Leading consumer brands constantly seek to streamline supply chains for greater efficiency, profitability and customer service. Electronic data interchange (EDI) is one common tool for doing so, but not all implementations are equal.
ARI Packaging, an Alsip, Ill.-based provider of contract manufacturing, packaging and fulfillment services, works to establish long-term, strategic relationships with its brand customers.
“One of the goals we have as a supplier to CPG customers is to integrate our systems. It allows us to go from being merely a vendor to a strategic partner,” says Gary McCullough, CEO.
In a recent project with one leading brand, the brand sought to reduce delays in the time it took its personnel to enter incoming data from ARI shipments into their SAP system. Additionally, it sought to reduce the time and labor needed to maintain inventory accuracy between its systems and ARI’s—something that occupied one full-time employee.
For its part, ARI had already identified opportunities to enhance reporting efficiency across its four facilities using the cloud-based functions and database of Nulogy’s PackManager. But before establishing EDI communications with the brand, reports were still fairly manual: ARI downloaded data for daily and other reports from that platform and emailed them to personnel who manually keyed data into the SAP system.
Following audits, modeling of workflows and other preliminary steps, the brand, supplier and tech-vendor team moved to eliminate repetitive data entry and the use of spreadsheets that could be automated via PackManager and transmitted via EDI.
The team ultimately settled on the highest-priority EDI transaction sets spanning areas of production planning and order processing; consumption of components (i.e., food product and packaging materials); inventory movements and shipment of ARI’s outbound goods to the brand.
To convert electronic data into the standard X12 EDI transaction formats, the company chose Nulogy’s translation tool and integration services to eliminate the need for another vendor. The result was a scalable, future-proof solution for direct, point-to-point data communication between the partners’ management systems.
When the brand eliminated manual data entry processes, it gained faster turnaround of product from ARI and reduced order-to-delivery time by two to three days.
Other benefits have come from automation of the advance shipping notice transaction, which allows forklift operators to scan pallet labels upon return shipments from ARI. This has reduced the receipt process by at least 30 minutes for every inbound shipment. Additional improvements include better case-fill rates, on-time demand KPIs, inventory accuracy and other operational enhancements. By automating transactions, it has saved the organization the equivalent of half a full-time analyst’s salary. Plus: No more waiting for someone to arrive in the office to process those transactions.
In turn, ARI, between last July and January of 2017, slashed more than 400 labor hours related to preparing and processing shipments, preparing receipt reports and updating inventory adjustments. Business is set to expand with the brand to additional ARI facilities and greater user of EDI.
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