PR – Electronic document interchange EDI contributes to fast expansion of 1. day company6. February 2017
6th February 2017, Brno – The key factor for sustaining fast growth is for a retail company 1. day the widest automation of sales, purchase and logistics processes possible. The implementation of ORION EDI solution from CCV Information systems brings electronic document interchange (EDI) which the company 1. day launches from January 2017 by a pilot operation and a subsequent live connecting of 64 vendors.
EDI communication as the necessary condition of development
Innovation in the form of implementing EDI (Electronic Data Interchange) builds on automatic creation of orders based on warehouse inventory or management of warehouse personnel using barcode readers. The aim is to ensure that the ongoing expansion of retail network doesn't generate the same increase of mainly personnel costs.
Currently, the company 1. day has 60 retail stores mainly in the Eastern Slovakia and around Bratislava. In the last year only, it opened 6 small-area „convenience“ stores and at the planned pace of 10 to 15 new stores annually would soon like to cover all Slovak district cities.
Hand in hand with this rapid expansion goes also the volume of documents growing at geometric progression and the related demands on their processing. The operational problem is manual rewriting of documents into the information system and the associated error rate which the company 1. day estimates to be at 10 %. Comparing invoices against the receipt and order by the invoicing woman printing them all out and checking line by line burdens business processes and puts ever increasing requirements on company's employees.
The management of 1. day, thus, decided to engage all its vendors in the electronic document interchange: „ORION EDI is for us the way to underpin our expansion. If we want to widen and change the product range and in two to three years have not 60 but 100 stores, we need these business and logistics processes as automated as possible. Otherwise, with the growth will also grow the personnel costs. Our employees are already nowadays working with two to three thousands of documents monthly. It's concerning invoices, orders, delivery notes or receipts. With the growing number of vendors and stores, the amount of this work and also the huge error rate multiply,“ sums up the reasons for implementing structured electronic document interchange Martin Polák, Director of 1. day.
Elimination of errors as the biggest benefit anticipated
High error rate logically brings about also a high number of corrective tax documents, delivery notes, etc., which costs a huge amount of an employee's time that they could otherwise dedicate to doing the business. The biggest share on the error rate is accounted for by a small percentage of vendors who participate in total turnover by approximately 7-8 %, which does not diminish their importance, though. Owing to the so-called web EDI, it is, however, also possible to engage also these companies in the electronic data interchange very quickly regardless of what information system they are using or if they even have one. Only a common web browser and Internet connection suffice. Engagement of all vendors in the electronic document interchange will enable 1. day to avoid huge problems during monthly closures and evaluations that making mistakes causes.
The automation of the transmission of information from documents among business partners itself is a huge benefit, however, important is also the easy possibility of control and feedback. „If the control is done on paper, then in a smaller company, when people are reliable, it is quite manageable. With a growing company, however, the number of transactions and also people grows and it is only logical that somebody forgets something or makes a mistake. With the help of ORION EDI, we want to prevent such a problem to happen after, let's say, half a year and it being difficult to trace how it came about and why,“ adds Martin Polák, Director of 1. day.
Another hot topic is the optimization of logistics. As a trading company, 1. day also tries, using high-turnover goods, to minimize inventory level and the working capital which is bound in it. Individual stores have limited warehouses and the central warehouse, from which the stores order 90 % of goods (the rest is delivered by vendors directly to the stores), has also its limitations. With this should help especially EDI message DESADV – notice of delivery. The so-called electronic delivery note that a vendor sends before the physical delivery of goods to a buyer will enable to prepare for a specific receipt of goods in the central warehouse, as well as at individual stores. Together with SSCC codes that 1. day already utilises, it will speed up especially the receipt of goods at the central warehouse by tens of percentage points.
First steps towards EDI
The company 1. day made the decision to launch EDI communication with their vendors in the middle of this year. Owing to several years of positive experience of a partner company Gurlex with ORION EDI, they chose precisely this solution from CCV Information systems. After necessary modifications of a warehouse system is the initial engagement of the first vendor planned for the beginning of 2017 when all the responsible employees of 1. day will also be trained. Already from the beginning will be 1. day exchanging with its business partners electronic order (ORDERS), delivery advice (DESADV), receipt (RECADV), invoice (INVOIC) and also the corresponding notification messages. The extent of these messages (companies often start with just ORDERS and INVOIC) will allow, among others, also the so-called automatic clearance of invoices when ORION EDI mechanically compares order with receipt and invoice. In case the data match, the invoice goes to the posting directly. Otherwise, the operation staff is warned and sees to solving them.
The condition for immediate enjoying of the benefits of the whole project of EDI communication is fast and smooth engagement of the biggest number of vendors possible. The company CCV Information systems that provides the solution ORION EDI as a service (SaaS) will also be a project leader of the whole process of engagement, the so-called roll-out of vendors. „According to our experiences from similar projects, we expect the engagement of all 64 vendors to happen in the horizon of 6 months from the successful ending of the pilot operation,“ estimates Ľubomír Miškolci, Managing Director of CCV Information systems.