A large German multinational and Sandvik Coromant spent a couple minutes on each side of the fax machine placing and receiving orders. With around a thousand orders per month the amount of time consumed was a distraction. E-commerce eliminated the logistics bottleneck.
The multinational, with a turnover of around 11 billion euros, manufactures high-precision bearings suitable for almost any type of machinery or mechanical equipment that requires them. Its primary customers are in the automotive, rail and aerospace industries. Employing more than 75,000 people around the world, the company is a customer of Sandvik Coromant cutting tools with high order volumes.
Apart from production sites in France, Italy and Spain, the multinational has significant manufacturing capacity in Slovakia and Hungary, from which thousands of orders came annually. Sandvik Coromant saw the opportunity to make major change. Marketing Manager Greta Ninova, recalls:
“For a large customer such as this prompt and accurate order entry is essential. Entering large volumes on our side as well as on theirs was a challenge, particularly at peak time.”
Over a period of months, Sandvik Coromant broached the idea of electronic ordering. “When we had face-to-face meetings with the customer we discussed the idea of starting e-commerce,” Ninova says. “We are continually updating our EDI (electronic data interchange) and e-commerce know-how, and it was clear that having multiple sites and large order volumes, The multinational would benefit from this approach.”
A smooth procedure
In the beginning there was some hesitation to start the project, largely because of the time needed to harmonize procurement routines throughout the group. This all changed when The multinational entered into an agreement with a company providing a Web-based supply chain management platform. Things moved quickly after that. The first step began with a harmonization of the Sandvik Coromant product data held by the customer. This reduced rejections of electronic orders due to data integration problems. Secondly, the two companies established communication protocols.
There was concern that the registration procedure across three markets would be problematic, but IT solved the problem without burdening the customer.
“E-commerce increases our customers’ profitability by reducing their administrative workload and we have time to discuss their strategic ambitions and minimize errors – great for everyone.”
The process began in September 2012, and by the end of November electronic orders began to flow directly into the system. “At two minutes per order line and 1,000 order lines per month, that’s a lot of time we can now use to deepen our relationship with the multinational.” Ninova says.
“Given the experience that we have as consumers with online purchasing, the logic of e-commerce solutions is undeniable even in industries where purchasing traditionally went through other channels,” she adds.
The success in Slovakia and Hungary has given the customer the opportunity to extend the e-commerce solution to other manufacturing sites.
“E-commerce increases our customers’ profitability by reducing their administrative workload and we have time to discuss their strategic ambitions and minimize errors – great for everyone,” Ninova concludes.