June 09, 10

Сотрудничество в области EDI: повышение эффективности бизнеса через Технологии обмена данными

EDI Collaboration: Increase your Business Efficiency through Technology Benefits

Andrey BusyginNestle Rossiya LLC

2-4 June 20106-th ECR ForumMoscow, Russia

Presentation prerequisite

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EDI concept has been widely used in Russia. However the electronic order doesn’t mean the electronic data interchange.

• Learn how to save million dollars at the touch of a button?

• Using EDI messages DESADV and RECADV to improve logistic operations.

• Using EDI with Distributors.

What is EDI?

3

What is EDI?

4

EDI Theory

5

EDI responsible to :

- Decrease routine or manual work

- Speed up information exchange

- Improve quality of the data (no double entry)

- Set common business process with your partners and contractors

This

is fully

TRUE !!!!

EDI participants

Distributors / Partners

GDSN data pools

Retails / Chains

Carriers

Distribution Centers

Suppliers

VAN providers

Areas of business where EDI brings benefits

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Integration with Customers(Order to Cash)

Integration with Suppliers

of Raw & Pack Materials(Operational

Purchasing) Integration with

Carriers (Transportation)

Integration with Warehouses & 3PL providers

(Material Handling)

*/ size of cycles means interest to implement EDI

VA

N / E

DI -provider

Integration with Customers (Order to Cash)

Customer’sorDistributor’s

Information System

ORDERS

OR

DE

RS

(De

livery n

ote

)

ORDRSP

WMS

Nestle DC (managed by 3PL)

DE

SA

DV

DESADV

Goods IssueGoods receipt

RECADV

INVOIC

Goods Return

RE

CA

DV

SAP

“Nestle Rossiya”

POD

June 09, 10

Integration with Customers (Order to Cash)

Nowadays Nestle Rossiya technically realized 5 main EDI messages

Messages fully integrated with Nestle system

All messages fully aligned with ECR-RUS standards

We continue to do deployment with our distributors– ORDERS- PURCHASE ORDER/ ЗАКАЗА НА ПОКУПКУ

1. ORDRSP- PURCHASE ORDER RESPONSE / ОТВЕТ НА ЗАКАЗ

2. DESADV - DESPATCH ADVICE / УВЕДОМЛЕНИЕ ОБ ОТГРУЗКЕ

3. RECADV- RECEIVING ADVICE / ИНФОРМАЦИЯ О ПРИЕМКЕ

– INVOIC – INVOICE / ЭЛЕКТРОННАЯ СЧЕТ-ФАКТУРА

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June 09, 10

EDI with Retails

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•Metro Metro •TanderTander•АtackАtack•LentaLenta•КорабликКораблик•RealReal•SelgrosSelgros

Based on deliveries of the first Quarter of 2010 :

- 77 chains (228228 ship-to)- Turnover of EDI orders consist 51% of NPS of

Grocery and Confectionery business

June 09, 10

EDI with Partners (Distributors)

Based on deliveries of the first Quarter 2010 :

23 partners (85 Ship-to)- EDI orders consist 68% of NPS of Grocery and Confectionery business

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June 09, 10

Integration with warehouses & 3PL providers

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Warehouse Management

System

DESADV (ASN) / Transport Order

SAPR/3ERP

RECADV

INVRPT (Stock Adjustment)

(Stock Status Change)

ORDERS

DESADV w/ ref ORDERS

(Stock Status Change)

PRODAT (Material Master Data)

ORDERS (Purchase Order)

EANCOM based EDI plug-in

Nestle Rossiya

3PL Provider

INVRPT

INVRPT

Examples of effective EDI

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~ All our DCs in Russia – integrated Nestle system via EDI~ 4 millions - EDI EANCOM WMS messages per year

Each pallet has unique number SSCC (Serial Shipment Container Code ) Receipt process happened pallet by pallet : with RF terminals or with preliminary printed list.

Standard steps during goods receipt on customers side with SSCC usage:1. To take out first pallet from the truck and scan SSCC bar code.2 .RF terminal retrieve and display content of the pallet 3. Whs clerk to compare physical quantity of goods on pallet with RF figures 4. To enter difference or confirm quantity via RF terminal.5. To move pallet to the main storageThen with rest pallets all steps repeat again.

If no RF terminals then quantity confirmation clerks do afterwards in the WMS based on captured results (from paper)

EDI – Goods receipt simplification with DESADV and SSCC

!

Obvious benefits :1. Need only one pallet place to unload whole truck 2. Content of the pallet comes with DESADV message in advanceе with all attributes: shelf life , Batch code, Material codes, Quantity and many rest useful information.3. Whs clerk responsible just to check quantity and confirm it via RF terminal. 3. Time saving.4. No mistakes.5. Possibility to send RECADV and provide Prove of Delivery (POD) .

Requirements:For sender : ability to create new unique SSCC for mixed pallets during picking

process.Receiver: Ability to work with DESADV and SSCC.!

EDI – Goods receipt simplification with DESADV and SSCC inside

Existing process contradictions :1. Based on Russian legislation seller obliged to provide customer paper based

Invoice-facture during 5 working days.2. Invoice-facture should reflect the same quantity as was confirmed by customer. 3. No way to issue clear Invoice –facture in advance without customer’s quantity

confirmations.

Obvious benefits become available with RECADV:• Clear Invoice-facture creates based on RECADV message right after customer

confirmation• In case differences appropriate reason codes goes to supplier for analysis• EDI INVOIC message could dispatch to customer in few minutes.

Famous GAPs.• No way to use e’signed INVOIC as legal (due to this fact seller still responsible to

provide customers with paper based Invoice-Facture)• Extra cost to delivery printed documents to the customers.

!

EDI – Clear invoicing based on RECADV

We are waiting legally allowed e’signed INVOIC usage. ECR working on it.

Other benefits : roaming

Customer 1

Nestle Rossiya

1. All ECR-RUS VAN providers provide free of charge roaming

2. It is enough to have one link with one VAN and it guaranty EDI with anyone from network

3. Number of EDI companies rapidly growing

Other companies used EDI via other VANs

Customer 2

EDI is mutually beneficial process EDI still your competitive advantage and very soon it become regular All investments to EDI returns back with direct and indirect benefits and

savings. Effective business processes, less human resources involved, pepper savings , time savings, less number of mistakes, no double entry..

EDI require high discipline within Master data. EDI will be your horror in case chaos within the Master data and in information systems.

Respect GS1 standards. Respect ECR-RUS EDI messages standards GDSN – master data synchronization technology of the nearest future. EDI is like mobile communication – ones you taste it then you can’t live

without it. EDI – it is not “nanotechnology” EDI is not extremely expensive Then more transactions you do then higher EDI efficiency Attract your partners into EDI

Several key comments about EDI...

EDI is similar to great human innovations…

Questions