Supporting SMEs of the furniture industry in Germany

1
Supporting SMEs of the furniture industry in
Germany

• Results from PROZEUS best practice
  examplesSteffi Kroll, GS1 Germany Oslo / Dec
  04, 2007

2
GS1 Germany at a glance

• Basic technologies and standards
• GLN, GTIN, SSCC, EANCOM, GS1-XML, EPC/RFID,
• Process standards, e.g.
• Efficient replenishment
• Efficient unit loads
• Cross docking
• Category management
• Customers and users of the GS1 barcoding systems
  approx. 128.000

• Service and competence center for cross-company
  business processes in the sector of consumer
  goods and related industries
• Antitrust law approved non profit organisation
• Member of the global GS1 community(2nd largest
  member organisation)
• German representative of EPCglobal

3
The project PROZEUS 2002 to 2008
Initiated / lead by
Focus Manufacturing Industry
Focus FMCG
Funded by
Subject
Over 60 SME pilots applying electronic
integration into the value chain

• pilot results and experiences as best practice
• network with experts, IT consultants and other
  multipliers

Transfer to all SME
4
More than 140 introductory consultations
Rund 70 Beratungen vor Ort durch GS1-Experten
seit 2005
5
More than 60 best practice projects funded

• PROZEUS promotes adoption of e-business - based
  on proven standards
• up to now 60 SMEs received grants for best
  practices
• 14 new projects coming soon
• experiences and benefits of projects are
  documented and made available to public for free

6
Subjects of e-business projects in PROZEUS

• Category management
• CPFR
• Customer relationship management
• Barcoding in logistics
• e-catalogues
• e-market places
• electronic data interchange
• e-procurement
• Joint forecasting
• Master data alignment
• Online shops
• RFID
• Vendor managed inventory

7
Sectoral focus
8
eInvoicing with digital signature at ILERT GmbH

• Best Practice Example 1

9
Who is Ilert GmbH?

• Owner-run manufacturer of coffee tables
• Founded in 1980
• 24 Employees
• Turnover 2006 more than 20 Mill.
• Vendor of all purchasing associations and
  considerable discounting furniture stores in
  Germany and bordering European countries
• Global purchase of material

10
EDI at Ilert Review and Forecast

• 1998 Start of classic EANCOM-EDI with converter
  (ORDERS, ORDRSP)
• 2001 Introduction of electronic INVOIC
• 2003 shut down of own converter, change to
  Clearing Center of 1eEurope Deutschland GmbH
• Achievements until 2006
• 10 partners exchanging electronic order and order
  response
• 7 partners exchanging electronic invoice
• 2007 Introduction of digital signature für
  invoices - supported by PROZEUS
• Forecast
• Target EDI with 50 partners
• Electronic catalogues
• B2B shop with EDI-applications

11
Reasons for the project

• Legal security (2 methods accepted in Germany)
• EDI invoice register (facsimile)
• EDI digital signature
• Innovation
• Customer retention
• Sales marketing reasons
• Being ahead the market
• Lean processes
• Up to now two processes
• Invoice via EDI or Letter/Fax
• Invoice Register
• From now on only ONE process
• e-invoice digital signature
• Lower costs of invoicing
• Less manual efforts, corrections

12
Project scheme at Ilert
13
Project scheme at IWOfurn
14
Efficiency and profitability of the project

• Investments
• Software 1.700 EUR
• Service provider 19.000 EUR
• Annual costs
• 7.000 EUR for licences
• 2.600 EUR for maintenance
• Savings
• Only 13.000 transactions instead of 22.000 in
  invoicing
• Saves about 18.000 EUR p.a. in handling
• Amortization after 1,5 years

15
E-catalogues at Alfons Venjakob

• Best Practice Example 2

16
Who is Alfons Venjakob GmbH Co. KG?

• Manufacturer of furniture for dining rooms and
  coffee tables
• Situated near the city of Gütersloh (North West
  of Germany)
• 162 Employees
• 43 Million Euro turnover in 2006
• About 100.000 Orders p.a.

17
Reasons for the project

• Manually handled orders cost lots of time and
  cause many mistakes
• Solution is supported by purchasing associations
  (Atlas, Begros, Union, VME etc.) and is therefore
  future-proof
• Support one new standard in furniture sector
  CSA-PRICAT (Standardized price-sales-catalogue
  for customer specific arcticles in EANCOM)
  instead of establishing individual solutions
  with every single partner

18
Situation in furniture industry highly variable
articles
e.g. chair no. 214

• Alternative 1 wood / colour
• oak, P43
• oak, bright
• oak, individual coloured
• beech, cherry tree coloured
• beech, old cherry tree coloured
• beech, walnut tree coloured
• beech, alder tree coloured
• beech, pear tree coloured
• beech, bright
• beech, bright maple tree coloured
• beech, individual colour

Alternative 2 90 fabrics

• Alternative 3 upholstery
• foam
• springs

Alternative 4with or without arm-rest
Total number of versions 11 x 90 x 2 x 2 3.960
19
How does the new process work

• Master data are send via CSA-PRICAT to IWOfurn
  and transcribed to an e-catalogue.
• Data can automatically be transferred into
  software of furniture retailers
• Retailers can generate orders automatically from
  point of sale and send it to Venjakob via IWOfurn
• Responses of standard orders (95) will be send
  on the very same date
• Invoices are send via platform as well

20
Situation prior the project

• 100.000 orders p.a.
• 88 via fax,
• 10 via email
• 2 via letters
• Entering the orders into the ERP-system takes
  about 1,5 minutes
• The orders have to be checked concerning
• customer information
• delivery address
• inconsistencies article number, description of
  article
• Order responses
• 93 via fax
• 3 via email
• 4 via letter
• Full process of ordering and order response took
  3 working days

21
Savings and increase in productivityVenjakob
expects 70 of all transactions to be handled
through new process

• 3.500 Euro postal charges for invoices
• 3.500 Euro postal and fax charges for order
  responses
• 2.800 Euro costs for printing invoices
• 700 Euro further costs for paper, printer etc.
  
• 6.000 Euro less costs for transactions (saved
  fees to retailers)
• 4.000 Euro saved time for preparing individual
  statistics
• Annual savings approx. 20.500 Euro
• 2 minutes saved per order response
• 0,25 minutes saved per invoice
• With 70.000 transactions Venjakob will increase
  its productivity by 2.625 hours
• Productivity increases by 78.750 Euro p.a. (at an
  estimated hourly rate of 30 Euro)
• Total 100.000 EUR saved p.a.

22
Dissemination of best practice to other SME
60 SME-Projects in PROZEUS
BestPractice
Other SMEmanufacturing industry, fast moving
consumer goods, retail, services
23
Results and experiences in full detail

• description of applied standards
• benefits and profitability in facts and figures
• organisational prerequisites
• guidance for change management
• useful tools (check list, project plan)
• hints to avoid common mistakes
• answers on FAQ

• ? all publications customized for SMEs
• easy language
• easy to understand
• easy to adopt

24
Questions?
Steffi Kroll Project Manager PROZEUS E-mail
kroll_at_gs1-germany.de
supported by
managed by