Sterling Commerces Gentran:NT Server was introduced as the integration solution at Honeywell as an essential component of the companys Digital Works initiative that commenced in 2001. The aim of this initiative was to unify and integrate IT and business processes throughout Honeywells worldwide operations. The initiative has been a huge success and in less than two years the number of orders placed electronically in Germany has risen from 7% to over 50%.
The business pain
Potential difficulties in technical communications between international companies is an e-commerce problem that should not be underestimated. While the world of traditional commerce has recognised English as the universal language of business, when it comes to ensuring common understanding between enterprises when exchanging digital data across borders the situation is not as clear-cut, due to the different programmes, standards and formats used in various countries and continents within the global supply chain.
Guido Spth, European IT manager sales & marketing at Honeywell Environmental & Combustion Controls (ECC) in Mosbach and his colleagues are preparing to set up unified IT infrastructures for electronic communication within Honeywell's European branches and with its customers worldwide.
To understand how far from trivial the underlying task is, all you have to do is take a quick look at the figures for Honeywells business. With an annual turnover of close to $24 billion and a workforce of around 120,000 in 95 countries, the Honeywell corporation is one of the top 5,000 companies in the world. Along with products and services for the aviation and automobile industries, its activities range from energy generation systems to special chemicals, fibres, plastics, as well as electronic and high-tech materials. This broadly diversified portfolio is one of the reasons why Honeywell shares are among the 30 highest-value shares in the Dow-Jones Index.
For the heating and personnel hygiene equipment market, as well as for home and building automation, the Honeywell ECC (Environmental and Combustion Controls) Strategic Business Unit offers a well-respected portfolio of specialist products. These have been developed over decades and include strong brand names such as Braukmann, Centra and MNG, which have contributed to the high standing of the Honeywell group within its market. In Germany, one of Honeywells primary markets, the company has access to the resources of a wide range of distribution networks and numerous manufacturing facilities. Over 7,000 staff in this territory produces an annual turnover of more than a 1billion.
Digital Works at Honeywell
Due to the many divisions and worldwide compositions of Honeywells business has meant that for a number of years, the global communications framework has been in need of reshaping. In 2001 Honeywell introduced the Digital Works initiative, with the aim of achieving standardisation of its IT infrastructures worldwide and to eliminate paper-based processes. Central to the programme was the introduction of Sterling Commerces Gentran:Server for NT, to support the collation and integration of the various IT standards and formats. This process optimisation reduces our up-front transaction costs in order and delivery fulfilment, Spth continued. Honeywell selected Sterling Commerce because of its market reputation as a leading integration specialist. Above all, Sterling Commerces international profile and its industry experience were exactly what we required for our multi-national enterprises.
Branches in four European markets, Austria, the Netherlands, UK and German, are now using the data conversion services made available centrally through the Gentran:Server. The files are transmitted via the X400 protocol from the individual European branches or direct from customers using the Gentran System. These files are then converted to the in-house standard of the various order-entry systems, and are then sent back to the individual branches. Jrgen Hohmann, sales manager at Sterling Commerce, singles out the considerable flexibility of the Gentran solution: This product represents a real any-to-any conversion solution that can translate any format into a standard file ensuring data transfer disruption can be avoided. This solution was therefore ideal for Honeywell.
Significant time and cost advantages of using the Gentran:Server
Early results of the project have already demonstrated the significant advantages that can be derived by using an effective digital communications infrastructure. Previously it took about three minutes to enter an order onto the system. Using EDI this has been reduced to only one minute, explained Spth. This provides Honeywell with the essential business advantage of faster processes. Since automating our order and dispatch processes, we now have significantly lower dispatch costs as the order confirmations are no longer sent by post. With a total of around 100,000 order confirmations a year in German distribution alone, the cost savings this has generated have had an enormous impact on your businesses bottom-line.
A further advantage of the new electronic transactions system is that the overall processes have become faster. Our EDI business / trading partners can be assured that orders received through EDI are actioned the same day and the required items are sent immediately to the downstream production and distribution systems. In the age of the global economy, these time savings will provide a decisive competitive advantage for Honeywell amongst our partner communities.
In addition the new capability to digitally archive documents directly allows Honeywell staff to have faster access to historical order data, enabling the company to improve its customer service.
A win-win situation for Honeywell as e-Community plans take giant leap
Due to the success of the initial implementation of Sterling Commerces technology Honeywell is now in a strong position to integrate its customers into the electronic community ahead of schedule. To do this Honeywell is currently offering three different types of data transfer to its customers - the exchange of files via EDI and XML, as well as so-called e-orders. Using e-orders, a specialist provider uses simple scanning technology to transform incoming and pre-defined faxes into digital format. The benefits here have been two-fold; our business customers benefit from a networked and digitalised communications structure, and the complicated status structures have now been simplified - stock levels are more easily adjusted, and processes within the purchasing, book-keeping and goods-in departments have all been optimised.
For Honeywell this entire project has been a win-win situation. The cost advantages to date have enabled the company to make a dynamic expansion into realising its plans for an effective e-Community. In Germany alone, the number of orders placed electronically has risen from 7% at the beginning of the project in 2001 to over 50% by mid-2003 - the companys original target for this period was 30%. In the same period, the number of customers with EDI communication has risen from around 90 to 350 companies an increase of almost 400%.
Honeywells latest targets are equally ambitious. The companys positive experiences in Germany have marked the way forward as the e-Community expansion plans are progressed, starting with the European roll-out of the EDI network that will be implemented over the next two years.