A division of American Standard Companies, Ideal Standard is the worlds leading provider of bathroom systems and kitchen fixtures. With customers in over 40 countries, American Standard employs 60,000 people across three business operations: Trane (air conditioning), American Standard and Ideal Standard (bathroom and kitchen products, catering to consumer and commercial markets respectively) and Wabco (vehicle control systems).
To maintain a leading position in global manufacturing and in an effort to gain market share outside of the US, the company embarked on an aggressive expansion strategy, establishing new wholesale distribution points in markets such as Russia and the Middle East, in order to grow the companys reach into a customer base extended across Europe Middle East and Africa (EMEA).
Business Challenge
The success of Ideal Standards expansion was dependent upon the companys ability to address the underlying IT challenge of serving and conducting business with its trading partner community. Ideal Standards existing communications system was unable to provide the visibility and control required of a growing business and it did not have the capabilities to respond to market dynamics associated with varying customer demands based on geographical and technological differences.
Ideal Standard required a unified system that would integrate new partners easily, sustain ongoing and future growth and offer a single interface for dealing with customer demands. In order for the company to respond faster to market changes and consumer requirements, the system would also need to meet internal integration requirements, particularly the data verification and mapping into Ideal Standards SAP system.
To meet the needs of the trading community and add new points of sale easily, Ideal Standard sought to implement a centralised system that could cut through the complexity of multiple communication protocols (such as HTTPS, Web, VAN, Point to Point) and data formats (e.g. Edifact, Tradacomm, XML) and any additional country standards.
As an example, all orders in the UK were received via EDI, whereas in Italy, only 40% of orders were EDI-based, and the remaining 60% received in different formats. In Belgium their biggest customers preferred protocol was XML, whereas Greece also required web-based sales and billing mechanisms.
As a result of the European expansion, the increasingly high volumes of data processing further exposed the company to several cost-related risks. The first was the absence of a centralised data management tool, required to deliver effective control over the growing volumes of invoices and orders. The need to maintain disparate IT systems also caused the company to face spiralling costs.
This was further exacerbated by a second key issue area, that of error control and notification, largely performed through manual and error-prone verification and checking placing an unnecessary burden on Ideal Standards resources. The existing ordering and invoice system required staff to run system queries every few hours to verify data integrity and check for errors, meaning that decisions would be made based on invalid or incomplete data. An integrated system would eradicate these time consuming tasks through process automation, providing the ability to resolve invoice and order issues in minutes instead of days.
We chose GIS on the basis of its functionality, scalability and flexibility. The Sterling Commerce solution enables us to automate manual processes and harmonise-business processes and disparate IT systems. It is now easy for us to deploy and manage multiple trading partners in a collaborative trading community environment. Loris Dal Magro, IT Director South Europe, Ideal Standard
The Solution
To respond to these challenges, Ideal Standard aspired to create a collaborative environment that would provide a solid foundation for continued business growth, with the ability to respond to customer demands. Sterling Commerce was chosen to deliver this solution through its solution Gentran Integration Suite (GIS). Built on Sterling Commerces Multi-Enterprise Services Architecture (MESA), GIS provides Ideal Standard with full-featured B2B communications and management, translation, enterprise integration, business process management (BPM) and business activity monitoring (BAM) in one comprehensive suite.
While the systems and standards differ between trading partners and countries, many of the business processes triggered by electronic notification of invoices or order shipments, for example, are identical. As well as managing external collaboration, GIS also provides internal data management capabilities, enabling Ideal Standard to optimise the management of business intelligence and easily create customised processes to verify data quality and route data into the ERP system. The rich set of features offered by the solution, such as graphical mapping, have been deployed by Ideal Standard and now provide greater visibility and control over incoming messages.
The automated error notification process inherent in GIS Suite enables Ideal Standard to now monitor irregularities and highlight lost or delayed orders and invoices; preventing the need for manual processing checks. By deploying this functionality, staff can deal with more value-add tasks in other parts of the business, optimising the efficiency of the order processing department and increasing customer satisfaction rates.
Combined with the translation capabilities, which provide support for all data formats required by partners across Europe, the auditing, tracking and event-driven message management services delivered by GIS help ensure that one central system can route incoming order confirmations, shipping notifications and invoices so data can be automatically verified and acted-upon quickly and efficiently.
As GIS is built on Sterling Commerces modular Multi-Enterprise Services Architecture, it allowed Ideal Standard to roll-out the new system in a phased approach, in line with the expansion of its EMEA operation. The solution was first installed in Italy, then across France, Germany, the Netherlands and the UK between May 2004 and April 2005 on time and within schedule. The seamless integration between partners, applications and business centres has already reduced the time taken to process orders and invoices
Key Benefits
Loris Dal Magro, IT Director Ideal Standard South Europe, said of the implementation, It is now easy for us to deploy and manage multiple trading partners in a collaborative trading community environment. The most important benefits for sustained business growth and competitive advantage, derived in the context of Ideal Standards enterprise and partner relationships were:
Increased sales by enabling Ideal Standard to meet the various data and communication standards requirements across the countries, the company has successfully brought on-board additional wholesale point of sale - therefore matching the companys ambitious development strategy.
Improved customer service increased collaboration; i.e. the flexibility to add partners, exhaustive support for customers e-business requirements and improved responsiveness to their demands has sealed an enhanced relationship between Ideal Standard and its customers, resulting in the delivery of optimum levels of service to new customers.
Ability to react to events, as they occur, for on-time delivery GIS B2B Suite sends automatic notifications for unreceived or erroneous orders, thus enhancing the error notification and resolution process considerably. Errors are now reported within minutes rather than within hours; freeing-up the time of employees who previously conducted manual checks for errors, several times a day. This also means orders are not mislaid or their processing delayed.
Total standards support for ongoing expansion the solution enables Ideal Standard to trade with all customers, regardless of messaging formats, within a single, integrated platform. GIS will provide the standards capability to support the company as it expands into new markets.
Ease of implementation the GIS rollout was completed without any disruption to Ideal Standards customers and within project timescales. Ideal Standards in-house team had full support from Sterling Commerce to complete the rollout and is now able to manage the system internally.
Working with Sterling Commerce has exceeded our expectations. The dedicated team of consultants fully understood our business challenges and ensured the roll out across the European region was smooth and efficient with minimal disruption to our business operations, Loris Dal Magro, IT Director South Europe, Ideal Standard
Decreased Total Cost of Ownership ROI was achieved within 18 months, through enhanced business functionality such as systems monitoring, improved system control and notification management and the capability to support supply chain functionality such as VMI (Vendor Managed Inventory), which enables automatic generation of client inventory orders. The overall cost of ownership of Ideal Standards IT systems has decreased and is now contained within one single maintenance fee.
Future Plans
Dal Magro concludes: Following the closer integration of our customers into our trading community we have seen some solid, quantifiable results. In Italy, we have seen a 20% increase in EDI transactions from the previously cost-inefficient manual processes. 40% of all orders are now in EDI for this region and we estimate this will rise to up to 60% by the end of 2005. This is a significant increase in efficiencies that benefit both our own extended EMEA operations and our customers and Ideal Standard has experienced a general reduction in costs and an increase in efficiencies across the value chain since deploying GIS.
Future plans include extending GIS sophisticated data translation and mapping capabilities to suppliers, in order to create a fully collaborative environment that includes all of Ideal Standards trading partners.
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