Merce Select

Manufacturer Extranet
  • Summary

    Industry Manufacturing

    Client One of India's most well-known manufacturers and exporters in their product category. Publicly listed.

    Requirement They needed to improve their supplier interface for multiple benefits. They needed to get advance alerts with exact shipment details (type, quantity, etc.) when a supplier shipped an item, so that the input and processing lines would be ready at the factory before the shipment reached them. They also needed to track reconciliation between PO and shipment, track unshipped balance quantities, improve coordination between factories (which received inward raw material) and HO (which cleared payment and reconciled accounts).

  • Our solution

    Process flow Orders are placed by the manufacturer on his suppliers by sending PO over email and fax. Follow-ups are done on phone and email. Suppliers may receive 50+ SKUs with individual quantities in a single PO, and have to map shipments against POs. A single shipment may contain parts of items from multiple POs. Even for a single SKU of a single PO, the entire quantity may not be shipped in a single shipment. Shipments have ship-to destinations, which are usually the factories of the manufacturer.

    When a supplier receives a new PO, they are expected to send samples to the manufacturer's HO for quality checks. Only after HO confirms specifications and quality is the supplier authorised to ship the required quantities to the final ship-to destinations (factories).

    Each factory needs to keep track of incoming shipments and plan the scheduling of assembly lines as per goods en route. Quality and quantity checks are done when a shipment arrives at the factory, after which GRN (Goods Received Notes) are sent by factories to the manufacturer's HO. The HO then releases payment to the supplier. If some items fail quality or quantity checks, a separate workflow is triggered among factory, HO and supplier for resolution of those items.

    In the entire process, the HO must track reconciliation of quantity of items received against quantities ordered in each PO. Each shipment received generates a few GRNs and triggers a new round of this reconciliation process. Without computerisation, this reconciliation alone becomes an expensive and inefficient process.

    Solution features The Extranet has the following features:

    • Roles.Three broad types of users: HO, factory, and supplier. Further fine granularity of rights for HO and factory users.
    • PO. The HO uploads all POs to the Extranet. Each supplier must download and explicitly accept each PO issued to him. The HO monitors POs pending acceptance and can take off-line measures to follow up with the supplier concerned.
    • Samples. For an accepted PO, the supplier is free to send samples to the HO. The handling of samples, the go-no-go response, is tracked through the Extranet. The supplier can see online the response to his samples. When samples are accepted, the supplier can ship the main goods.
    • Packing lists. Just before any consignment is shipped, the supplier has to furnish full details of packing on the Extranet. The exact structure of the packing of items into small packages, bigger cartons, etc. must be specified with precise counts and SKU code for each item, right up to the container level. The supplier may ship only part of the items ordered in a PO, and may mix items from multiple POs in a single shipment, provided that all items have the same ship-to address.
    • Packing list approval. The HO must approve a packing list before goods may be shipped by the supplier. The HO has the facility to suggest changes in the packing list, club multiple shipments in a single voyage or container, etc. Once the packing list is approved, the Extranet publishes barcode stickers which the supplier must then print and stick on each carton and sub-carton. These barcodes enable quick checking of inward goods at the receiving station in the factories.
    • Inward QA. The QA team at each goods-inward location can upload QA results on the Extranet. They may accept the full shipment, reject the full shipment or do a partial acceptance. All such status updates are visible immediately to the supplier concerned. The QA team also notes quantities received in their status update.
    • Inward logistics. Goods are often received at a central Distribution Centre and then shipped onwards after re-packaging to the final destinations in the required quantities. The delivery challans for such inward re-distribution are printed from the Extranet, and stock movement details are updated online for company-wide visibility and tracking.
    • Dimension tracking. One of the key raw materials used by this organisation is an expensive material shipped in large rolls. The exact length of the each roll differs by small amounts, and lengths must be cut in a manner so as to minimise wastage. This consumption plan is optimised at each factory as per the exact length of each roll. The supplier specifies the exact length of each roll on the Extranet when shipping this item, and the factories run their optimiser software immediately after the goods are shipped so that they have an optimised plan for each assembly line ready before the rolls arrive. This minimises wastage and saves time, since the optimisation process is time-consuming and computation-intensive. Before the Extranet, the exact dimension of each roll shipped was only known at the factory after the roll arrived and was measured. At that point, there was no lead time available to run through an optimiser cycle and re-plan the assembly line, thus losing material in wastage.
    • Reconciliation. The Extranet is the common platform for reconciling items and quantities ordered versus quantities received, status of partially fulfilled orders, delayed inward goods, quantity mismatches, etc. This tracking helps in both inventory management and account settlement with each supplier.
    • Backward integration. The Extranet integrates with the organisation's production planning systems, which are legacy systems developed over the last two decades using various different software technologies. These systems have been extended to export their PO data and various item master tables to the Extranet once a night. Data from the Extranet is also pulled by the legacy systems to integrate with Financial Accounting and production control systems.

    Technologies Linux OS, Apache, Tomcat, and Java servlets for the business logic. The browser-based UI uses Javascript and Dojo widgets. The PostgreSQL database was used during development and the system is deployed on Oracle 11g for production use. No database-specific code or stored procedures were used.