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

  1. 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. 

  2. 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.

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.