Mannings Retail Ltd.
Mannings Retail Ltd. had initially introduced scanning systems in some of its stores. However, to develop this system further across all stores, Mannings required an upgrade and open point-of-sale scanning system that would easily integrate with its existing applications. Pilot tests were run where errors and potential improvements were identified.
The key lessons learnt applied to both technical applications and people issues. Improvements to Mannings' implementation process were identified, which included source marking for all items with international barcodes to help support their SCM practices.
Jusco Stores (HK) Ltd.
Jusco Stores (HK) Ltd. is part of the Japanese based Aeon Group, they currently operated 8 general merchandise stores in Hong Kong. Jusco has increased its operational efficiency in a number of ways through the adoption of EDI.
Jusco adopted EDI for four particular operations throughout their stores.
- Purchase Ordering
- Payment Requisition
- Sales Data
- Inventory Data
Operating with its original manual procedure for purchase orders, Jusco was using the fax system to send orders to suppliers, which again led to the usual problems. Transmission is slow, orders can be inaccurate and there is no order acknowledgement from the supplier, increasing the possibility for mistakes.
In 1997 these faxed orders were replaced with EDI messages sent through a PC gateway. All Jusco products are barcoded and scanned at checkout. Using EDI, the supplier delivers the goods to the store and his system automatically generates an invoice to match the order received. In 1999, the number of suppliers using EDI had increased by 91% over the previous year and 53% of all orders are made using EDI.
For Jusco the adoption of EDI has improved their delivery rate and enforcement of Just-In-Time deliveries and has also reduced the entire cost of the ordering process. EDI invoicing processes are now more reliable than the original manual system. Suppliers can now send online payment details to Jusco. As a result all human error and fax problems are eliminated and overall administration overheads are reduced substantially.
Selected strategic suppliers have access to Juscos' sales and inventory data, which can be used to establish Key Performance Indicators (KPI). This can help to improve stock movements and forecast accuracy, thus enabling both Jusco and the supplier to reduce inventories, operational costs and the likelihood of stock out. Jusco is currently in the planning stages of utilizing EDI to transfer sales and inventory data electronically to strategic suppliers who then can proceed to the process of replenishment according to these data. This information can be processed automatically and used for production planning, shipment scheduling and inventory forecasting.
- Customer Assisted Ordering (CAO) will reduce inventory costs
- Reduce 10% in ordering job cost when using EDI vs PC fax order
- Over 20,000 man-hours of administration can be saved
- Improve delivery rates and achieve "just-in-time" delivery
- Improve communications
- Speed for sending out per PO reduces from 28 sec. to 1.8 sec.
ParknShop Ltd.
ParknShop Ltd. (PNS) and its manufacturer Johnson & Johnson (HK) Ltd. (J&J) undertook a project to jointly explore the opportunities to improve the management of their supply chains, partnerships and eliminate the non-value-added costs associated with their current trading relationships. To do this, they adopted a process called Vendor Managed Inventory (VMI) for all PNS stores and all J&J products. VMI is a process / best practice that facilitates continuous replenishment under product replenishment. Capturing and transmitting sales data and inventory data through EDI is crucial to ensure the efficiency of VMI operations.
A forecasting program was determined and daily stock-on hand and ex-warehouse data was shared through EDI to generate daily-proposed purchase orders for PNS - opening up the communication channels.
The benefits of the new system proved substantial. By working closely together, PNS and J&J were able to:
- Reduce overall inventory
- Reduce physical stock movement and operating costs
- Achieve more accurate forecasts
- Better manage demand volatility
- Develop mutually beneficial partnerships along the supply chain
Dairy Farm Co. Ltd.
Dairy Farm Co. Ltd. is one of the leading food and drugstore retailers in the Asia Pacific region. 7-Eleven's traditional supply chain involved numerous stages of ordering, stock taking, replenishing and warehousing. Their typical product replenishment cycle time took a total of 21 days. When Flow Through was proposed, the initial concern was the risk of disruption that may be created by the change. However, this fear was soon overcome.
The Flow Through system is demand driven, as it is generated by EPOS systems whereby products are scanned and automatically an entry of the transaction details is sent to the store's computer. From this data, the Logistics Department replenishes the store shelves in the fastest, most cost-effective way.
With Flow Through, there is no inventory held at the retailers' warehouse. Inventory is turned into cash flow and product stockholding is therefore eliminated. As a result, much smaller warehouses can be used and the need for materials handling equipment is much reduced.
The Flow Through replenishment system has given 7-Eleven a competitive edge to its users. By the end of the first week, 7-Eleven's service level was 95% and customer delivery satisfaction is now 99.9% every time. Other advantages resulting from their adoption of the Flow Through process have been:
- Improved cash flow, by reducing stockholding from 21 days to 0 days
- Warehousing sizes were reduced by 60%, drastically decreasing operational costs
- Decreased staff costs
- A 20% increase in productivity
- Cycle time is now 24 hours compared to the original 21 days
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