"Bolduc SPS NEECOM 2012"
How B2C Impacts the Supplier’s Direct to Consumer (D2C) Model October 18, 2012 1 Agenda Introductions SPS Commerce Overview B2C process B2C electronic trading Implementing partnerships 2 Introductions Over 25 years of experience with supply chain systems (WMS, ERP, Forecasting, Procurement, Accounting) and ED Our Own Hardware (hardware Industry Cooperative/Wholesale/Distributor) 300 suppliers to trade PO, Invoices, Freight Bills Nash Finch (Grocery Distributor) 200 suppliers to trade Grocery PO and Invoice Fingerhut (Catalog Retailer) 700 suppliers to trade Warehouse and Direct to Consumer PO, POC, Ship Notices, Invoice, Carrier Shipment Statuses, International Consolidator Currently the Director of Supply Chain Strategy at SPS Commerce. I have been in this role for over 12 year where I have worked with hundreds of retailers, suppliers, distributors, carriers and Third Party Logistics (3PL) companies to gain new efficiencies in their supply chain 3 Company Overview Founded in Minneapolis – 1998 Global Footprint 46 Consecutive Quarters of Growth 52% of the Market - Market Leader 600+ employees 100% Software as a Service (SaaS) Model 2,700+ Pre-built Integrations NASDAQ – SPSC Keys to E-Commerce Fulfillment Success Determining e-commerce requirements Managing items and reporting inventory position Managing e-commerce orders and order changes Streamlining drop shipping and transportation Simplifying, managing or automating returns, order tracking and vendor scorecarding 5 E-Commerce – Ship to DC Orders Consumer Vendors DC/Warehouse 6 E-Commerce – Ship to Consumer Orders DC/Warehouse Consumer Vendors Flow 7 E-Commerce Drivers and Trends E-Commerce can improve inventory management E-Commerce can grow sales without capital expense E-Commerce can increase customer loyalty The “threat” . . . 8 Top E-Commerce Challenges/Requirements Item setup Inventory visibility Order visibility and managing orders Managing logistics spend Branding Finding e-commerce capable vendors 9 Roadmap to World-Class Drop Shipping Item management Inventory management Order processing Order confirmation and correction Change/cancellation Order tracking Billing and payment management Return management 10 Item Management Importance of item information Attributes Adds/changes/updates/discontinues Item master cleansing Images/digital assets 11 Inventory Management Electronic Data Feed • EDI/XML • Clearinghouse Attributes • Supplier information • Product information • Inventory information 12 Purchase Orders Many smaller orders Multiple Ship To addresses Customization Personalization Shipping and handling fees 13 Order Confirmation and Correction Receipt of orders Validation of inventory available Corrections/error notification Customer notification 14 PO Change/Cancellation Purchase Order correction Purchase Order cancellation Cancellation confirmation Customer notification 15 Purchase Order Tracking Shipment Confirmation • Many small packages • Branding • Customer notification Transportation • Shipment status • Customer notification 16 The Branded Experience Marketing Private Labels, Packing Slips, Holiday Messages, Gift Cards, Related Products Literature (enforces branded customer experience) 17 Billing and Payment Invoice • Many small invoices Remittance • Many small invoices/documents reported on the voucher Debit/Credit • Adjustments • Rebates 18 Communication of Return Methods Return instructions Return verbiage Return address 19 Return Process Physical Returns • Customer Returns o Supplier o Retailer o 3rd Party Return Center • Returns from Retailer/3rd Party Return Center to Supplier Electronic Data Exchange • Request for a return • Return Authorization • Credit for returns 20 Supplier Collaboration Order performance • Designed to measure KPIs over time – (on-time delivery, order changes, fill-rates, EDI data quality, etc.) • Across dimensions (product, vendor) • Across levels (SKU, product, category) Supplier scorecarding • Timely shipments • On-time shipments • Fill rate performance • Supplier scorecard 21 Types of EDI Transactions 832 Item/Catalog 846 Inventory Availability 850 Purchase Order 855 Purchase Order Acknowledgment 860 Purchase Order Change 865 Purchase Order Change Acknowledgement 856 ASN – Shipment Confirmation 214 Shipment Status Message 810 Invoice 812 Debit/Credit 180 Return Request and Authorization 820 Remittance 22 Transaction Flow Item Catalog (832) Retailer Vendors Inventory (846) PO (850) / PO Change (860) PO Acknowledgement (855) PO Change Acknowledgement (865) Shipment Confirmation (856) Invoice (810) Return (180) Debit/Credit (812) Remittance/Advice (820) Shipment Status (214) Carriers Shipment Status (214) 23 23 Implementing Partnerships B2C capable partners Implementing electronic trading Alternatives to limited electronic trading capabilities On-going management of electronic trading success 24 B2C Capable Partners Who’s capable of fulfilling orders? Are they electronically capable? What are their capabilities? How do you get these answers? One-on-one meetings between partners Conferences Business social networks 25 Implementing Electronic Trading 100’s of Vendors Big XML Carriers The real integration challenge…. SME 10,000’s Vendors Items DSD EDI EDI EDI Distributors 1000 Items Spread Sheet Mail 50 EDI EDI Items Int’l Ship to Local Ship to DC Domestic The “legwork” of implementing technology with hundreds of individual companies on an initiative that will cost them time and money 26 Implementing Electronic Trading Partners Implementing your partners • Steps o Setup o Testing • One – one • Service providers 27 Limited Technology What happens if they can’t do it (or all of it) • Eliminate the partnership • Create a portal • Exemptions • SaaS providers 28 On-Going Data Management How to manage and monitor data success • Management by fire • In-house systems • SaaS providers o Visibility reporting o Order performance reporting 29 Questions 30 30