No business wants to deal with botched orders. But relying on pen, paper, faxes, and phone calls to fill customer orders and track inventory opens the door to errors. Worse, there's no way to discover those errors until a customer receives the wrong product.
"The lion's share of our business is made-to-order based on what the customer requests," says Tony Eder, manager of eCommerce at Rainier Industries—a manufacturer of custom shades, awnings, and tents. "Everything has to be precise."
Leveraging automation and big data can streamline your supply chain beyond the factory floor.
If a customer orders a 10-by-22-foot awning but receives a 10-by-25-foot awning because someone made a mistake, that error creates delays and extra costs. The customer may even shop elsewhere next time.
“When something went wrong—a typo or any kind of error—our paper system meant we did not discover the problem until the product arrived on the customer's doorstep and the customer called and said, 'This is not what I ordered,'" Eder says.
Initiating a digital transformation makes the difference. As Rainier Industries discovered, leveraging automation and big data can streamline your supply chain beyond the factory floor. But the amount of data gained from new Industry 4.0 technology doesn't matter nearly as much as what you do with it.
In 2017, about half of all companies had adopted some kind of big data analytics. Two years later, 62% of companies reported achieving measurable results from investing in analytics for big data.
Some companies focus on digital transformation only on their shop floor. But others are going for a bottom-up process and transforming their entire supply chains—from vendors to customers. These companies can pivot nimbly in the face of changing market conditions.
Based in Tukwila, Washington, Rainier Industries is seeing benefits all along its supply chain since switching to an automated enterprise resource planning (ERP) system in 2015. The system automatically tracks and manages orders, new customers, inventory, invoices, and trends. Rainier has improved its inventory accuracy from about 70% to about 95%.
“Now, we know what we have on the floor and have inventory to match what we actually need," says Rainier CFO Chris Inverso. “Before, the only way to know what we had was to go out and hand count it every month."
Inverso describes Rainier's earlier process as a relay team—employees had to “pass the baton.” For example, sales had to pass it on to purchasing, who had to pass it on to manufacturing, who passed it to accounting, before finally handing it off to shipping.
Every time workers entered data manually, there was another opportunity for errors and delays. Often, those errors were not discovered until the customer received the wrong product.
“Now, the baton is being passed automatically—as opposed to getting dropped, forgotten, or even the wrong baton being passed," Inverso says.
With the new ERP, lead times from quotes to cash have decreased by 20%. Even more important than shorter lead times, Rainier can now accurately forecast those lead times.
“We've been able to better know what we need and when we need it," Inverso says. “We can adjust expectations with customers and order inventory exactly when we need it, so it shows up just in time."
As soon as Rainier Industries adds a new customer, the system adds that customer to the database. The new customer can order online with an accurate estimate of when their custom order will arrive.
“The end user is empowered to place an order, or if they need approval, they can build a shopping cart, see how much it will cost, and seek approval," Eder says.
Based on customer requests, Rainier Industries can grant different levels of access to customer employees within the system.
The automated system generates emails that let customers know their order is in production, when that order will ship, and when it will arrive.
“We've empowered the end user. What we have is what they see. They have full transparency of everything going on with their order," Eder says. “Savvy online shoppers want the best price, want the best quote on shipping, want to know what's going on. That's the expectation now. Amazon has set the bar."
“Once you get used to using our website, you get spoiled and keep buying from us," he says.
Outside the manufacturing plant, Rainier is seeing actionable insights. The company also has improved communication and relationships with suppliers and customers.
Rainier Industries may purchase the same component from a handful of vendors—maybe even 50 different suppliers at varying prices, quality, and other terms. With the insights gained from big data, Rainier can analyze that information and negotiate more effectively. The company also can use the information to decide which suppliers to do business with.
“Without that data, it was difficult to negotiate," Inverso says. “You're a lot more leveraged with this software. You can do a lot more with less."
Now, when the company secures an order for an awning, the ERP automatically analyzes what's needed to make that awning. “The system says, 'You need to generate an order for these part numbers, and this is when you're going to need the parts,'" Inverso says.
With the paper system, “We might miss a component that was critical to the process and didn't get ordered," Inverso says. “The product was on hold until we got the item. Or, we would order too much of something. That's cash in little bundles sitting on your shelves."
Rainier Industries' suppliers—especially those without similar big data analytics—appreciate the additional insight.
“Some of our customers don't have the same digital systems we do," Inverso says. “We are able to tell them they ordered this many widgets from us and this many arrived on time. They have expressed pleasure in the amount of data we've been able to provide about what we're making for them. We can generate a report at any time. Some of our larger customers appreciate the level of detail we can give them. The information helps our customers make better decisions."
Rainier Industries can also tell its vendors whether vendor employees are following vendor protocols in making orders.
“Part of appreciating our customers is understanding the challenges they face," Inverso says. “We can go back and say, '60% of the time, your people are submitting handwritten orders vs. 40% of the time buying things out of the catalog. We can even push it down to individual stores or managers making those decisions."
The automated ERP system helped Rainier Industries add a retail line of customizable yurts.
“Nowhere else online will you find a tool allowing you to pick your exterior color, choose window and door placement, and check out," Eder says. "It's a powerful tool that gets a lot of users curious. They have fun configuring a yurt on their mobile device or desktop."
The mind shift that began in 2015 continues.
“We continue to learn as we move forward," Eder says.
