Henry William Smith had a great idea! A newspaper distribution warehouse, using a fleet of small carts and fast horses to collect the daily papers and then transporting them to stagecoach stops he could get them to readers twelve hours faster than the traditional overnight rail coach – thereby outrunning his competitors. Later William realised the potential of providing retail to rail travellers. He set up bookstalls by the stations, which in turn diversified and resulted in widespread retail stores. This all happened at the very end of the 18th century, and resulted in the formation of the WHSmith Group.
200 years later almost everything has changed in the news distribution industry. Except one thing: It was still all about speed. With more than 99 percent of its newspaper products subject to sale or return, it is essential that accurate and timely information can be processed by its systems to enable the organisation to optimise the planning and forecasting in order to minimise waste. These days a key part of Smiths News PLC’s business is handling a wide variety of information to and from the publishers and retailers. It includes EPoS data (electronic Point-of-Sales), sales performance figures and reports covering its key performance indicators. In total, the company has around 400 different variants of messages which need to be integrated between its own systems and its customers.
Consolidation using SAP NetWeaver Exchange Infrastructure
Until 2004, data files moving in and out of Smiths News were handled using a variety of software solutions. However, with the growing demands of customers, like the supermarket giant ASDA, to significantly reduce costs by moving away from transferring files via a Value Added Network (VAN) to less expensive, yet still secure, message transfer protocols such as AS2, the company had to look to upgrade its business integration capabilities. Chris Gibbons, Smiths News NewsWorks General Manager, explains, “The software we were using was simply not able to take advantage of the latest messaging standards, like AS2. We then had the decision to upgrade the system or to look at alternative solutions. We decided to look at other options and carried out an exhaustive review of many of the available products on the market.”
Smith News decided to adopt SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) because SAP technology had become core for all of the company’s ERP processes in 1999. That’s why Smiths News believed SAP NetWeaver XI and its integration in the existing SAP ERP solution would be a perfect fit. Gibbons continues, “SAP NetWeaver XI provides excellent capabilities to be individually enhanced with a comprehensive suite of EDI adapters our business required and we decided to take advantage of SAP’s partnership with Seeburger to benefit from the specific enhancement we needed.” With the help of the Seeburgers XI Adaptors Smiths News developed B-to-B adapters which complete the SAP NetWeaver XI offering.
EDI and AS2
Seeburger initially provided the capability to allow Smiths News to share valuable EPoS information with ASDA via the data transport specification AS2. It then helped to deliver additional adapters for electronic data exchange (EDI) that allow similar integration with other major retailers, including Sainsbury and TESCO. The EDI and AS2 adapters enable Smiths News’ customers to save more than 70,000 Euros each, per year, in VAN costs and help ensure that Smiths News maintains its position as a key supplier to major retailers.
Gibbons continues: “As the UK’s foremost news wholesaler, we require robust information systems that support our activities, link all of our sites and gather and manage huge quantities of customer data. With SAP NetWeaver XI enriched with B-to-B adapters from Seeburger, the information we can offer our customers gives them an overview of the news business that is the best in our industry.”
Smiths News is steadily replacing its existing EDI and messaging software by ensuring all new messages are mapped in SAP NetWeaver XI.
Benefits from electronic invoicing
More recently, Smiths News has worked with Seeburger to deliver an electronic invoicing solution also integrated in SAP NetWeaver XI. Gibbons explains, “The sheer quantity of paper we use in our current invoicing processes is truly staggering. We have to send individual invoices to retail outlets, with an average of 400 lines on each, and then have to send a consolidated invoice to that retailer’s head office.”
For larger retailers Smiths News produces up to 2,500 pages of invoices in one week. By transferring this to a single electronic invoice the company has saved a staggering amount in paper and printing costs alone. However, the true benefit of electronic invoicing is to Smiths News’ customers. The increased accuracy it generates and the ease with which the invoice can move through the processing workflow significantly reduces their processing costs.
Accuracy is significantly increased because invoices no longer need to be re-keyed manually and overall there is a much greater chance of the invoice moving through to electronic remittance without complication. Data transferred across a VAN costs about 480 Euros per ten MB of data, for Smiths News, and the invoicing function alone used to require around six MB of information to be transferred each week per major multiple. “Not only are we now saving these costs, which amounts to some 111,000 Euros per year, but we are also allowing our customers to reduce costs by allowing remittance advices and other messages to also be delivered via AS2.”
ROI within a year
The solution is said to be unique in this market in terms of what it can deliver for customers. It enables more functionality and services, such as sales based replenishment and vendor managed inventory, which improves efficiency, productivity and profitability for retailers. Gibbons declares, “Seeburger and SAP NetWeaver XI is helping us to deliver messages more quickly and more accurately than our competitors, giving us much better sales forecasting information and saving us huge data administration costs. The solution allows us to take significant costs out of our own and our partners business, which helps us to create a very high level of loyalty with these partners. We are also able to improve customer service with no cost to us.”
The value of the increased EPoS data that Smiths News can now collect is immeasurable. The company is now able to validate exactly how many publications have been sold or returned and to share this information with the retailers and the publishers. “The solution allows us to receive EPoS data in any format and convert it into a format that we can share with our partners. This ensures every member of the supply chain has access to key information that helps them increase efficiency and drive profitability,” adds Gibbons. He concludes, “The very nature of our business means we are not going to spend money on IT systems unless there are considerable savings to be made. We estimated that the solution we built will have an ROI of just over a year and will continue to make huge savings thereafter. It is an excellent, highly complex solution that meets no less than today’s highly complex requirements.”