Irish cider brewerMagnershas extended its electronic data interchange (EDI) solution
to improve the way it processes sales and invoices. It predicts the
move will reduce costs, improve customer services and speed up cash
flow.
Magners is part of the
C&C
Group which also owns the Tullamore Dew, Frangelico and
Bulmer's cider brands.
The company has rolled out Inovis's TrustedLink and BizConnect
electronic data interchange (EDI) documents running on IBM I series
(formerly AS/400) machine following a six-month trail.
The project is saving hundreds of thousands of pounds in time
spent checking, reconciling and fixing errors in manual systems,
said Jimmy McHugh, Magners' business systems analyst.
Magners has had EDI for 10 years for sales orders and invoicing,
but managers had to check the documents manually against delivery
notes and purchase orders. The new system automates the
process.
Magners expanded its EDI system following demands from retailers
after a high-profile
advertising
campaign designed to help it break into the UK market.
It turned to Colman Computers, an Inovis reseller which had
supplied Magners' ERP and business intelligence systems for 20
years.
Magners now trades electronically with 25 major retailers in
Ireland - where it has 85% of the cider market - and in the UK. It
is also exporting to 17 countries including Germany, Spain, the US
and Australia, which is developing a taste for cider.
It is using EDI for its dealings with suppliers such as Chep for
pallet hire. "We can tell exactly when (responsibility for) a
pallet passes from us to the customer, and this is saving us
thousands a year in lower rentals," said McHugh.
It also uses TrustedLink to order logistics services from Lucey
Transport, its main delivery supplier. Staff at Lucey can monitor
Magners' order volumes in real time and gauge better how many
trucks will be needed, where and when. This allows them to plan
loads better so that trucks don't have to be repacked on each
delivery, speeding up the service.
The system automatically integrates all customer orders into
Magners' back-office ERP systems through TrustedLink. This cuts
down mistakes in the warehouse that can lead to inaccurate
deliveries or non-delivery of goods.
BizConnect reconciles orders sent and received. It monitors the
supply chain and alerts IT staff via e-mail and Blackberry when a
problem occurs.
McHugh said, "This means I spend about half a day a month
sorting supply chain problems. Without it, I was spending two or
three days a month and with only 10 customers."
Magners is now moving EDI upstream in the supply chain. It has
asked its five biggest suppliers and any who delivers at least
weekly to move to EDI for swopping business documents. Some 2,000
smaller suppliers will soon have a web portal through which they
will be able to receive orders and send invoices.
All products in both suppliers' and customers' systems are
identified by the barcodes associated with the 70-odd stock keeping
units. This has reduced errors a lot McHugh said: "Once you've got
it working, you never have to change it."
McHugh's next job is likely to be to bring Tennent's, the
Scottish-Irish brewer, onto the system. That is, if the Competition
Board nods through Magners' £180m takeover offer, which Tennent's
owners, Anheuser-Busch InBev (ABI), have accepted.
If the deal goes through, Tennent's will also start making
cider. This will give Magners a chain of tied pubs through to sell
direct, as well as shorten distances to UK retailers. That will
help offset the home ground advantage enjoyed by Scottish &
Newcastle, which distributes Magners' main competitor Bulmer's
cider.
That will go some way to achieving the company's goal, which is
to be a successful manager of international premium and niche
drinks brands that don't rely on scale for success.
Some retailers and suppliers are looking to supply goods without
a purchase order based on what they can see in their customers'
stockholding and to be paid on delivery, but that's a step too far
for Magners at present.