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Expert InformationPurchasing & Logistics - 13.03.18

Streamlining Supply Chains

Digitized Supply Chain Processes Boost Efficiency

Fast processes in materials management are key to keeping stock low and delivering goods to customers on time. Linking suppliers, warehouse management systems and ERP software helps reduce cycle times in supply chains. In this article, the ERP provider proALPHA introduces companies who have successfully digitized their processes.

Buffer times between stock receipt and further processing are becoming shorter. All supply and distribution chain processes therefore have to run smoothly. This can only be achieved with seamless information flows between manufacturers and suppliers. An IT system is indispensable here. ERP software serves as the central control unit of supply processes. Manufacturing and trading companies can use it to accelerate processes, reduce delivery times and determine delivery dates more precisely.

Placing Orders Automatically

To place orders in time, many companies have set up systems notifying them about their current stock on hand. The German company apra-norm has gone one step further. An electronic Kanban rack system for C parts ensures that enough screws and bolts are available for the assembly of switch cabinets. Several dozens of containers for these small parts stand on scales on the rack. Each time parts are withdrawn, the weight decreases. If it falls below a critical value, supplies are ordered automatically. During the night, the electronic Kanban system and the stock entered in the proALPHA Materials Management module are reconciled. If required, the ERP software places an order with the respective supplier.

Mungo, a Swiss manufacturer who has specialized in fastening technology, uses fully automatic production planning to ensure that there are always enough goods in stock. The company processes approx. 1,500 tonnes of steel wire per year. The Advanced Planning and Scheduling module calculates capacities and checks whether enough material is available. If stock is running short, the ERP system automatically places an order.

Increasing Transparency with Portals

To manage their stock of critical A parts, many companies use a planning-based approach instead of a demand-based strategy. Some companies even give their suppliers access to their production planning in order to reduce delivery times. RAUCH Landmaschinen, for example, has set up a web portal for its 60 suppliers. On the portal, suppliers can not only check current orders but also forecasts of production planning. This allows them to determine whether more orders are in the pipeline and to produce the parts required in advance. As a result, RAUCH can call off parts fast even if demand is high. Suppliers can also revise their master data on the portal at any time, such as delivery times and contact details. The portal therefore also helps reduce the amount of paper documents and e-mails.

Effective communication in both directions of the supply chain is essential to streamline processes. Suppliers can announce goods shipments on a portal or via EDI (Electronic Data Interchange). They can include various data in such announcements, for example, the expected delivery date, the means of transport, carrier, variances between the quantity ordered and delivered, and hazardous materials. This information is processed in the ERP system as a dispatch notification. The data of this dispatch notification can be conveniently adopted when goods are received in stock. This reduces the error rate to a minimum and speeds up subsequent processes.

Efficiently Managing Several Warehouses

proALPHA ERP is able to control more than one warehouse. Hawa Sliding Solutions, for example, has integrated all of its random high-bay warehouses and related computers in proALPHA. Be it stock receipt, transfer postings or material movements, all processes can be shown on screen. Employees use filters to select a warehouse and define whether they want to stock or withdraw goods. If goods are to be withdrawn, proALPHA sends drive commands to autonomous fork lift trucks, which then start to move the respective containers. If goods are to be stocked, suitable storage locations are automatically suggested.

Integrating Supplier Logistics Centers

Supplier logistics centers (SLCs) are usually managed as consignment areas. In general, they are located closely to or on the premises of processing companies. Parts of various suppliers can be stored in one SLC. As a result, suppliers benefit from low storage costs. Processing companies, in turn, can offer high delivery reliability for a large number of purchased parts. Such a logistics model not only ensures short transport routes. It also increases process reliability because the incalculable risks of long transport routes are eliminated. Call-off orders, shipping documents and transport data are transferred to the ERP system via EDI.

These four use cases illustrate that digital information flows in warehouse logistics lay the foundation for seamless goods movements, independently of the storage area and type. Digitalization supports industrial and trading companies in delivering goods to their customers faster.

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