ERP not enough for supply chain visibility and collaboration at Vesuvius

Vesuvius

Summary: Vesuvius avoided the pain involved with deploying a single instance ERP, and, instead, selected Tradeshift and app partner Quyntess to enable a transformation that includes greater master data integrity and quality of information, deeper cost and process efficiency, and the foundation for its shared services setup.

Vesuvius: background, challenges and strategy

Vesuvius plc is a leading engineering ceramics company headquartered in London whose products are used by steelmakers and foundries as well as in the glass and solar energy industries. The company feels right at home with high-temperature product applications. It’s listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. Vesuvius has over 85 offices across 38 countries and employs 12,000 people.

Facing pressures such as a slowdown in global steel production, lower domestic demand in China, and a reduction in investment in capital equipment in all markets, the company’s strategy is to steadily add value and differentiate key elements of its products and services. As part of this initiative, it is focusing on innovation and targeted R&D. To keep cost in line with global benchmarks, Vesuvius has begun an administrative efficiency and cost reduction initiative that will deliver millions of British Pounds of yearly savings towards the end of 2017.

To support its innovation and cost reduction plans, the metal flow engineering firm has committed to standardizing its business processes, consolidating data from multiple ERP systems, and delivering insights to leaders across businesses units and external business partners. Much of this is financial data that shareholders demand in record-breaking turnaround time. The list below summarizes the new requirements:

  • Drive down costs
  • Improve information quality
  • Increase delivery speed
  • Design around (internal) customer needs

In the context of these requirements, Jorrit Meijerink, Global Director of Business Processes, Vesuvius, recently explained at a supply chain event, “Procure-to-pay processes are no longer about purchasing, but rather are now end-to-end and drive through the organization and should deliver specific results to the customer. And that’s how we want to redesign our processes.”

The company first considered a new single-instance ERP to help meet the new requirements, but soon realized that it would be an unwise path for many reasons. Principally, it would limit continuous improvement and offer little beyond automating existing processes rather than allow the firm to reorganize and model improved business processes through new technology.

Decision point: monolithic ERP vs. open, extensible collaboration platform

“Can big ERPs deliver these specialized services or are we much better off with dedicated solutions that serve a procure-to-pay process with dedicated financial solutions that serve an R2R process? Even big companies that have invested in global ERPs are still looking to put these layers on top,” claims Meijerink. In light of this reasoning, Meijerink and his team chose Tradeshift and third-party apps from Tradeshift app partner, Quyntess, to meet the organization’s goals.

Tradeshift’s collaboration platform connects Vesuvius’s enterprise systems as well as suppliers all in a single, centralized place enabling all integration and communication for procure-to-pay processes, such as order management and tracking, and invoice processing. It provides an application layer that abstracts the company’s diverse business application landscape.

“Tradeshift gives us platform-based collaboration, allowing us to replace our point-to-point connections with a centralized integration in the middle; so now we can manage very defined relations, we can define interfaces, and we can build workflows,” said Meijerink. Because it’s standards based and open, Vesuvius will use it to simplify data management, system and partner integration, as well as handle non-standardized processes.

One of the key advantages that appealed to Vesuvius, is the potential for adding tremendous open-ended value beyond its collaborative procurement capabilities. Tradeshift is an open development platform, meaning that Vesuvius can continuously add apps for diverse and ever-evolving business requirements through its own development or through a third-party app marketplace that exists on Tradeshift. The company has implemented an order collaboration and purchase order processing app from Quyntess, which allows for real-time collaboration with suppliers in Poland, the Czech Republic, Hungary and elsewhere.

Meijerink continues: “We can send our purchase orders through the platform, and the platform will communicate with the supplier. The collaboration takes place on the platform, and the end result we take back into our systems. Similarly, all suppliers send invoices through the platform, where all validations are handled, and only after that is the invoice data brought into our company.”

Meijerink says that being able to get instant information directly from the supplier about where the product is in the customer process is a game changer.

Future proofing via the platform approach

Instead of implementing a legacy ERP that offers little advantage next to a platform that seizes combinatorial technologies such as mobile, cloud, and ubiquitous computing, Vesuvius now has a foundation that enables transformational benefits because it lowers costs across its entire ecosystem of trading partners.

Tradeshift delivers a balanced approach to all platform participants, including buyers, suppliers, app providers, lenders, and other vested entities. This is starkly different from traditional “supplier networks” or “supplier portals” that remain largely focused on the buyer.

In the next phase, Vesuvius will roll-out Tradeshift to suppliers on a global scale, adding more locations to help serve its multiple business units. It will develop new apps that can encompass everything from purchasing to logistic activities, allowing even tighter integration into transportation management. Another app slated will help enrichen the purchasing module for catalog management. Finally, Vesuvius will use the platform to drive the setup of the shared service organization.

Benefits Achieved with Tradeshift and Quyntess

  • Increased business performance through improved efficiency and cost reductions
  • Greater agility and competitive advantage
  • Accelerated ability to consolidate information and report insights to LOB executives
  • Greater data integrity
  • High level of user adoption
  • Increased labor productivity

Watch the video of Meijerink’s presentation at the Supply Chain Innovations event last March in Antwerp to learn more:

 

About the Author

Tradeshift connects buyers, suppliers, and all their processes in one global network. We help you transform the way you work with suppliers today – and adapt to whatever the future brings.

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