Faster turnaround time: It's a Holy Grail that promises more satisfied customers and better working relationships between manufacturers and distributors. Because the document management industry is moving at a frenetic pace, making the most of every minute is crucial.
In their quest for reducing turnaround times, some manufacturers are tapping into the power of technology, automating processes such as order entry, billing and remittance. Today, a number of software packages can connect independent distributors and manufacturers. These packages are designed specifically to improve efficiencies and "deliver the goods" in less time than ever before, allowing companies who use the technology to enhance productivity, cash flow and profits.
Sounds great, but can automation work in the real world of fuzzy fax orders, incomplete artwork, buried RFQs and rounds of telephone tag to determine job statuses? You bet it can--and does.
Sharp Systems to Streamline Operations
Discount Labels, a New Albany, Ind.-based manufacturer that operates as a PrintXcelSM company, receives several thousand custom orders daily. The company previously operated 16 fax machines that were hooked up through a router to handle up to 1,500 faxes daily.
In 1994, Sword Microsystems, a process reengineering firm based in Huntsville, Ala., that specializes in the printing and publishing industries, began working with Discount Labels to streamline its production process. Sword developed a custom system, combining a variety of off-the-shelf applications with some proprietary components. Using the new system, Discount Labels receives the orders via fax modem, allowing the information to be routed electronically to the company's internal agents throughout the entire production process. For some jobs, ordering documentation never takes paper form.
"Each order can now travel from employee to employee and then be archived for customer service at the end of the project," says Steve Wakefield, president of Sword. "Within seconds from when a fax comes in, everyone has access to it." The system determines who gets what order and when. It also allows agents to view the order electronically on one monitor that displays the paperwork and a second monitor which has the agent's main application for incorporating value-added services, such as typesetting or other customer services.
The result? Tremendous laborsaving efficiencies--four people work three and a half hours on a process that once took nine people 12 hours to accomplish. Also, management now can focus on managing people, rather than sorting through paperwork.
In addition to streamlining Discount Labels' internal operations, Sword helped to generate more business via two e-commerce solutions: Clickprint and Labelnet. With Clickprint, an application that's placed on distributors' web sites, end users can send orders directly to Discount Labels. The orders flow from order entry to plates without human intervention. Often, the only activity required of distributors is receiving payment for the online jobs. The streamlined flow frees distributors to cultivate customer relationships and promote their web sites.
Discount Labels distributors who order products on behalf of their clients use Labelnet. The application enables distributors to enter orders online, rather than completing forms and transmitting them via fax. The application also allows distributors to upload artwork and attach it to orders, so orders flow directly into production. "This eliminates the need to overnight artwork and is more efficient than emailing art files," Wakefield says. "In an ordering environment, email adds time to the process because it's not attached to anything from a systems standpoint. If the artwork isn't attached to the order, it still takes a human to pull that through."
Making Smart Investments
Back-end accounting and order entry are other production functions that industry-specific software can automate. For example, TopForm® Software Inc., an e-commerce supplier based in Norcross, Ga., offers a base package developed exclusively for distributors to help them manage internal operations such as inventory, billing and accounts payable.
How does this benefit manufacturers? TopForm provides fee-based IT consulting services to them, enabling the manufacturers to receive and transmit accounting data electronically. "We can help them create an invoice that can be automatically transferred to the distributor, where it is compared with set criteria on the purchase order," says Julie Pritchard, president of TopForm. "If it meets the criteria, funds can be automatically transferred to the manufacturer's bank and a remittance email sent to the manufacturer." Manufacturers enjoy reduced costs associated with printing, mailing and providing samples. In addition, the expedited billing process usually delivers faster payment.
Automation saves time for distributors, too. According to Dan Schroer, president of Prograde, a distributorship in West Chester, Ohio, receiving vendor invoices electronically from manufacturers has eliminated the need for Prograde to re-enter data from the vendor invoices. This enables Prograde to send invoices more quickly, often leading to faster payments from customers.
Software also can improve the order-entry process. For example, Schroer uses the internet to deliver purchase orders and digital files to vendors more efficiently. The electronic transfer of purchase orders from distributors to manufacturers enables manufacturers to import data directly into their systems.
Four51 Inc., an e-commerce provider in Minneapolis, provides further integration among consumers, distributors and manufacturers. Its system allows distributors to process sales orders from customers, place procurement orders with manufacturers, create RFQs, award bids and submit purchase orders--all online. For manufacturers, it provides a direct link to distributors, enabling manufacturers to receive repeat and standard orders and enter them into production more quickly.
Discount Labels incorporated Four51 to automate its order-entry process. "We've integrated the front end of our web site with our back-end workflow systems, so when the distributor uses our site to order a job online, the job is directed automatically to the right person in our organization," says Bernie Pasquantino, director of e-commerce at Discount Labels. "This allows the job to flow into production immediately."
Hodgins Engraving, a manufacturer in Batavia, N.Y., experienced significant growth as a result of its automation and integration investments. Using San Jose, Calif.-based e-commerce supplier printChannel.com, Hodgins offers distributors' customers an easy way to order products. Hodgins has experienced tremendous success with business cards. "The end user simply goes to a site that already has a corporate-approved design and logo, types in his or her own individual information, then views what the card will look like before the order goes into the system," says Bob Hodgins, the firm's president. The image, transmitted as a PDF file, automatically is made into plates, which are delivered directly to Hodgins' pressroom. The system generates a bar coded work order, allowing the job to be scanned and tracked throughout production. At job completion, the system creates a bill. Shipping also is linked, so labels and instructions are processed automatically as well.
"Orders get in and out the door quickly, smoothly and without errors," Hodgins says. He attributes much of his company's growth to the system, noting that most of his new business has come from online projects. Some customers were so pleased with their business cards that they asked Hodgins to add a full stationery line into the system, he says.
Quantum Net and Quantum 2000, software offered by Reno, Nev.-based e-solutions supplier Forms Management Data Systems (FMDS), also help both manufacturers and distributors deliver products and information to end users. At The F.P. Horak Co., a manufacturer in Bay City, Mich., network administrator Fay Nickel says that Quantum Net enables the firm to ship 1,000 orders weekly.
"We were able to create a text file in the format required, then export it into Quantum 2000 via Quantum Net," Nickel says. That problem was solved, she says, but the UPS WorldShip program the firm uses couldn't link directly to certain database tables. Nickel created a Microsoft Access database, which worked. In the end, F.P. Horak was able to ship more than 1,500 orders on a tight deadline with an error rate of less than 3 percent, she says.
This is Only the Beginning
Software vendors are offering more valuable tools to bring manufacturers and distributors together in an e-commerce environment. Still, "few distributors are [automating] via purchasing software primarily because the technology is new," says Nic Greco, vice president of e-business at CFC Print Solutions, a manufacturer based in Peachtree City, Ga. "Many distributors aren't ready to data exchange with suppliers." He says software represents an additional expense, and businesses must conduct a large number of transactions for the move to be cost-effective.
Also inhibiting widespread e-commerce implementation, some printing pros say, is the lack of industry-wide standards that allow for an interface that can be used by all parties. (PrintTalk Inc., a community of print management and e-commerce providers interested in establishing a common interface among their products, was launched in 2000.)
"In a perfect world, the distributor should be able to place an order electronically with the manufacturer and include the art with that order," says Ross E. Barker, president of FMDS and DMIA's 1989-90 president. "And the manufacturer should be able to acknowledge orders and provide estimated shipping dates and price confirmation electronically to the distributor." Right now, he says, that's not possible without separate programming.
Implementing efficiencies that reduce turnaround time, then, is an important process in itself. Although the industry has come a long way, an end-to-end workflow solution that can be incorporated by all independent distributors and manufacturers isn't here yet. Still, many manufacturers and distributors are testing the waters with excellent results. As more firms install systems that facilitate e-commerce (and as interoperability among order entry, production and back-office accounting becomes more common) all parties will enjoy stronger customer/vendor relationships and more profits.
Dennis McGarry, CDC, is vice president of manufacturer and technical programs at DMIA. Email him your comments at dmcgarry@PSDA.org.
