Redefining Supply Chain Management
Faster than a speeding e-mail. More powerful than EDI. Able to link printers, publishers and paper mills in a single bound. It's papiNet! And, it's likely to make a super difference in the way businesses are run.
PapiNet is a global initiative to develop and implement a set of standard electronic transaction formats that can be used by all parties engaged in the buying, selling and distribution of paper and forest products. It's goal, says David Steinhardt, regional director for papiNet North America and chief executive officer of IDEAlliance, is "to improve the speed, transparency and efficiency of transactions and administration throughout the entire supply chain between paper manufacturers, publishers, printers and paper merchants."
Should the initiative prove successful, Quad/Graphics of Pewaukee, WI, will use a single set of business documents that will include XML-based purchase orders, manifests and order confirmations to communicate in virtual real-time with everyone in the paper purchasing supply chain. Using XML and the Internet, the papiNet standard provides a digital dial tone that companies can use to automate the exchange of business information. This standard builds upon the existing communications infrastructure, enabling the communication of complex business documents as easily as voice communication. The standard includes common terminology and business documents for use in both domestic and international electronic transactions.
"It's computers talking directly to computers," explains Mike Ziegler, integration services manager at Quad/Graphics and a papiNet standards development work group representative. "We've generated electronic or EDI messages between ourselves and customers or suppliers for years. With papiNet, we plan to upgrade those messages and the technology so that when a purchase order is generated, it goes directly to the vendor's resource planning system.
"No one has to receive it, print it out and enter it manually. Efficiency is increased and accuracy is maximized."
Improving Supply Chain Management
As demands are made on the quality and type of information available to the supply chain, manual processes and older automation systems can't keep pace. "The problem we run into is that each of our customers and vendors has proprietary business forms that are unique to the way each wants to conduct business," says Ron Nash, Quad/Graphics vice president of customer service and board member of papiNet NA. "With papiNet's structured messages, there's no need to negotiate and agree on data definition and formats with each trading partner."
Nash points to the industry's inability to plan and forecast the availability of paper. "Clients often have to buy more paper than they need, or order earlier than they want, because lead times on paper are broad," he said. "We think papiNet will provide total visibility to the entire supply chain. You can wait later to make decisions, buy closer to your real needs and ship later, etc. Everybody knows what's needed, when it's needed and where it's needed."
Already in the Works
Quad/Graphics began sending purchase orders using the papiNet standard to Stora Enso in June. And, more recently, standardized delivery messages were sent to UPM-Kymmene. "It's a good start," says Ziegler. "But, it's going to take awhile to fully implement the process. We'll be integrating these messages into our systems over the next one to two years. And, we'll encourage our suppliers to do the same."
Stora Enso already reports some improvement to its bottom line, which Kevin Shibilski, North American business-to-business project leader for Stora Enso, attributes to papiNet. "In the EDI model, we're charged every time information is sent or received over the value added network (VAN)," Shibilski explains. "Because the papiNet standards use XML, our VAN charges dropped 10 percent. Once our major customers get on board, they could easily drop another 50 percent."
A 20-20-20 Fit
The papiNet standard promises to be an ideal fit with Quad/Graphics' 20-20-20 formula for reducing cycle times. "If this comes together the way we anticipate, papiNet standards will give us the ability to drive costs out of the process," says Ziegler. "The better we can manage our paper relationships with our suppliers, the better product we can give our customers. It'll help us run our business more efficiently, and everybody benefits from that."