This should achieve 20 percent re
duction in inventory costs, 10 percent cost reduction in order processing and fulfillment – while improving delivery times and reducing costs to customers, says New Zealand general manager, Brian Kerr.
“This is major ?next step’ for us in creating sophisticated supply chain electronically linking our customers’ customer to our suppliers’ supplier,” Kerr says.
Redeal Logistics specialises in the telecommunications industry, supplying wide range of electrical, data and telecommunications products, including cables, switching equipment, connectors, duct pipe and fibre optics.
Customers include Telecom New Zealand, Clear Communications, Telstra Saturn, and contractors employed by these three major telecommunications companies. Annual turnover for the division is around $30 million.Redeal Logistics is division of Redeal, which is the New Zealand operating arm of the worldwide Rexel Group.
Listed on the Paris Bourse, the Rexel Group is the world’s largest distributor of data, electrical and communications products, with revenues of $NZ11.24 billion. In New Zealand Redeal has 500 staff and annual turnover of more than $250 million
The Business Challenges
In fast-changing, deregulated telecommunications market, margins are under pressure, and costs (in the handling, warehousing and supply of large number of different products, many of relatively low value, and involving high number of transactions) are difficult to control. So the business challenge is to move to the next level in the supply chain, building an online environment which includes customers and suppliers in single system. This includes reducing costs and improving delivery times.
Although it already operates at 24-hour turnaround times, Redeal wants to reduce this to four hours anywhere in the country – getting efficiencies from central distribution centre in Auckland and 13 satellite distribution centres around the country. “A big part of this is having the stock in our warehouse when the customer needs it. Suppliers need to see what our demand patterns are so they can be proactive – resupplying our warehouses in timely fashion, without direct orders from us,” says business development manager, Darrin Hughes.
“We need to work with our customers in the same way. The telcos are looking to us to understand their supply cycles and maintenance routines – and make sure we have the right products available at the right time.”
Technology solution
Evaluating software platforms to deliver on its strategy began last year and included review of the existing ?wall-to-wall’ SAP solution used for financials, logistics, sales and distribution, and materials and warehouse management. The SAP R/3 system was ?inherited’ when Redeal purchased the component and product supply business from Telecom in 1999, following the restructuring of Telecom’s Networks Group.
Redeal wanted to restore the existing SAP system to less-customised, lower-maintenance, standardised version, while at the same time enhancing the existing functionality with business-to-business e-commerce capability to support the ?next step’ business strategy. “The key decision was whether we looked for third party e-commerce product which we integrated with SAP or we looked at further investment in our existing system,” says Hughes.
“We decided that upgrading to SAP’s new mySAP.com software was the best solution. This gives us the e-commerce capability we want. It also offers sophisticated customer relationship management (CRM) and supply chain planning and management. Plus it’s fully integrated solution which offers significantly lower maintenance costs.
“The deciding factors were that SAP is also used by significant number of our existing customers, including Telecom and Telstra Saturn – making integration less of an issue.” The CRM module of mySAP.com will merge the multiple channels between Redeal and its customers into single online environment, accessed directly online, via call centre, or with field representative. SAP’s mySAP.com business to business software will be used for setting up online catalogues with online ordering.
Internet ?on ramps’ will enable Redeal’s customers and partners to ?bolt on’ their own e-commerce systems, accommodating non-SAP systems such as those from Arriba, Commerce One or Oracle. SAP’s business warehouse module will enable capturing and analysing data such as customer spend patterns. Call centre operators will have real time view of all of customer’s spending patterns, and can have much more highly informed interaction.
