Case Study - Systems Integration
A well-known UK publishing company, that specialises in editing and producing journals, makes extensive use of outsourced services for their inventory management and distribution. After a review of their business operations they recognised that significant cost savings could be made, with no reductions in service levels, if the distribution operation could be better integrated.
After the management team had decided on the new business policies and practices the Technology Director invited Project Consultancy to manage the programme for their implementation. This involved working with the publishers' professional staff, their IT department and the outside services providers to:
- Activate the new policies
- Introduce and activate new business practices and processes
- Implement the new and upgraded IT systems to support the business processes
- Negotiate new Service Level Agreements with existing suppliers
- Negotiate improved freight rates from carrier companies
To minimise costs and the risk to the business, the programme was broken down into a number of delimited projects that could be prioritised and delivered in a sequence. These projects included:
- Integration of the publisher's Sales and the distributor's Warehouse Management computer systems.
- Inventory Management: where there had been concerns over what stock levels should be held by the inventory management and distribution company, to meet the service level agreements, and how to manage stock for back orders.
- Introduction of a single product coding structure to replace the multiplicity that existed and enable a more efficient use of the warehouse processes.
- Sortation: where the inventory management and distribution company did not have a system to enable them to distribute items in the most economic way.
- Insert management system to manage and control the inclusion of 'Inserts' in journals' packaging; reducing packaging time and costs by ensuring they are only sent to targeted subscribers.
- Self-billing: The distributor sent hundreds of detailed invoices each month to the publisher incurring very high processing costs for both parties. A new computer system captures all transactions passed to the distributor from which they calculate their own bill.
- Forecasting & Reporting to give suppliers and the distributor the production demand over the coming periods allowing them to optimise their own resources.
- Global Conference & Exhibition Management system to manage the administration of all activities for conferences and exhibitions from attendees to journal samples.
- Promotional Items Management: The inventory management and distribution company also handle 'promotional items' but had no formal method for doing this. To efficiently manage these they needed to be identified and included in the new systems.
The programme lasted eighteen months and has resulted in significant savings through lower freight costs, reduced stockholding and storage costs and the removal of paper invoices. The new business processes and tighter integration of systems is providing more comprehensive planning information and improved management control of products.
The main challenges came as a result of the breadth and complexity of the programme but the critical ones were primarily related to people and change issues. In particular these were:
- Influencing many departments to change their established processes and procedures.
- Gaining acceptance of the need to standardise across departments.
- Enabling effective co-operation of both internal and external resources.
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