|
RUTTERS FACTS
Established in 1921 by George, Bud and Will Rutter. They christened their
operation "Crystal Spring Dairy" after the cold spring on the farm which
served as their first refrigeration. The farmland had been deeded to the
family in 1747 by the descendants of William Penn and is today recognized
as one of the oldest continually operated family farms in America. The
corporation is headquartered in York, Pennsylvania.
Today
the Rutter Companies include Rutter's Dairy, Rutter’s Farm Stores and a
real estate company.
The
dairy processes about ten million gallons of milk each year. The milk
comes from 40 rea dairy farmers and our own herd of lovable Guernseys and
Holsteins. Bottling is done in York, PA.
There
are 51 Rutter’s Farm Store locations throughout Central Pennsylvania. New
stores average 4300 square feet . Total Retail operations serve more than
65,000 people every day. Retail services include pay-at-the-pump, ATM
machines, fast food and a fleet fueling program.
Rutter’s Dairy Inc.
2100 N. George St.
York, PA 17404-1898
|
Summary
Rutter’s Farm Stores
(York, PA) were faced with increasing store level inefficiencies caused by
manual processes during product receipt. Faced with multiple vendors, more
than a thousand DSD SKU’s, and manual entry of the invoices by store
management, they needed to drive costs out of their supply chain.
Rutter’s also owns a dairy. Rutter’s shared ownership provided a perfect
opportunity to bring supply chain efficiency to both its companies.
Rutter’s management teamed up with NCS – Numeric Computer Systems, Inc of
Hauppauge, NY to implement a method to electronically deliver invoices via
National Association of Convenience Stores (NACS) developed XML standard
language called NAXML.
Jumping the Gap During Delivery
Every
time a delivery by a supplier is made to a retailer, the physical gap
between supplier and retail is temporarily bridged as product moves from
the hands of the driver to the retailer’s receiver. Likewise, the data
associated to the product being delivered, most often comes in the form of
an invoice, eventually moves from the supplier’s computer system to the
retailer’s system.
The
physical product bridges this “gap” easily as product moves from warehouse
to truck to the retail store. The delivery mechanism for the data
associated with the delivered product however, has historically moved from
supplier’s system to paper (in the form of an invoice or delivery ticket)
then to retailer’s system by re-keying the information.
Rutter’s Store Management had filled this data gap between partners by
manually entering invoice and credit details into their individual store
systems. Data detail included the SKU number, case or each amounts,
pricing and promotional or allowance details for each SKU and of course
the header information that identifies the supplier, invoice #, and date
received.
Only
after the invoice is entered into the retail system, the gap for the data
is bridged, and “catches up” with the product sitting at store level.
This happens every day with 10—20 deliveries.
Challenge
This
“bridging” at the back door happens multiple times a day at all Rutter’s
Farm Stores multiplying the inefficiencies across the organization. Store
managers were pulled away from revenue generating customer service or
sales related activities in order to spend non-value added time entering
invoices of received product at store level.
This
tedious manual entering of invoices was prone to errors during entry.
Additionally, price and promotional differences between supplier and the
retail system had to be tracked and reconciled with the main office
personnel for follow up. Finally, incorrect entry of information made the
available data unusable for SKU level analysis such as purchase versus
sales.
Solution
NCS
created a solution for Rutter’s Dairy that creates an NAXML version of the
settled invoice which is FTP’d to the retailer system. The solution was
designed so that the NAXML invoices can be run as often as needed or
are then processed through the Rutter’s
Farm Store back office accounting system and then parsed to the
appropriate Rutter’s Farm store.
With
the solution in place, the store management confirms receipt of the
product by entering the invoice number from the physical invoice received
at delivery. A quick review and any adjustments, if needed, and a click of
a button confirms the receipt of the electronic invoice to the store’s
system.
Results
1,500
items delivered directly to each Rutter’s Farm Store. Rutter’s estimates
their metrics savings on just dairy invoice processing alone is
approximately $390/year/store. (10 minutes data entry x 3 days per week x
52 weeks x $15 per hour labor).
Conclusion
100%
of Rutter’s Retail Stores are delivered via DSD / direct store delivery.
Their stores, typical of all “C” or convenience food stores, have little
or no back room and limited shelf space. Store management, in this tight
environment, are required to run the entire operation - from receipt of
product, to merchandising and sales. The solution opened up a constraint
on their “C” store operations by freeing up store management so they can
spend more face time with customers, and managing team members versus back
office accounting time.
Rutter’s Stores recently began to receive NAXML formatted invoices
electronically from other suppliers including Utz Potato Chips, Stroehmann
Bakery, Associated Wholesalers, Inc., Novelty, Inc., Pepsi and Frito-Lay.
Many more suppliers are working on development of similar NAXML invoices
for Rutter’s and the industry.
Additionally, Rutter’s Dairy Operations are prepared to send their own
NAXML invoices to other retailers. The C-store industry is currently in
an implementation learning mode. As more c-stores learn how easy the
process is to implement, Rutter’s Dairy hopes to provide this service to
other c-store customers.
Improvements
Rutter’s Farm
Stores:
Invoice / Receipt Error Reduction.
Receiving / Back office support time reduced.
More time for value added activities at retail.
More accurate data for order replenishment purposes and SKU
rationalization.
No lost invoices causing inventory reconciliation issues with HQ.
For
Suppliers:
Driver time better utilized versus scanning product during receipt.
Accounting receives retailer remittance advice to match invoices /
payments.
More accurate payments, less time researching price / allowance
differences.
Next steps for Rutter
Farm Stores
-
Synchronize the price book. Provide the ability to rapidly update and
add information (pricing, allowances, authorized lists, new items,
effective dates) ensuring accurate data throughout the system.
-
NAXML paves the way for more intensive e-collaborative processes. Data
synchronization correct information “up stream” before driver and
receiver meet. Data synchronization a step toward “invoiceless”
receiving through the use of store level WAN or RFID.
|
|
A Little Background on NAXML
NAXML
was developed by members of the National Association of Convenience Stores
(NACS) involved in NACS' Technology Standards Project to help companies
automate their systems through several different enabling technologies and
communications channels. It has developed XML *DTDs and schemas to support
electronic business document exchange within the convenience store
industry. Several pilot projects have been started to test the NAXML
specifications for lottery systems, fuel purchases, food service
transactions, and other retail activities.
The
Petroleum Convenience Alliance for Technology Standards (PCATS) was
founded as a non-profit organization to continue the development,
maintenance and implementation of standards work initiated under the NACS
Technology Standards Project. It has over 100 suppliers and retailers as
members. More information can be found at www.PCATS.org.
*DTD - Document Type Definition
A DTD can be considered the grammar for a markup language.
It states what tags and attributes are used to describe content in a
document. It is a set of regulations that specifies the usage of XML
markup. It defines elements, an element's attributes and its values, and
contains specifications about which elements can be contained in others.
DTD can also define entities.
Background on
NCS—Numeric Computer Systems, Inc.
NCS
is a premier provider of supply chain execution solutions supporting the
Direct Store Delivery process. Designed for the demands of the direct
store delivery (DSD) market, NCS automates both back office functions and
the requirements of mobile sales/delivery workers focusing on the fast
moving consumer goods industry including baked goods, beverages, dairy,
frozen foods and snacks.
NCS’
flagship Order to Cash Host System (“eRMS”) operates on AS/400, Unix and
NT. The User Interface is available via a standard web browser, GUI, or
text. This back office system seamlessly integrates to Supply Chain
Management Systems.
NCS’
eXpress Suite extends the enterprise to the point of purchase with
solutions for the mobile work force. This industry leading technology
integrates the mobile sales and delivery workforce (drivers, sales reps
and merchandisers) with their ERP/SCM system.
back |
