Olga Soboleva, GS1 Russia

Over the course of the past 2-3 years, the Russian retail and FMCG market has seen a significant increase in the use of electronic data interchange (eCom). The number of trading partners implementing eCom technologies in their business applications is constantly growing. This positive change was partly brought about by foreign retailers, who arrived on the Russian market and faced the problem of little to zero eCom experience in Russia.

In order to support their initiative, GS1 Russia, in cooperation with ECR-Rus, launched a project aimed at making eCom services accessible on the local market. As a result, over 2,000 trading partners currently use EANCOM messages and the network continues to growinvolving further companies.

As an example, we would like to present the business case of a Russian retailer Bananamama specializing in goods for babies and children.

As of today, Bananamama has 85 stores and 8 branches, 50,000 trade items in stock, 600 domestic and 50 foreign suppliers, and a Joint distribution center handling up to 1,500 incoming invoces per day.

Technical development and further improvement of all business processes is a constant priority for the company management. That is why Bananamama has implemented eCom (messages are transferred via eCom provider, Korus Consulting Company). Efficient cooperation between suppliers and retailers requires a high level of commitment, and eCom enables both parties to comply with the following commitments:

• order lead time;

• master data accuracy;

• efficient settlement of disputes.

The project envisages the use of the following eCom technology schema:

Purchase Order – Purchase Order Response –Delivery Schedule – Invoice – Debit CreComt Advice.

So far, only three of these messages are being implemented:

1. Purchase order

2. Purchase order response

3. Invoice

The system is being used by over 200 Russian suppliers. Even though only one third of all trading partners are involved, eCom technology has allowed Bananamama to achieve the following results:

• 95% reduction in the time required to submit a purchase order (a purchase order is transmitted automatically to the supplier with just one click);

• 100% elimination of errors in the submission of purchase orders (purchase order status is monitored online);

• 100% elimination of errors in purchase orders and purchase order responses.

• Ability to quickly take appropriate action following the purchase order response (change of delivery date, order incomplete in either range or volume, rejected delivery, etc.).

• Reduction in the time spent on processing documents upon delivery. (The supplier sends its invoice to Bananamama in advance in accordance with an agreed schedule.

• This allows for preliminary checking and comparing between the purchase order and the invoice for matching the prices, range, volume and bar codes, which saves time spent on these procedures at the moment of actual delivery).

Prior to ECOM implementation, Bananamama managers sent orders either by fax or by e-mail, which meant spending time on printing on letterhead, establishing fax connection, transmitting, waiting for transmission confirmation, etc., or converting the purchase order into the format appropriate for e-mail transmission, processing and sending by e-mail.

With the daily volume of 3,000 purchase orders, this work required 25 full-time managers in the 8 branches.

The ECOM project is expected to help the company achieve the following goals:

• Reducing to minimum the time spent on sending purchase orders to suppliers and eliminating errors;

• Purchase order response – elimination of out-of-stocks and penalties to suppliers for incomplete delivery;

• Advance invoices – reducing the time spent on paperwork at the receipt of goods and timely resolution of disputes with suppliers;

• Web schedule of delivery – eliminating the need for a supplier to spend time on registering for delivery by telephone, and enabling Bananamama to carry out efficient resource planning for the future.

• Debit Credit Advice – enabling timely receipt by the supplier of delivery confirmation documents, reducing to minimum the time required for Bananamama to process incoming documents, and enabling both parties to quickly resolve disputes.

• The experience of Bananamama has proven that for any big company ECOM is a convenient tool that can help resolve the basic issue of saving time and human resources.

In its long-range planning process, Bananamama has put its bets on ECOM, and today the company is certain that it has made the right choice, because ECOM is the business solution to increase the efficiency of distribution, logistics, finances and retail.