Peeling Away a 'Band-Aid And Bubblegum' Operation
Specialized shipping and global trade software complements Speedline Technologies' slowing ERP system.
When you transport tens of thousands of line items to customers around the world, quick fixes take you only so far.
"Band-aids and bubblegum" is how Roger Clement, director of worldwide logistics at Speedline Technologies, Franklin, Mass., describes the workarounds his company employed in the past to make its IT systems meet its shipping needs.
Speedline manufactures capital equipment that electronics companies use to assemble printed circuit boards and semiconductor packaging. It operates two plants—in Franklin and Camdenton, Mo. It also uses contract manufacturers based in China and Malaysia to produce two of its high-volume, mid-range products.
Each year, the company ships approximately 2,000 of its machines to customers around the world. It also ships some 71,000 replacement parts, both to customers and to three strategically located spare parts hubs that serve different regions of the globe.
Speedline's enterprise resource planning (ERP) system—MFG/PRO from software vendor QAD, Santa Barbara, Calif.—"runs our company from quote to cash," Clement says. Until last year, that included Speedline's order fulfillment operation.
"MFG/PRO is a reasonable ERP solution," Clement says, "but unfortunately it's not robust enough to offer an efficient logistics process."
The biggest challenge lay in preparing shipments. Whether shipping a large piece of equipment, or preparing a small parcel shipment of spare parts, generating the electronic or paper documents involved too many steps and too much rekeying.
A parcel shipment, for example, required activity on two different workstations. "A customer order would typically require 165 keystrokes across the ERP system, with the logistics operator working in QAD as well as the UPS WorldShip system," Clement says.
For international shipments, creating a valid commercial invoice with all fields filled in correctly was also a labor-intensive process. Given enough resources, internal IT staff could have made MFG/PRO do just about anything.
"But we're a lean organization, and could not continue modifying the ERP system by putting band-aids on it," Clement says.
So last year, Speedline started shopping for a new logistics solution. It conducted a competitive bid, and in September 2005, chose TRAXi3 from Precision Software, which was recently acquired by QAD.
Precision, based in Dublin, Ireland, with U.S. offices in Chicago and Dallas, offers four TRAX modules: i3Ship for preparing shipments; i3Trade for managing international trade transactions; i3Comply for ensuring compliance with trade regulations; and i3Forward for managing a freight forwarding business.
Speedline has implemented i3Ship and i3Trade, starting with its U.S. sites in January 2006, and adding its Singapore office in March. Companies can implement TRAXi3 in any of three ways: as a client/server system; with a web-based interface; or as a "black box" that runs behind the scenes, performing functions for other applications.
Companies can also mix these implementation strategies, providing access to different users in different ways, according to Greg Lloyd, president of Precision Software.
The black box is a good choice for companies that want to add power or features to existing information systems. In this kind of deployment, TRAXi3 runs tightly integrated with the company's ERP, warehouse management system, or transportation management system, and users continue to interact with that system.
The web interface offers convenient access for users who don't utilize the system every day. "These users require less training, because of the system's intuitive look and feel," Lloyd says. The third option offers more bells and whistles. "For power users, the client/server deployment is a richer, more functionally deep solution," he says.
Five Orders, One Invoice
Speedline has implemented the client/server version of TRAXi3, with the client running on Microsoft Windows computers and the databases on Unix. The client machines exchange data with both the TRAXi3 and MFG/PRO servers.
During implementation, Speedline and Precision Software spent much of their time developing the additional functionality that Speedline wanted. One new function, for example, consolidates multiple requests that arrive from the same customer or distributor on the same day.
"With the old process, one order equaled one invoice," Clement says. With TRAX, when a distributor submits five purchase orders at different times during one day, the software automatically combines them to create one commercial invoice and shipment.
To prepare a package shipment using TRAXi3, the operator pulls up the order, and information on how to ship it—as defined by the customer and customer service rep and imported from MFG/PRO—appears on the screen.
The TRAX system electronically links to UPS, FedEx, and DHL, eliminating the need to use their proprietary shipping systems, which run on dedicated computers.
Say the customer and rep choose UPS Ground service. "We calculate and rate the order through TRAX," Clements explains. "Labels are generated just as if we were using the UPS terminal. And much of the data—from line item detail to the value—is already in the system, fed over from MFG/PRO."
Through its interface with UPS, TRAX "reads and calculates the zone and weight, prints the label, and feeds back the freight charges, so the logistics operator can close the order," Clements says.
TRAX then sends shipment data—such as the tracking number and freight charges—to MFG/PRO.
TRAXi3 also screens for orders with special requirements. For example, "international shipments valued at more than $2,500 require Automated Export System (AES) authorization," Clement says. The operator cannot proceed without taking care of that detail.
Speedline has not asked Precision Software for interfaces to the carriers that transport its large equipment. But TRAX automatically generates the necessary paper documents, such as the commercial invoice, packing list, and bill of lading, needed to ship with a domestic van line or freight forwarder.
For global shippers, TRAXi3 maintains rate information and offers electronic connections to carriers serving Europe, Asia Pacific, and North America.
"Many companies find value in shopping rates across multiple carriers in multiple regions," Lloyd says. A company that ships from more than one region can support all those operations with a single implementation.
One big benefit Speedline has gained from TRAXi3 is greater efficiency. Remember the 165 keystrokes on two computers an operator needed to prepare a small-package shipment?
"It now takes 80 keystrokes to get that same customer order out using TRAX. That's a 52 percent improvement," Clement notes.
TRAX has also reduced errors by enforcing greater discipline in Speedline's logistics processes. "We set up hard parameters and criteria for orders to flow downstream and interface with TRAX," Clement says. TRAX flags orders containing invalid data or lacking required information.
In addition, TRAXi3 generates reports about Speedline's fulfillment operation and lets managers see, in real time, what demands customers are placing on the supply chain. That information helps Speedline deploy staff more effectively.
Officials at Speedline plan to enhance their TRAXi3 deployment in another way—by streamlining electronic transmissions to AES.
Today, "an operator has to key a lot of redundant information into an AES web site, wait for approval, and execute the order," Clement says. Soon, the operator will transmit data to AES from TRAX without leaving that system or rekeying.
"As our procurement model changes, and our supply chain grows more complex, TRAX could become a full-service logistics tool, delivering benefits up and down our supply/demand chain," Clement notes.