SKF, the leading global supplier of rolling bearings and seals, uses IBS web-based EDI solution to improve supplier communication, cut costs and streamline processes.
Carl-Johan Gentzel, Channel Supply Chain Manager at SKF talks about how IBS software has reduced lead-times towards the suppliers from 11 days to two day.
To cut costs and lead-times, SKF needed to provide suppliers with more accurate forecasts and rolling supply schedules, as well as tools that support major logistics processes from sourcing to deliveries and invoicing.
IBS Web Supply Manager is SOA-designed and is delivered to SKF as a SaaS solution. The software enables online supplier access for exchanging business information over the Internet. For SKF, it connects more than 25 business units over the world – each with its own ERP system – to all of their suppliers.
Supplier collaboration vital
SKF wanted a complement to its current EDI solution, whose relatively expensive costs and complex installation limited its use mostly to major suppliers. SKF wanted to radically improve visibility and collaboration with smaller suppliers who could not afford EDI. Forecasts were produced manually and often arrived too late for suppliers to use them. Invoices from suppliers would often fail to conform to the format required by the old system. These same invoices also took a long time to process, requiring complex steps and working processes.
SKF realized that enhanced supplier collaboration using the Internet was vital to ensure more efficient delivery of goods. If SKF provided accurate and instant forecasts, suppliers could plan their own production more effectively, reducing delivery times. Moreover, if suppliers could send invoices automatically to SKF, then the entire procurement processing time would be dramatically reduced.
Software as a service
IBS proposed its Web Supply Manager product as a SaaS solution for SKF. This means that IBS hosts the system and SKF pays a monthly fee. In return, IBS ensures that all SKF manufacturing units can collaborate more effectively and efficiently with their entire worldwide supplier network – with multilingual and VMI support for SKF and supplier users.
When an SKF factory places an order, IBS Web Supply Manager immediately reads
the order and sends an email to the supplier,
who uses the IBS solution to approve the order. The supplier then sends a confirmation of acceptance and can optionally import all the appropriate information into its own ERP system for production purposes.
When the goods are ready for delivery, the supplier accesses IBS Web Supply Manager and notifies SKF when the delivery to the factory will occur. The supplier even has the ability to print delivery notes and product labels in bar-coded PDF format labels, which are available directly from the Internet. This quick-response flexibility helps to ensure the fastest, most efficient goods reception in the SKF warehouse. After delivery, the supplier issues an invoice, again using the IBS solution. All of these processes are performed electronically over the Internet with no paperwork.
The IBS solution provides extended supplier collaboration for SKF by making it possible to publish any kind of public or individual supplier messages, information or documents over the Web. This information can include anything that helps to improve collaboration, such as delivery instructions, engineering data, supplier performance documents and other data. The information can be in Word, Excel, PDF, XML and other familiar formats. IBS Web Supply Manager extends SKF procurement possibilities for smaller and medium suppliers, as well as larger companies.
Speedy implementation
IBS and SKF began their co-operation in January 2004. By that April, the first pilot installation was up and running. During this time, IBS established a pilot infrastructure and carried out SKF-specific adaptations to the softwate. These included integration with SKF’s communications solutions and printouts, such as bar-code labels and packing slips, according to SKF’s requirements. The pilot site continued using its in-house ERP system, which was integrated with IBS Web Supply Manager using standard EDI messages.
IBS had an implementation team of up to five consultants, who worked closely with SKF to establish goals and timelines. After initial training of users and suppliers by IBS, SKF handled subsequent training.
After the successful pilot, the new solution was rolled out to a series of SKF sites, including factories in Germany, Austria, France, Spain, Italy, Belgium and Sweden. A range of ERP systems were integrated with IBS Web Supply Manager during these implementations. The solutions are updated continuously with new functionality, including unique requirements for a certain factory or ERP system.
Reduced lead times
IBS Web Supply Manager has automated SKF’s replenishment and payment processes and has promoted a proactive way of working. The solution simplifies and speeds up the exchange of real-time data via the internet between SKF and all their suppliers. It provides efficient tools to for publishing, retrieving and processing critical business information in a supply chain network.
SKF’s supplier communications have been streamlined, and individual orders can be tracked from inception to completion. The whole process is much faster and more efficient, leaving staff to focus on solving problems as opposed to working around them.
Excess paperwork is a thing of the past, as fax orders and piles of invoices are no longer an integral part of SKF’s purchasing department. SKF has gained benefits in cost and time savings in invoicing. Invoices now have a standardized look, and no longer require a manual check to verify correct information and addresses.
IBS software allows SKF to send its purchase orders and schedules online, resulting in shorter lead-times. Before IBS Web Supply Manager was installed, one of SKF’s suppliers needed an 11-day lead-time. This has now been reduced to two days - something that SKF thought was impossible.
