Iskra Avtoelektrika - Supplier EDI rollout
Iskra Avtoelektrika is a global supplier of starter motors and generators for internal combustion engines, battery powered DC drive systems and other sophisticated components for the automotive industry such as ignition coils, light alloy pressure die castings and plastic and steel cold-forged components.
The group includes subsidiary and associated production companies, subsidiary trading companies operating within its own sales network. The total number of employees in the entire group in Slovenia and abroad is over 2160.
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1) Valter Rejec (Iskra) addressing the suppliers
2) Conference Hall
3) Janez Strojan (Visit) presenting Darwin
The Problem
Iskra has over 400 suppliers throughout Europe although the majority are in Slovenia and Italy. The methods for order distribution mostly relied on faxes which, as well as being antiquated, although not a problem itself, were expensive due to the high transmission costs, and prone to human error from manual processing.
The expansionist plans of Iskra include opening many new plants around the world, increasing productivity and consequently the number of suppliers will increase. Iskra is not just looking for more suppliers; it is looking for more effective suppliers. This means using a scalable solution for communications and this instantly rules out any fax solution.
When it came to the despatch environment, Iskra provided its suppliers with an Excel spreadsheet into which suppliers would manually input despatch information so that they could then generate labels. Whilst this solution made sure that the labels were in the correct layout, the information in the labels was open to human error through manual input. This, combined with a lack of despatch notification, meant that many deliveries would have a significant delay before they were officially booked in.
Requirements
Iskra were not only interested in a scalable and affordable EDI solution; they wanted a local provider with true expertise in the EDI field, who could discuss their requirements in their native language, guide them through the complete implementation process and provide local support in the years after the rollout.
With over 20 years experience in EDI and long standing relationships with both DIP (nearly 15 years) and Iskra, Visit, DIP’s Slovenian distributor, was the perfect candidate.
Visit reviewed Iskra’s business process and recommended that Darwin Web would provide the perfect balance of flexibility and low cost, making it an ideal solution for a large proportion of Iskra’s supplier network.
Solution
As well as choosing Darwin WEB for their suppliers, Iskra also chose to use ODEX Enterprise and XLATE Evolution as the platform for communication and integration with SAP. This was first implemented in the Slovenian headquarters with a view to it being rolled out to other countries as global production increases.
The ODEX / XE platform takes SAP iDocs and converts them into delivery forecast and just in time messages (EDIFACT D96 DELFORs and DELJITs) and then transmits them to the DINET service which makes the documents available through the Darwin portal or via traditional EDI. On the inbound side, the ODEX / XE platform takes despatch advice messages (EDIFACT D96A DESADVs) and converts them into iDocs. The suppliers create the despatch advice message automatically when using the Darwin system.
A supplier rating report is generated by the Iskra SAP system and is also distributed to the suppliers by the Darwin portal or the traditional EDI mailbox. All suppliers will receive the report in this way rather than the previous method which involved a lot of manual work to distribute the reports.
Additional documents and information, such as CAD/CAM data, newsletters and announcements, will be delivered via the portal in later stages of the project.
Benefits
The supplier rating report was originally faxed to suppliers which was a laborious, costly process that was prone to error. By presenting the rating report through the portal, Iskra was able to reduce transmission costs while increasing visibility of its distribution amongst the suppliers. The portal allows suppliers to have multiple people accessing the report so that different managers of different departments can assess their performance. Previously a single report would have been shared and/or photocopied which is a very inefficient process.
The implementation of the EDI system at Iskra allows them to streamline the communications process between them and their suppliers, improving speed, visibility and efficiency. There were fewer errors due to the total elimination of manual processing and the 100% accuracy of the labels. Email alerting is being used by the DINET service to notify suppliers when messages are ready to be received so that the delivery of production information is as quick as possible.
How did it all work out
Pilots of the system were completed in January 2008 with 100% user acceptance. Iskra held a supplier conference in mid February to announce the new EDI solution and over 150 attendees were present. The use of the EDI system is mandatory so Iskra will not have any of the usual complaints or problems with suppliers not wanting to use EDI.
Fortunately many of the suppliers were able to understand the benefits of EDI for Iskra and also for themselves and were very keen to start using the system as soon as possible. The rollout will continue through 2008 with additional features also being deployed towards Q4 2008. The aim will be to have 100% EDI enablement by the end of 2009.