Fixing supply flaws

Ceramics manufacturer Royal Doulton has overhauled its supply chain systems. Computer Weekly finds out how

Ceramics manufacturer Royal Doulton has overhauled its supply chain systems. Computer Weekly finds out how

The name Royal Doulton is usually associated with dainty teacups and fancy figurines but recently the ceramics firm has developed a taste for technology.

The story begins in 1998 when Royal Doulton overhauled its IT systems, implementing a new retail system from software firm JDA.

As the IT manager of Royal Doulton's retail business support department Tom Kelt explains, "Our system was seven years old so we probably needed to replace it anyway. And Y2K gave us extra pressure."

The Royal Doulton retail operation is part of the Royal Doulton manufacturing group and the two share a customer/supplier relationship. For some time the retail operation had been placing orders with the manufacturing group using a bespoke electronic data interchange (EDI) system set up by its in-house IT department.

It seemed logical to roll out the EDI option to its external suppliers as well. But Kelt says the company had its hands full. The idea remained on the back burner until the firm was approached by Astech Consultants in mid-2000.

Royal Doulton was attracted to Astech, says Kelt, because it specialised in JDA software consulting and its B2B4retail software offering was compatible with Royal Doulton's existing JDA-based system.

The main impetus for setting up the system was to get orders to the supplier quicker rather than to save on manpower, says Kelt. But the company did anticipate other benefits such as a less labour-intensive ordering process and expected to realise savings in costs and resources.

Kelt was then charged with producing a document outlining the key benefits. The company decided these benefits outweighed the costs and went ahead with the system.

But first Royal Doulton requested that a couple of changes were made to tailor the system to its needs. Royal Doulton wanted to have more control over its orders, says Kelt. In particular, it wanted to make sure that orders exceeded a minimum value and that it was not spending too much with any one supplier. But these changes only took a couple of weeks and then the system was ready to be trialled.

Royal Doulton has six suppliers which account for 75% of its business. Initially, pilot tests were set up with two suppliers before parallel tests involving five suppliers were conducted.

Testing the system in parallel to the existing paper-based system threw up a few problems, however. Although the pilots were supposed to last two weeks, they continued for a month at the behest of the suppliers.

The main problem was that the suppliers had opted to receive orders via e-mail instead of by direct file transfer. So, although orders were sent out automatically on the Royal Doulton side, the suppliers had to open up each e-mail and print out the order requests manually.

Aside from this administrative burden, it soon became clear there was a more fundamental problem - keeping track of orders. Orders sent via e-mail would arrive earlier than the ones sent through the post.

"We were having trouble confirming that orders sent to the suppliers had been completed," says Kelt. So the suppliers wanted more time to get to grips with the way orders were coming to them.

Perhaps not surprisingly, initial feedback from the suppliers was mixed. But Royal Doulton had wanted to use direct file transfer and was only using e-mail at the suppliers' request.

Once the month had elapsed, the five suppliers were told that they would no longer receive orders by hard copy. That was at the beginning of May. The difficulties in the pilots, with orders coming to the suppliers at different times, had proven the benefits of the system.

The next step will be to involve other suppliers. Royal Doulton also intends to switch to direct file transfer and to encourage its suppliers to send order confirmation and invoices using the system.

The company's relationship with Astech is ongoing and the two have been closely monitoring the system's progress. Royal Doulton has since chosen to upgrade to the new version of the system and also implement another product from Astech called Interact. Kelt believes Interact will help the company get more suppliers involved and ease the changeover to direct file transfer.

The system cost £12,000 and the total cost of implementation, including consultation costs, was about £30,000. But upgrading to the new version of B2B4retail will not incur any additional costs as this will be covered by the existing maintenance agreement.

Kelt is happy with the support given by Astech. "They have been very responsive in making changes quickly," he says.

So far, Royal Doulton has adopted only one of B2B4retail's five supply-chain modules - the one that deals specifically with purchasing. But Kelt says the company will be looking at using technology to improve other areas of its business. "We are always looking at ways of working more efficiently," he says.

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