Dixons has streamlined the management of its overseas suppliers by using an XML trading platform to provide a lower-cost alternative to Electronic Data Interchange systems.
The retailer said EDI was too inflexible and expensive for a global roll-out.
Overseas suppliers had been resisting the introduction of electronic trading because of the associated expense – an EDI system can cost between £2,000 and £5,000 a year – and the difficulties of implementation, the company said.
As an alternative Dixons installed the Tradocs global trading system to facilitate electronic transactions with overseas suppliers. The Tradocs platform allows the exchange of purchase orders, bills of lading and invoices over the internet.
Dixons had been generating orders for overseas suppliers from its ERP systems. Purchase orders and shipping documentation were then printed out and sent by a combination of fax and courier at a cost of between £50 and £60 per order.
Barry Harris, logistics director at Omni Source, Dixons’ global sourcing division, said, “These methods resulted in problems such as re-keying errors and missing or late documentation. This caused shipment delays and other operational setbacks and were costly to use.”
Tradocs allows Dixons to send and receive electronic documents without itself incurring any charges. Instead, the suppliers pay approximately $1 to send a document. This gives them a saving of 90% compared with using couriers. This is considerably cheaper than EDI, Harris said.
Tradocs uses the web to register suppliers. Since registration is free and transaction costs are on a pay-per-use basis, overseas supplies were “more than happy to sign up”, said Harris.
Orders are generated from Dixon’s ERP system in EDI format and sent to Tradocs through a VPN connection. The Tradocs platform then translates this EDI data into an XML document, which can then be passed on to the trading partners.
Documents relating to shipments are generated by Dixon’s suppliers electronically on Tradocs. They are then transferred into Dixons’ IT systems and used by applications such as Contempus, its invoice matching system.
Tradocs also automatically copies data from documents created by suppliers to Eagle Global Logistics and Customs clearance systems. “This eliminates the need for manual intervention, improving the reliability of data, which is crucial to successful supply chain management,” Harris said.