Magners savours sweet taste of EDI success

Irish cider brewer Magners has 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.

Irish cider brewer Magners has 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.

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