ADP: Tying a WMS to suppliers

Bob Trebilcock -- Modern Materials Handling, 9/1/2004

ADP Investor Communication Services, a division of Automatic Data Processing's Brokerage Services Group, is one user gaining efficiencies in its facilities and supply chain by broadening the reach of its WMS.

ADP processes and distributes more than 800 million documents to investors world-wide each year. Making sure that ADP has the envelopes, poly wrap and other commodity items in the warehouse that are required to fill an order is crucial to an efficient operation.

"When we are not in an out-of stock position in the warehouse, we can manufacture without interruption. That means we gain efficiency," says Cliff Heney, ADP's senior director of materials/logistics.

The solution is a supplier execution enablement application (HighJump Software, 952-947-4088) that ties together ADP's WMS and procurement solution with its suppliers. The solution allows ADP to view its suppliers' inventory levels before placing an order for any of the 1,000 commodity items used during the manufacturing process. It ensures that labels are created with the right data and in the right format for efficient receiving. The system also provides advance notification when orders are on the truck and ready for delivery as it speeds the reconciliation and supplier payment process after goods receipt.

There have been numerous benefits since implementing the system last spring. "You really can't manually manage 1,000 different commodities effectively," says Heney. "Now that we have visibility into our vendors' inventory, we can order in quantities that maximize shipments and know that we're going to get the product we need and with the right labels. That streamlines receiving, cuts down on labor and increases our quality. Our unit costs to manufacture have definitely come down since we implemented the system."

The process begins at the re-order point for an item. Minimum and maximum inventory levels are monitored by the WMS. Each day, information about the items that need to be re-ordered is passed on to the system, as well as to Ariba, ADP’s procurement solution.

Purchasing can then check inventory levels at each of the vendors who supply those products through the supplier portal to determine the best way to place an order. While ADP has integrated the new system with the systems of a select group of suppliers, most vendors manually enter inventory information into the system for now.

Once an order has been placed, all the information to create shipping labels is available to suppliers through the solution. That information is also used to create an advance shipment notification (ASN) once an order is on the truck and ready for delivery.

When an order is received against the ASN at the receiving dock, the WMS updates the supplier enablement program to remove that inventory from stock. It also updates Ariba to initiate the payment process.

Now that the system is up and running, Heney says the next step is to do more direct interfacing with ADP's suppliers. "We're looking for even more efficiencies from the system," he says.