Nationwide Home Furnishings Retailer Enjoys End-to-End Supply Chain Visibility

Client Profile

This major Canadian owned home furnishings retailer operates 160 stores across Canada under a variety of banners. Several distribution centers spread across the country provide product to the stores. In addition, many of their product lines are secured from offshore suppliers - mostly small and mid-sized manufacturers. The combination of world wide suppliers and the wide distribution of stores across Canada make this retailer an organization with a worldwide reach.

Business Problem

For a number of years this retailer has benefited from Electronic Data Interchange (EDI) with larger domestic suppliers with whom they implemented a traditional EDI system for sending electronic Purchase Orders (PO's) and receiving detailed Purchase Order Acknowledgements and Advance Ship Notices (ASN's). However, a chronic lack of EDI resources and specialized infrastructure caused long cycle times to test and certify "EDI ready" suppliers and go live with them in a production environment. For the retailer, this resulted in a low EDI adoption rate by suppliers which meant that the benefits of EDI were not available to either the retailer or their suppliers.

Furthermore, even with sophisticated EDI applications, some large suppliers balked at making expensive changes to their back end applications in order to give the retailer the real time supply chain visibility it desired. For example, an "EDI-ready" supplier could accept and action an electronic PO but be unable to create a Purchase Order Acknowledgement as specified by the retailer. This was a result of the limitations in their back end systems rather than an EDI software problem. The data, workflow and business logic necessary to create a PO Acknowledgement is typically resident in a back end application - such as a sales and distribution system. This retailer came to the realization that EDI was simply not the panacea it was hyped up to be.

Additionally, local competition and a shifting global manufacturing base heightened this retailer's need to look to far-flung Asian suppliers to source "big ticket" items such as furniture. Many of their import suppliers were small to mid-sized companies that were unwilling to bear the high cost of implementing and supporting EDI technology. Low utilization of the technology within an EDI capable domestic supply chain and almost zero adoption of EDI within an incapable off shore supplier base created a supply chain visibility problem for the retailer.

Scope of the Problem (Additional complexity)

The retailer had already made significant investments in an internal EDI program some years ago. There was no desire within the retail organization to replace this investment with newer more expensive technologies and disrupt a stable environment. A new solution had to use an incremental approach that included leveraging existing technologies - not just EDI - but other legacy applications as well, in a manner that the organizational focus shifted from technology to synchronizing business processes with suppliers.

Offshore suppliers were geographically dispersed, culturally diverse, technologically un-sophisticated and had a limited understanding or appreciation of North American supply chain business practices. To solve this particular problem, the retailer had previously considered a variety of solutions and models - including building web based "extranets" or "supplier portals" in order to bring these suppliers into their business fold. However, prior experiences with difficult internal technology implementations convinced senior management that simply "throwing technology" at an external supplier community would not solve this problem. Instead, complete supply chain visibility would require not only elegant technology, built from a supplier's perspective, but the assistance of a technology service and support organization with the experience and expertise required to successfully manage a diverse supplier base

The Solution

In order to address the problem, the retailer selected QLogitek with their L'eBIZ service to help maximize supply chain visibility. The L'eBIZ solution included a carefully managed "EDI testing service" designed to work with EDI-ready suppliers to rapidly and accurately test and certify in accordance with the retailer's EDI standards. This invariably alleviated the company's EDI resource challenge.

As well, QLogitek directly engaged with "EDI ready" suppliers and manufacturers who were not able to participate fully in the retailer's electronic supply chain program due to the internal limitations of their back end applications. Each supplier worked with QLogitek personnel to define their business processes in accordance with the business rules of the retailer. QLogitek's expertise within the fields of supply chain technology, hosted retailer-specific business logic and cross-company systems integration helped these suppliers very quickly and inexpensively comply with the retailer-s specific needs.

QLogitek implemented a customized, supplier portal to enable the offshore suppliers to participate in the retailer's EDI program. In a matter of months, QLogitek provided the client with an environment in which suppliers could quickly "sign up" to exchange EDI data with the retailer. As a result, any registered supplier can now submit Purchase Orders (PO's), Purchase Order Acknowledgement and Advance Ship Notices (ASN's) electronically through the L'eBIZ service without the need to develop or manage their own EDI environment. QLogitek worked with suppliers to ensure that each supplier was able to submit transactions that conform to the business rules of the retailer. Since the suppliers are not required to purchase new hardware or software to implement the solution, the only costs associated with fulfilling the retailer's requirements for EDI are per transaction fees for each document submitted.

The L'eBIZ team is staffed by personnel that speak over eighteen languages. Its roll out and help desk services ensured that suppliers were mobilized (and in some cases "herded") in a timely manner to participate in the retailer's initiative. Suppliers were given "live training" on the solution prior to final implementation as well as first-level support after the system was put into production. This rigorous rollout methodology ensured very high adoption and utilization rates within the supplier community. The L'eBIZ solution allowed the small offshore suppliers to compete on an equitable basis with the large suppliers who have major investments in EDI infrastructure.

The Results

The VP of Logistics and Inventory Management stated, "We are committed to maintaining high levels of customer satisfaction by achieving and maintaining industry leading, in-stock positions and flow of product in factory fresh condition. Supply Chain process optimization through automation is a key initiative for us."

The L'eBIZ Supply Chain Collaboration solution from QLogitek allows even the smallest and most remote suppliers to become fully EDI compliant in a rapid, cost-effective manner. In conjunction with the retailer, these suppliers are provided with complete supply chain process automation and process support, resulting in smooth business processes, which places products where they belong, in the stores and available for sale to customers. Small suppliers are capable of conforming to the retailer's rules for transmission of PO's and submission of PO Acknowledgement and ASN's using the correct file formats and conforming to the retailer's business rules. These suppliers reduced non-compliance charges by the retailer, the number of phone calls required to track orders, and improved their ability to deliver product in a timely manner.

Today, the retailer receives a "Clean Advance Ship Notice" from the vast majority of its suppliers - irrespective of their location, size or capability. This has substantially improved the retailer's view of its inbound supply chain from countries such as China, Vietnam, India, Malaysia, Thailand as well as US, Canada and Mexico.

Over the last three years QLogitek has provided this retailer with a variety of services to support further automation of their supply chain and facilitate trading with their many partners ranging from large international manufacturers to local distributors of specialty products.