Special Issue: Collaborative Commerce - Smaller Companies Also Benefit From Collaboration With Partners

Collaboration is not limited to big companies with extensive information technology resources. Many small to mid-sized enterprises also are finding ways to improve supply-chain operations by collaborating with their customers and suppliers.

Eric Scott Limited, for example, uses the VIP enterprise portal solution from Made2Manage Systems to improve communications with its partners, both up and down the supply chain.

Eric Scott is a family owned manufacturer of high-quality natural and synthetic leather goods based in St. Genevieve, Mo. It makes stationery products for companies like Franklin Covey, personal leather goods and business accessories for high-end catalog retailing, and motorcycle accessories for Harley-Davidson.

The company, which was founded in 1985, had operated well on a home-grown IT system for 12 years, but as it continued to expand into new markets like motorcycle accessories and to provide additional services around product distribution, it needed a more robust solution. "It didn't make sense for us to keep continuously redeveloping things internally, so we looked outside for a new system," says Joe Young, director of information systems. After a rigorous selection process, Eric Scott selected Made2Manage, Indianapolis, Ind., a company that specializes in enterprise and supply-chain solutions for companies with revenue of up to $250m.

"Made2Manage won out because of their very strong tools and because of their support staff," says Young. He explains that Eric Scott had decided to completely restructure its parts numbering system and its chart of accounts in conjunction with a new system implementation. "Made2Manage had a lot of tools to help us migrate information and they worked with our great internal team to make sure we had all our ducks in a row," he says. The implementation started in July 1999, and the accounting side went live in October. Three months later, on Jan. 1, 2000, the company turned on the rest of the system. "We never operated the old and new systems simultaneously. We just turned the switch and everything worked great," says Young. "That was very impressive."

While Eric Scott uses Made2Manage to run all aspects of its business, the collaborative part is mostly centered in the VIP portal. With this solution, Made2Manage hosts the collaboration servers, but not the data, which is kept behind Eric Scott's firewall. Made2Manage calls this "hybrid hosting." "A lot of our customers consider their data to be the family jewels," says Gary Rush, chief technology officer at M2M. "They don't want to let it outside the four walls, so we took an approach that lets us run the servers, and with a little piece of software called a 'managed gateway' they can get a fairly wide degree of collaborative capability."

One of the drivers for Eric Scott to invest in this system was the opportunity to provide saddlebags and other accessories to Harley-Davidson. "Harley Davidson is a great match for us because they have very high quality standards, as do we, and strict guidelines that have to be followed," says Young. One of these is the ability to communicate via electronic data interchange (EDI). "We were in good shape on many things, but EDI was something we needed to implement, so that was a part of the full software scenario."

Now, orders come in through EDI to the Made2Manage system, which schedules the orders for manufacture and shipment. This information is made available, in real time, on the VIP portal. With only a browser, Harley-Davidson-and other customers - can access the Eric Scott portal 24x7 to check on order status. This site also has a direct link to the UPS Worldship tracking system, so visibility extends to goods in transit. In addition, once an order is shipped to EDI-equipped customers like Harley-Davidson, an advance ship notice is forwarded.

Previously, keeping track of orders and inventory involved continuous phone calls, faxes and frustration, says Young. Moreover, without visibility to their orders, customers typically placed large orders and stored product until it was used up. Now small orders can be manufactured on demand and shipped directly to dealers, reducing inventory for customers and material cost for Eric Scott. Harley-Davidson, for example, has both domestic and international dealers, and Eric Scott ships direct to them all.

The motorcycle manufacturer also is one customer that uses the portal to pay Eric Scott's invoices electronically, enhancing the company's cash cycle.

"Right now we use conventional EDI, but there will come a time when we switch over to the new [Microsoft] .Net architecture and an XML environment," says Young. "That's the strategic model this is based on."

Young anticipates that this transition will enable Eric Scott to grab retail information directly from its customers' web sites and quickly integrate that data to its own back-end systems, helping the company fulfill its customers' orders.

The current Made2Manage system, notes Rush, already can translate messages from EDI to XML or vice versa, depending on which format the user prefers.

On the supplier side, the portal also provides a collaborative forum. A few suppliers currently use the VIP portal to check on their inventory status with the company. When inventory reaches a pre-set level, a new shipment is released. "We have vendor-managed inventory agreements with a handful of suppliers," says Young. "We're trying to bring more vendors on board with that."

Eric Scott also uses the portal to exchange "virtual design" documents with customers. "It goes without saying that lot of product development costs are consumed if you are continually making real live samples," says Young. "That involves a lot of materials and labor and is just a huge investment." As an alternative, Eric Scott frequently gives customers access via the portal to three-dimensional drawings of product designs. Customers can download the drawings to work on them or make notations while online. "With this system, by the time we actually get to the point where we are making live samples, we have a pretty good idea of what our customer is looking for," says Young. "This has dramatically reduced our timeline from product conception to product delivery."

Additionally, Eric Scott is just now starting to roll out Made2Manage's document repository in conjunction with this service. Adding this piece will allow customers to easily review and reuse past designs and it will provide a record of design development, including which alterations were made when and by whom. "Adding this piece of the puzzle is just one more way Made2Manage enables us to work with our customers," says Young.

The Made2Manage implementation has had one unanticipated result. Without having to "baby-sit" a system, Young and his team had time to start a new technology services business. The new company, which is helping other similarly sized manufacturers in the Missouri area implement technology solutions, is creating a whole new revenue stream for Eric Scott.