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ViewSonic Corp., Walnut, Calif., is a leading global provider of visual electronic products such as plasma and LCD displays for televisions and computers. The fast-growing company needed an integration solution to streamline its global operations and to improve its integration capabilities with retailers, distributors, and online channel customers. ViewSonic selected the Gentran B2B Integration Suite from Sterling Commerce, Dublin, Ohio, for the job.
Q: What was the situation that led ViewSonic to look for an integration solution?
Beseiso: Let me give you some backgroud. We are a global company with about $1.5bn in annual revenue. We have operations in the Asia/Pacific region, where we source most of our product, as well as operations here in the U.S. and in the U.K. Our engineers design products that we manufacture on an outsourced basis. Then we import finished goods into the U.S. and U.K. for sales through various channels. We have two primary distribution centers here in the U.S. One is near Columbus, Ohio, and the other is in Walnut, Calif.
About five years ago we were dealing with several different instances of ERP [enterprise resource planning] systems in the organization. Our operations in mainland China were using a homegrown ERP system and we had three separate instances of Oracle running at our other facilities. This resulted in quite a large IT staff, including in-house and consulting resources, just to keep everything up and running. We wanted to consolidate these ERPs into a single instance of Oracle, so that was one challenge we were working on.
We also were facing some challenges around inventory. Because of our lack of expertise at this time in inventory management, we ended up buying a lot of just-in-case product to protect against stockouts and we began to need overflow facilities to warehouse this product. So we were pretty much wall to wall with inventory in our DCs and our turns were low on many of our SKUs and we had overflow facilities at the major ports where we import.
So we basically had two challenges-a systems challenge and the need to get a grasp on inventory through better integration with our customers.
Q: Do your products generally have a short life cycle?
Beseiso: Yes, it's really brutal, particularly with new product launches. When we launched our four-millisecond product-which means the LCD refreshes very rapidly, in four milliseconds-we were the first to market and I would say, optimistically, that we had about two months before we started seeing entry into the market from competitors. In these instances, we will sometimes airfreight product instead of waiting upwards of six weeks for the product to come via ocean-time is just too critical for us to wait in certain cases.
Q: What was your selection process for an integration solution?
Beseiso: After we consolidated our ERP systems we had a centralized hub for the majority of our data, which meant we were in a position to do a lot of things we were unable to do before, in terms of integrating and sharing information with our customers and, eventually, our vendors. So we wanted to move ahead to enable that integration. In looking for a solution, we obviously wanted to stay competitive in the marketplace, we wanted to be able to streamline our operations and we wanted to create a highly automated integration between us and our customers. But, like most people, we were constrained by our budget. We were not going to get the CFO to release tens of millions of dollars to address these challenges. And we were not able to do additional hiring outside the organization. So we had to address the challenges in the most efficient and effective way, keeping costs down and keeping our head count neutral.
We evaluated a number of vendors, including the Oracle integration package, which basically would have cost us nothing. But what emerged for us was the realization that there really was no organization other than Sterling Commerce that had the integrated, consolidated suite of products we were looking for-and I am not just saying that. Sterling offered a tool set that allowed us to do data transformation in a very efficient manner; a tool set that allowed us to do business process modeling so we could automate our actual business processes; and it offered a lot of pre-built services that we could pretty much drag and drop to configure the system as we wanted it. Finally, the suite was capable of complying with RosettaNet, which, at that time, we were considering using. It also has the traditional EDI transaction sets bundled within it, it has XML and it has the ASII and ASIII options. So in Sterling, we saw a company that was heavily focused on the integration space and offered a complete and consolidated integration solution.
From what we saw with other companies, it would have been really challenging for us to do the data transformation we needed to do. For example, we might have an inbound purchase order in EDI where the output was going to be XML. In the other solutions we looked at, we would have had to write something from scratch to do that transformation. So after doing a proof of concept with several companies, we focused on Sterling.
What we have been able to do is automate all the major portions of our order-to-cash cycle. From the time we receive a sales order from our customer, all the way to when we actually ship the product and send an invoice, all those business processes are automated. This, in turn, has allowed us to focus on other things. For example, we are now starting to look at the vendor side-connecting and extending this same type of integration upstream.
As we continue to integrate the supply chain, our goal is to have as much product as possible sold before it even touches our facilities, so that it will go directly from the port to our customer or to our customer's customer. This will minimize the number of touch points and increase the number of turns on inventory. Of course, this presents additional challenges. Since we are working with manufacturers in a vendor relationship where they are not a part of our organization, we need to develop agreements to be able to have visibility to what is coming off the line, what is getting ready to hit the water and what has actually hit the water. That is where we ultimately are trying to go as an organization. So our business challenge is in building the systems and leveraging technologies to turn inventory prior to its even touching our DC.
Q: What are the key benefits you have realized?
Beseiso: Well, by consolidating our ERPs we reduced the number of hardware servers we needed from six to two. This enabled us to cut our hardware maintenance costs by two-thirds and reduce IT resources by about half. We also dramatically reduced our accounting month-end closing time from over a week to approximately two days.
One of the key benefits from the Gentran Integration Suite is in the amount of time it takes us to develop and implement a project with our customers. Currently, for example, we have a customer that wants to send us electronic invoices and we want to integrate those invoices into our accounts payable system. Because we are using a common standard-in this instance it's EDI-we can easily create a data transformation that takes the customer, transforms it and puts it directly into our Oracle database. The great thing is that with the Gentran Suite, this all can be done in memory so no flat files have to be created. Before, it would have taken us a month to get this up and running, but now the development time is less than two weeks. We have become known as a company that is easy to do business with and that has certainly translated into increased sales.
Because the technical infrastructure is built on service-oriented architecture, we have significantly increased our ability to respond to our customers, which has clearly resulted in additional sales opportunities. On one project alone, we increased sales by more than $10m.
Q: Are there any lessons learned from this project that you would like to share with our readers?
Beseiso: I would say to approach integration projects with an open mind, particularly when it comes to leveraging the internet. Secondly, look at tool sets that are feature rich. If someone provides you with a tool that allows you to configure with a simple drag-and-drop and that meets your needs, then go with that as opposed to custom-building something.
Finally, I would say master the learning curve as quickly as possible by using the tool to improve a process that is well understood and well defined. Determine how you can reengineer that process, break it down into manageable pieces, then roll up your sleeves up and immerse yourself in the technology. That way, you will quickly learn an immense amount that will help you going forward.
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