Digital Transformation Project : Secrid and DZB
In this project we wanted to improve the supply chain process of two partnering companies. The first company Secrid makes innovative wallets that include an aluminum Cardprotector and optional leather or plastic casing. For strategic and social reasons, the wallets are completely made in The Netherlands. Secrid has designed their supply chain in a best of breed mentality. Finished leather is bought at a couple of specialist companies. The sheets of leather are transported to a specialized leather cutting company. The cut pieces of leather are then stitched together at another company in Schiedam. The stitched leather and all other materials (that might follow a similar multi-step supply chain) are transferred to DZB, a social workplace in Leiden. DZB assembles the materials to endproducts and transfer them to the Secrid Warehouse in Den Haag.
Current role of IT
The current role of IT in the cooperation of Secrid and DZB is a very basic information exchange. The current use of information sharing between Secrid and DZB seems to be sensitive for mistakes. A lot of proceedings has to be done twice, once by an employee of DZB and once by an employee of Secrid. So the system isn’t very efficient for both parties. The system whereby both parties have to keep record of the inventory levels is somehow logical, due to Secrid’s economical ownership of the assembly parts, but it’s also redundant and ambiguous. The responsibility for keeping sufficient assembly materials at DZB’s storage room is spread over both parties. Which could result in arguments about when to order new supplies, because at Secrid there’s no certainty about the inventory levels. This can result in stockouts, production stops and late deliveries. Moreover, it’s hard to successfully manage the supply chain in this case, because of the spreaded responsibility.
In conclusion we can determine that: the current system is inefficient, time-consuming, ambiguous, prone to errors and costly.
Recommendations / solutions
The first small form of integration that can be implemented with approximately a week of work is letting DZB get direct insight in the digital stock of Secrid in NetSuite. The costs and benefits of this implementation are relatively low. Furthermore, it will only affect the daily workflow of two DZB employees. By letting DZB spectate in NetSuite, DZB will get used to the interface of NetSuite which is of great benefit in later stages where more complex interaction might be required.
The second step in the implementation is to automate a small part of the order processing flow between DZB and Secrid. We have evaluated that the benefits of automating the flow that occurs when Secrid places an order at DZB outweigh the costs of implementing the solution. We recommend using the CSV interaction to test how both systems handle (semi) automatisation of information streams. Another reason for implementing this solution is that the change is not irreversible. If because of some technical or human error the link stops working, the orders can always be placed manually for the period when the link is down. It is critical that all exceptions to the usual flow of orders are mapped. What needs to happen when the initial order from Secrid was wrong is one of the questions that need to be answered. When the critical exceptions have been mapped and the scripts have been written, the challenge in terms of change management starts. Stakeholders in both companies have to be identified and informed about the changes. When the pilot is run, the process will have to be closely monitored. Automatisation, however small the changes, is always tricky and it will cost time to monitor the situation in the first weeks and solve problems.
For solving the full problem of duplicate administration and inaccurate stock we proposed two solutions. As a first option, DZB keeps working in MS Dynamics, but information about order statusses is synced nightly between DZB and Secrid. The second option is that DZB will start using NetSuite to make changes in order status directly in the system of Secrid.