required ? 5.2 Which EDI documents might be of interest ? 5.3 If not EDI documents, what information could be exchanged “computer to computer” to avoid typing ? 5.4 discussion ? timelines ?

  38. 5.1 What information is required ? • GRK needs to know when it will receive each item relative to the latest due date, and latest quantity ordered (order inquiry) • GRK needs to know how much of each finished good is being stored in each supplier’s warehouse (inventory inquiry ?)

  39. 5.2.1 Which EDI documents might be useful?

  40. 5.2.2 – Closer Look at 869 and 870 869 869 For each outstanding PO Line do… 870 870 GRK COMPUTER: For PO# 087654, Line 3, Due Oct 9, 2013, please provide a status update…GRK COMPUTER: Thanks, I will update SUPPLIER COMPUTER: For PO# 087654, Line 3: StockCode is 000077269100101, Due Date is Oct 9, 2013, Of the 6,000 “C” ordered: 3,000 “C” were sent for packing, 2,000 “C” are in inspection, and 1,000 “C” are in coating

  41. 5.2.3 Closer look at 846 For each item where there is safety stock, do… 846 846 846 846 GRK COMPUTER: How many 000077269100101 do you have in your safety stock? GRK COMPUTER:Thank you. I will update my files SUPPLIER COMPUTER: We have 18,000 “C” of 000077269100101 in safety stock

  42. 5.3 If not EDI documents, what information could be pulled from the factory ERP systems ? • In order to answer this question, each supplier and GRK needs to understand what is / is not available from each supplier’s ERP. Or… • GRK needs to understand what computer data (Excel, Access, ??) is used by each supplier to manage the manufacturing process. Then, we would need a way to exchange this information (and get it into the GRK servers)

  43. 5.4 Discussion ? Timelines ? • This could have a quick payback if it is possible to implement this. • Eliminate weekly keying of information into the GRK web-based system • Inquiries possible “around the clock” ? • Computers can synchronize as frequently as required…

  44. 6. Overall Discussion 6.1 Training Teresa and Irene – a must 6.2 Current factory ERP systems – can they handle EDI ? If so, which formats work for each factory ? If not, what is the OVERALL business case for typing information into a web-based system – such as the one provided by SPS Commerce ? 6.3 What are the role(s) for EDI service providers (SPS Commerce) ? 6.4 How will we send documents ? Via “the V.A.N.” ? Secure ftp ? Email ? Other ? 6.5 How does all this fit with CWC and the preparation of goods for ITW Brands ? 6.6 S.W.O.T. (strengths, weaknesses, opportunities, threats) analysis ? 6.7 Broad timelines ? Do we know enough to set target dates for the 3 projects (or just the first one) ?

  45. 7. Next Steps 7.1 Should do Project #1 during 2013. 7.2 Must have Teresa and Irene entering data into GRK’s web based system as soon as possible 7.3 Should start on Project #2 and / or Project #3 during 2013, with expected completion sometime during 2014 7.4 There are no new $$ to do this work. We must prove there is a payback and “eat the costs” ***** Discussion please ! *******

  46. Contacts les.mayes@grkfasteners.com and swen.ruhmann@grkfasteners.com Teresa Baosca@acexma.com Irene Houscf-irene@hotmail.com EMR ERP person SCF ERP person ATS Celia Lee asiatec@ms13.hinet.net and ATS ERP person SPS Commerce (Anna Meyer) ameyer@spscommerce.com +86 10 5639 0860 CWC person ?? ITW Brands person ??

  47. Appendix A – EDI Specificationshttp://www.1edisource.com/learn-about-edi/transaction-sets/x12#axzz2WrWamJ2a • 850 Purchase Order http://www.1edisource.com/learn-about-edi/transaction-sets/tset/850#axzz2WrWamJ2a • 856 Ship Notice/Manifest www.1edisource.com/learn-about-edi/transaction-sets/tset/856#axzz2WrUXJjg8 • 997 Functional Acknowledgement http://www.1edisource.com/learn-about-edi/transaction-sets/tset/997#axzz2WrWamJ2a

  48. Appendix B #1 - Supplier Tracking Menu Items

  49. Appendix B #2 - Choose Stockcode to Report

  50. Appendix B #3 - Enter Values for this StockCode

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