ONE VERSION OF THE TRUTH FOR ALL THE CHAIN PARTIES
Whether supply chain partners work well together, is noticed when looking at the time that trucks are waiting at a warehouse dock for unloading. Until last year this waiting time was a big problem at the Carrefour’s distribution centres. Carrefour managed to solve the problem using Incore’s Supply Chain Portal. The portal processes process purchase orders, and based on that information, suppliers or transporters can book their timeslot their selves, and distribution centers gain a better view on the required capacity.
“Supply Chain Portal is a web application that helps companies to better understand the chain progress’’.
The biggest problem was that Carrefour lacked an efficient system to properly manage the arrivals of the trucks. That pain was especially felt at the distribution centers of Kontich and Nijvel. These distribution centers are managed by Kuehne + Nagel and mainly contain fast moving consumer goods (FMCGs) and alcoholic beverages. At peak times, the lack of coordination caused long queue lines on the loading docks, while at other times the site was completely empty. This often resulted in long waiting times and therefore resentment of suppliers and carriers. Carrefour also did not have a good idea about the carries – supplier relation. As a consequence of this, it could occur that a carrier who had to deliver goods from three different suppliers did not automatically receive only one timeslot for all the goods. This caused annoyance.
Fltr: Martin Swaters, Ignace Craeye en Lauriane Claeys: “Because the time of arrival and departure is always recorded, it is precisely known how long a driver has been on the site, whether more time was needed etc. Everything has become measurable now’’.
APPLICATION REVOLVED AROUND TRANSPARENCY
A few years ago, Ignace Craeye, project manager at Carrefour, met Martin Swaters, Director of Incore Software. "At that moment I realized the existence of a software solution to coordinate the goods and information flows," so said Ignace Craeye. "Then we decided to have a look into the different solutions in the market. On the one hand, we have examined five different solutions in the market, on the other hand, we looked at whether we could possibly develop something in our own ERP SAP. We considered this as a joint project with Kuehne + Nagel. Both the selection and implementation project Carrefour and Kuehne + Nagel have done together. Finally, Carrefour and Kuehne + Nagel chose for Incore Software. About a year and a half ago the contract was signed, after which a project team was established, consisting of people from Carrefour, Kuehne + Nagel and Incore. The choice for Incore Sofware was mainly based on the fact that several big retailers were already customers at the company and that Incore Software knew very well what this particular world is about. "We sell the Supply Chain Portal as a web application that helps companies better understand the chain progress," adds Martin Swaters. "The solution can support various steps such as planning, executing, monitoring and updating different processes. One of the most important benefits of working with such an internet portal is that all parties involved can see only one version of the truth. "
STARTING WELL PREPARED
In a first phase, the inbound processes of the two distribution centres were mapped out in detail. Soon afterwards a "sandbox environment" was created, in which users could get familiar with the portal. "Through workshops we also learned how the system works for a retailer in the Netherlands. Although the operational environment were different, the insights we gained were a good base for getting started, "said Lauriane Claeys, Director of Food & Non Food Supply at Carrefour. After half a year Carrefour went live with the internet portal. Shortly before that, Carrefour started training the suppliers and carriers. The implementation in "waves", was spread over six weeks, this allowed Carrefour fully control the set-up. Currently between the 900 and 1000 suppliers and 32 carriers work on the portal, aside from Carrefour and Kuehne + Nagel itself. "Initially, suppliers and carriers who had to start working with the Internet portal were critical," said Lauriane Claeys. "But since they were also unhappy about the former situation at the docks, they were open to it. In constructing the algorithms, we use in the system, we have also involved one major supplier and one carrier, "said Lauriane Claeys. " Of course there was a lot of attention for security aspects. "Offcourse suppliers can only see orders for their own organisation and price information will not be communicated to the carriers. The carriers' employees only see the information they need, such as the client, the items and the number of pallets, "said Martin Swaters. "At the same time, Carrefour's IT Security Service conducted a thorough audit to check if the application was sufficiently resistant to abuse."
HOW IT WORKS?
Since a year ago Supply Chain Portal creates transparency starting from the purchase order up until the moment the goods have been received at the DC. The functionality of the portal starts at the same point as when purchase orders are sent from SAP to the supplier, via EDI, email or fax. Simultaneously the purchase order is sent to the web application to inform all the supply chain parties. On the portal, the supplier or carrier sees which orders to deliver to a particular distribution center on particular day. The application then sets the available hours for which the supplier or carrier can deliver to the distribution center. The supplier or carrier chooses a timeslot and confirms. When entering the order, the application also includes the number of pallets per order. "In the retail sector, estimating these volumes is very important. Through the internet portal, Kuehne + Nagel knows exactly who has booked what loading dock and what volumes are expected that day or the next few days. This insight makes it possible for the logistics service provider to estimate the required capacity much better. It was very important for us to include that volume in the tool. For example, the supplier or carrier can 'tetris wisely’ load his truck with pallets, "said Lauriane Claeys. It is Kuehne + Nagel that manages the capacity and determines in the application when the distribution center is open and how many pallets per hour can be sorted by type of products (drinks can be unloaded faster than other products). "An accounting module keeps track of all of Carrefour's business rules closely, such as which products cannot co-exist in the same shipment, combining those with finite capacity planning of logistics resources in the delivery areas," replies Martin Swaters. "From my experience, I can rest assured that this is a good deal of computing." When the driver arrives at the distribution center, he indicates the Carrefour order number on a screen at the reception. At that time, the official arrival time will be registered immediately online. Kuehne + Nagel assigns a loading dock to the driver, after which he can unload. When the driver leaves, the Kuehne + Nagel employee will enter the hour of departure. "In the past we had discussions about when a driver had exactly arrived. Since the new way of working, no doubt is possible, "says Ignace Craeye. "In addition, the supplier can also accurately see through the internet portal when his driver signs up at the distribution center. Because the time of arrival and departure is always recorded, we also know how long a driver has been on the site, whether more time was needed, etc. Everything is measurable now. "
Through the internet portal, Kuehne + Nagel knows exactly who has booked which loading dock and what volumes are expected that day and the next few days. This insight makes it possible for the logistics service provider to estimate the required capacity much better.
FIXING THE PROBLEM
Through the portal, Kuehne + Nagel gains insight who has booked which loading dock and how many pallets are expected that day and the next few days. This insight makes it possible for the logistics service provider to estimate the required capacity. The combination of that insight and the elimination of peaks/spikes as a result of the slot booking algorithm makes it far much less busy at our parking lot now. "In the past, many trucks arrived at six o'clock in the morning, with the risk of waiting until ten o'clock. Because they have now booked a timeslot in advance, such situations hardly exist anymore, "says Lauriane Claeys. The figures don’t lie. The waiting times of the suppliers - time between arrival and entry - are more than halved. The lead time of the suppliers - time between arrival and exit of the site - is reduced with 36%. Finally, 7% more suppliers arrive on time. "Together with the suppliers and distribution centers we have laid down some rules so that the game is played fairly. A truck that arrives on time always has priority. A truck that will arrive late, we ask to notify. This can also be done by the carrier or supplier via the internet portal. That way we can do all we can to help him, "said Lauriane Claeys. If problems are encountered, now it is easier to put the finger on the problem. "We now know who's on time and who’s not. Thanks to this transparency, there is no discussion anymore with a late supplier or transporter. Also we can check whether invoices in witch additional costs are charged for long waiting are correct or not. "In addition, Carrefour drastically reduced mail traffic and the number of phone calls with their supply chain parties, thanks to the portal. This has also greatly simplified administration. "If a vendor or transporter wanted to change his appointment to an earlier moment in time, he had to call or mail Carrefour, which in turn had to consult the distribution center. Through the internet portal he now can do this very easily, "illustrates Ignace Craeye.
TIME FOR FINETUNING
In respect to the implementation itself, Ignace Craeye says: "We needed a little more time than initially planned because we had some specific adjustments made to the application. Also, we did not want to go live just before the end of the year. After an enthusiastic start, we faced some operational challenges, to accurately predict the amount of resources necessary for the receiving process. ‘’ Only after the system is live, you find out if you've figured everything out correctly, "adds Martin Swaters. "It was more of a two-step implementation. First, you need to make sure that receiving goods are spread evenly throughout the day. Only after this is properly regulated you can optimize efficiency and adjust the algorithms. Also making the system more user-friendly - for example, the greater volumetric visibility that Carrefour wanted to offer to its suppliers - is something that took place in the second step.
"The trucks now spent much less time on our parking, but it might even become better. We want to further optimize the reporting and we want to share this information even more with our suppliers, so they can also contribute to further improvement, "said Lauriane Claeys. "Now that we have volume measurements (i.e., the number of pallets) over the one-year period, we also help to better assess the influence of seasons on our capacity. For example, during a hot summer, we need more capacity for drinks. If we know better how much extra capacity is required in such periods, we can respond better to that in order to prevent queues in those busy periods. "