Business Climate

Managers of supply chains today are faced with economic concerns including rising costs and operational inefficiencies. It is important to focus on eliminating waste, reducing costs and increasing data visibility throughout the supply chain. This can be achieved by streamlining processes with better design and effective collaboration across networks. Excessive inventories present an unnecessary cost to manufacturers with no value added for their customers. Increased full supply chain visibility enables continuous tight scrutiny of inventory levels. The goal should be to create a system that is lean, stable, robust and allows better trending and forecasting while eliminating any unnecessary manual data entry.

Overview

Inventory that is in transit is typically in a gap between the manufacturer's inventory and its distribution centers. With a strategy to increase visibility and efficiency throughout the supply chain, Rinchem Company, Inc. (Rinchem) consistently works on continual improvement projects that affect our processes and systems. We have found that automating business processes is one step to achieving visibility, accuracy and efficiency. A business process could be an order, a receiver, an inventory transfer or others. One crucial process is the Advance Shipment Notification (ASN); it is a cornerstone of automation for inventory control, transportation and warehouse management. ASNs contribute to profitability by increasing efficiency and lowering operational costs. ASNs can be used to automate receiving processes, to cross-dock shipments for immediate outbound dispatch and to monitor product inventory levels in the supply chain.

The ASN, as discussed in this document, is an electronic file transmitted from a supplier's system to Rinchem's Warehouse Management Software (WMS) system, which provides advance notice of what products are being shipped to that warehouse and an Estimated Time of Arrival (ETA) for planning.

Benefits

Suppliers who provide accurate ASN data can save significant time in internal accounting systems and create an environment for agile manufacturing. Electronic documents mean purchase order and invoice processes can be automated as well. The increased visibility will allow for more accurate production forecasting and the ability to see exactly where the supplier inventory is located (In-Transit or Warehouse). It also creates a connection for real-time, accurate receipt confirmations.

Other benefits across the supply chain are:

• Supply chain data visibility
• Creation of partnerships
• Data available for future forecasting and trending
• Replenishment from a pull system for efficiency and cost effectiveness
• Data accuracy
• Decrease of human labor for data entry
• Data availability for future needs
• Potential for reduction of inventory and its carrying costs

What technology is used?

Sales orders or shipments are completed on the customer site using Oracle, SAP or SQL ERP applications. The files can be created as various file types (XML, ASCII, etc.). These files are transferred through the firewall to a secure FTP site or using a HTTPs form that will then be automatically imported into Rinchem's Chem-Star® WMS. The diagram below displays the process.

What is required to implement ASNs?

The investment to implement ASNs depends on each supplier's current infrastructure and the resource constraints. Challenges, timelines and expenses are based upon how much change actually must take place within each supplier system (i.e. creation of the import file etc.)

What is needed at a minimum to connect to Rinchem via automated electronic ASN is for the Supplier's IT team to code a procedure to extract a MS Excel file out of their ERP, setup a scheduled job to automatically extract and place the file in Rinchem's Secure FTP folder.

Here is a list of the fields needed in the ASN file (*Denotes a Required Field):

Current State

A supply chain that does not use ASN has multiple human data entry input and limited inventory visibility. This can result in costly errors and delays. Below is a chart of a supply chain process not using ASN.

Desired State

A supply chain using ASN has immediate visibility, limited human input, and greater accuracy and efficiency. The flow chart below shows ASN in action.

Scenario Testing

Rinchem currently utilizes the Chem-Star® WMS application with a SQL Server 2005 database for the management of our warehouse inventory. The system utilizes radio frequency (RF) technology for receiving, picking and inventory movement tracking, and allows visibility to our customers via our web-based Chem-Star® Customer Portal.

For purposes of our ASN scenario testing, we used the following technology to complete the Automated ASN tasks:

• FTP
• Excel Files
• SQL Server 2005 - SQL Server Integration Services (SSIS)
• SQL Server 2005 - Job
• Agent/Scheduler
• Chem-Star® Importing

Results

Report Example

Conclusion

An ASN generation and transmission system is a cost-savings solution that reduces errors and increases efficiencies and accuracies within the supply chain. Customers using ASNs realize greater visibility in their supply chain through on-demand reports, reduced risks of human error, which can result in delays and higher operational costs, and increased efficiencies and accuracies in shipments since the order is accounted for throughout the process based on the originator's input.

The cost of implementation can be minimal with the offset of a high return on investment. Additionally, the complexity of the technology involved may be fairly simple based on the customer's current systems.

For more information about Rinchem's ASN offer, please contact a member of the Rinchem sales team at 1-888-375-2436 or sales@rinchem.com.