Communicating in Real Time

SonicAir, Sequent Computer's logistics-services provider, now receives order information faster and more accurately.

By Francis J Quinn -- Logistics Management, 1/1/1998

Supply-chain management is as much about communicating information as it is about hauling freight. Information that is inaccurate, garbled, or delayed can be every bit as damaging to a shipper as a missed pickup or an Interstate-closing blizzard. But, unlike the weather, companies can do something about the state of their communications capabilities.

Sequent Computer Systems Inc., a leading provider of "data-center ready" open systems, recognizes the importance of communications to supply-chain management and continually strives to upgrade its capabilities in this area. This is evident in the initiative launched in conjunction with SonicAir, one of its key logistics service providers. Basically, it's a real-time, interactive electronic data interchange (EDI) program that allows Sequent and SonicAir to instantly communicate order and inventory information.

From its Louisville, Ky., hub, SonicAir handles the delivery of spare parts and replacement parts to Sequent customers. SonicAir also handles the movement of defective parts to vendors for repair.

Sequent had being using E-mail (often supplemented by telephone calls) to communicate order information to SonicAir. But that approach was not providing the desired level of immediacy or accuracy. "So we decided to create our own EDI interface and include vital information that was specific to our business," recalls Dave Addison, a materials analyst for Sequent. The company created an interface using SonicAir's EDI standard that enabled it to instantly generate, transmit, and receive orders and messages to and from SonicAir. Unlike the traditional batch-type EDI, this is a real-time interface.

The communications system developed between the two companies is simple and straightforward. When a Sequent customer requires a part, an order is generated identifying the part number, quantity, and customer information. The order then is electronically transmitted to the SonicAir facility in Louisville, and a confirmation is posted acknowledging the transmission. A dispatcher receives the order within a few minutes and sends back an order acceptance. SonicAir then ships the order and sends confirmation of delivery to Sequent upon customer receipt.

"EDI cuts down on paperwork and eliminates the need to repetitively input the order information," says Addison. "The human-error factor diminishes and the ordering process accelerates."

Sequent's inventory-management software keeps track of the parts being taken out of stock and automatically generates an order via EDI for replenishment. Similarly, when a part that has been returned to the Louisville hub is ready for repair, an EDI order is sent specifying which vendor location should receive that part for repairs. Sequent receives confirmation electronically when a part is restocked or a defective part is shipped for repair. Typically, no phone calls or faxes take place during the process; it's all done electronically.

By striving for communications excellence through real-time EDI, Sequent Computer Systems has realized a number of important benefits. Order information now is transmitted instantly and accurately, free from human intervention. Customer response time has improved thanks to the immediate interaction. And Sequent now enjoys an accurate inventory overview for both outgoing parts and parts coming in for repair.

Company: Sequent Computer Systems

Challenge: How to communicate order information quickly, clearly, and accurately

Solution: Real-time EDI

Payback: Faster response time, more accurate orders, tighter inventory control