Supply Chain Digest turns three this week! In the third week of September 2003, we launched our first on-line issue, featuring my thoughts “The Sorry State of ASNs”. Then last year on this date, I opined on “The Still Sorry State of ASNs.”
In each case, my point was simple. There is tremendous value in receiving advanced ship notices (ASNs). Combined with all the tools we have available today to make them happen, the use of ASNs in our supply chains should be a lot more prevalent.
As I wrote in 2003, more than a decade after the introduction of EDI and the electronic ASN concept, I was “still amazed at the number of companies, including major corporations, that aren't getting ASN's even from their own plants into DCs, let alone from outside suppliers.”
Last year, I looked at this again. Regarding the intra-company issue, I wrote that, “a project to get ASNs and labeling capabilities in the plant would have a huge ROI from a total supply chain perspective. Yet it doesn’t happen: cost in one part of the supply chain, with the benefit in the other; always other higher priorities; a reluctance to fuss with anything in the manufacturing process.”
I am bringing it up again, because as I looked back on a number of supply chain stories and themes we covered during the last year, ASNs seem finally to making some real progress.
The tools have been there for a number of years now. Yes, EDI is hard, but there are now so many ways to do ASNs over the internet…. Virtually every supply chain software provider has web-based tools to enable suppliers to create ASNs. Maybe accuracy is the issue, as one reader noted last year (see below), but I don’t think that has really been the stumbling block to adoption.
I do believe the recently accelerated focus on “supply chain visibility” has elevated the once lowly ASN. At one level, ASNs were mostly of interest to warehouse receiving operations and retail merchandisers, and hence in many companies just didn’t get a lot of executive support. But in a world of lean supply chains, just-in-time inventory, focus on reduction of variability, etc., doesn’t the humble Advance Ship Notice occupy a critical cog in the supply chain?
Here are some of the stories we’ve recently heard or reported on:
- ADP Brokerage Services uses web-based tools from HighJump Software to integrate suppliers and create ASNs to dramatically reduce receiving time in the distribution center (case study).
- Leading beer distributor House of LaRose uses a new warehouse management system and other tools from Softeon to start taking advantage of the ASNs available from the brewer, significantly reducing receiving time and cost.
- On-line retailer QVC builds a robust ASN management process and system it tightly integrates with transportation management tools from i2 to dramatically improve its supply chain visibility and streamline inbound logistics processes (case study).
- Apparel retailer Chico’s uses trading partner management tools from Manhattan Associates to gain detailed visibility to activities in offshore and domestic suppliers and (here we go again) receive ASNs that have significantly reduced receiving costs.
- Ditto for manufacture and retailer Ashley Furniture, which is actually an amazing story of a company using visibility and ASNs to “hedge” its inventory bets, and operate a long supply chain with offshore production as much like a just-in-time one as it seems possible. More on this story soon.
The consistent themes throughout these stories:
- Use of web-based tools to enable supplier-generated ASNs.
- Significant (20-40%) reduction in receiving times in the DC
- Use of ASNs not just to improve inbound receiving, but as a critical element of improved supply chain visibility.
We received some thoughtful feedback last year from readers offering perspectives on the low use of ASNs despite the clear operational benefits. Don Feickert of Raleys noted that “some reluctance lies in the area of confidence with the process. As long as companies continue to receive shipments containing discrepancies with he invoice, it's hard to see value in having bad information ahead of time. Until points of origin can consistently deliver exactly what their delivery documents show, the work Around of pre-receiving, followed by any necessary receiving corrections, is less troublesome.”
And he’s right, web-based tools alone don’t mean the ASNs are accurate, and without accuracy they aren’t much good. Still, I believe scorecarding and collaborating can make big headway there, and yes, eventually RFID can eliminate much of these data errors.
David Meyer of Wausau Paper noted the frequent reluctance of companies to actually take out the costs that ASNs could enable. “The commitment to reduce labor is not something facilities usually jump up and down about at a department level,” he wrote us.
That certainly may be a barrier in many organizations. My point again though is the progress I’ve noted in the last 18 months stems in part, I believe, from viewing the ASNs not as a stand alone capability to help receiving, but as a key cornerstone of supply chain visibility.
The tools are there. The benefits continue to be clear and proven. I see lots of progress between companies and their suppliers, though many still have a long way to go. Now, if we could just get that internal plant to DC thing going...
Do you agree we finally are starting to make real progress on ASNs? Is the drive for supply chain visibility what’s fueling the effort, more than just benefits in receiving? What are the barriers to more companies using these tools? If you are a supplier using one of these tools, what’s your perspective? Why is it so hard to do internally between plants and DCs?