Company Description
A large manufacturer of eyeglass frames and accessories experiencing high growth and escalating costs.
Summary
The true value of a solution and its perceived cost don't always match up. This was the case for a large eyewear manufacturer that experienced double digit growth year over year since their inception. In their case, a low cost of entry for an EDI and shipping solution ended up costing them far more than ongoing fees. Today using vSync EDI and vShip they have achieved an ROI on their investment, reduced charge backs, accelerated the shipping process and improved efficiency across the entire order-to-cash process.
Key EDI and Shipping Issues
Four years ago, the company was faced with implementing an EDI solution for Microsoft Dynamics GP. At the time they had 13 EDI trading partners, many of which required Advance Ship Notices (ASNs). They evaluated vSync EDI and another very popular web-based EDI solution. They chose web-based EDI solution over vSync EDI and Shipping solutions because the provider's entry price was roughly $7,000 cheaper. All mapping costs were covered in their $500 per month service fees. Their monthly VAN charges were $34.95 per month which included up to 50 transactions with up to 30 lines each and applied overage fees of .03 cents per line and .40 cents per document. The solution claimed to do everything the company needed - including ASNs.
Within one year they added 6 additional EDI trading partners. As their ASN requirements escalated, their productivity plummeted. The manual entry required to process Advance Ship Notices was taking 4 hours per day. Charge-backs were mounting because ASNs often arrived after the customer's shipment was delivered.
The largest area of concern however, was that the shipping process was disconnected from the EDI solution and Microsoft Dynamics GP. The company used three disparate systems for outbound shipping in which only the small parcel consolidated shipping system was integrated with Microsoft Dynamics GP. The second system printed UCC-128 labels while yet another disparate system was used to create ASNs.
All sales orders from Microsoft Dynamics GP were printed using Crystal Reports and then converted to an Access database. This database would provide the line items needed for packing each order to the warehouse. Employees would hand key packing details into this database which often included errors and slowed down the shipping process. Each product was packaged in its own box so manual counts were required to enter the product quantities shipped into the Access database. With no integration to Microsoft Dynamics GP the line item data and associated container details from the Access database would then be manually entered into the EDI provider’s ASN solution.
Acquiring new EDI customers was proving that the EDI solution with lowest initial cost was not really the cheapest solution in the long run. As their EDI volume soared the company went over and above 50 transactions each month. Each transaction contained many more line items than 30-line allotment resulting in overage fees. Combined with the charge-back fees they were receiving for late ASNs and the associated costs of manual entry and shipping delays the company found themselves paying far more than they signed off on a year ago. Fed up with poor customer service and escalating costs the company decided that they needed an EDI vendor that could streamline their EDI processing with a cost effective solution.
Problem Resolution & Results
In one year the company came back to take another look at vSync. After a detailed cost analysis they found that purchasing vSync EDI and vShip would not only tie the shipping process to their EDI needs, but would provide additional savings and a more cost effective total cost of ownership.
Using vShip, the company replaced the existing shipping system and the system used to generate UCC-128 labels as well as the Access/ASN database. Replacing these systems with vShip removed inefficiencies that these non-integrated systems created.
With their new consolidated solution, all orders from Microsoft Dynamics are delivered electronically to vShip which resides on the warehouse floor. Warehouse operators pull up orders ready for processing and using an electronic scanner, scan each product as it is packed. vShip is smart enough to know when errors are made by checking weight tolerances and quantities scanned. This immediate alert enables shipments to be fixed on the spot, greatly reducing returns, chargeback fees and customer issues.
Manual entry of ASNs was eliminated as vShip automatically collects item and container details and generates the Advance Ship Notice. Automated ASN generation eliminated 4 hours of manual entry each day and drastically reduced the charge-backs the company was receiving associated with late ASNs. All shipping details including ASN data are written back to Microsoft Dynamics GP so that employees can quickly assist customers with order inquiries.
Finally, vSync solutions kept their EDI transmission fees in check and eliminated the overage fees they were paying. Configurable business rules in the vSync EDI solution enabled exception management of EDI orders freeing up much needed time of customer service employees who previously had to check each EDI record that was imported into the system.
The company is still experiencing phenomenal growth and is trading with more than 30 trading partners. Their vSync solutions provided an ROI within 18 months and today their expenses for EDI are far less than the $20,000 per year they were paying using their previous solution.