Moving from EDI to API to Streamline Your Supply Chain – with Wayne Ellis

Full Transcript

Francis Adanza

Welcome to the Down to Freight podcast, where we sit down with transportation, logistics, supply chain, and warehousing subject matter experts to discuss the Digital Transformation Project. I’m the host of the show, Francis Adanza, and it’s a pleasure to welcome Wayne Ellis, VP of Supply Chain North America Operations for SVI. Wayne, it’s great to have today.

Wayne Ellis

Thank you, Francis. It’s great to be here.

Francis Adanza

Awesome. Well, can you please tell the listeners a little bit about yourself, your company and what you’re responsible for at SVI?

Wayne Ellis

Okay. So I’ve been in supply chain for 34 years now, specifically supporting the electronics industry for over 25 years. SVI is a Thailand-based electronic manufacturing services company with facilities across Southeast Asia and Europe, with plans to expand further in the Americas in the coming years. So EMS companies don’t build our own products with our names on it. We’re contracted by companies that you’re well familiar with and act as their manufacturing arm. Our operations cover NPI, specialized printed circuit board, box build manufacturing, and solution-oriented aftermarket services for such sectors as automotive, medical, industrial, electronics, telecommunications, audio, video, security, and micro electronics. You’ve almost certainly seen products that we manufacture in your everyday life in such places as your doctor’s office, your car or security cameras in hotels or retail stores.

Francis Adanza

Wow! That’s amazing. Thank you for providing that background. So as you know, we’re here to talk about technology. Is there a recent project or a current project that you’d like to share?

Wayne Ellis

Yes. We’re currently rolling out a very large API implementation. For those that are not familiar with API, it stands for application programming interface.

Francis Adanza

Interesting. Integrating systems is always challenging, but mission critical to data sharing. What specifically is the problem you are trying to solve or the vision for this API project?

Wayne Ellis

Okay, so the problem is there’s a severe global shortage of many electronic components today, making it very difficult to find available inventory in the market. So we need real-time information from our suppliers so that we can review stock availability and pricing. And this project allows us to obtain information electronically in real time, allowing us to better service the needs of our customers. So by utilizing API our system can communicate with our suppliers, allowing stock visibility, pricing comparison, and actually place POs directly with key suppliers without any human involvement.

Francis Adanza

Got it. That makes a lot of sense. So can you touch a little bit on the size of this project or the complexity, like how many partners or systems you’re trying to integrate with, and maybe the volume of data that needs to be shared?

Wayne Ellis

Sure. We rolled out the first step, which is determining the stock status and pricing with six suppliers already. And we’re preparing to go live with auto-placement with the first suppliers later this quarter. We hope to be live with at least 10 to 15 more suppliers this year with a goal to get up to about 50% of our purchasing automated by the end of this year. We collect information on tens of thousands of components from each supplier weekly, so it’s a pretty big project.

Francis Adanza

Wow, it sounds like it. So along those lines, are you buying a third-party API connector solution or are you building all of these yourselves in-house?

Wayne Ellis

Well, actually we reviewed both options and we decided to build the API ourselves so we can better control and maintain changes, if or when our suppliers make updates to the systems. All of our suppliers are somewhat competitive, so sharing data is very sensitive and our APIs have to adhere to their security requirements.

Francis Adanza

Got it. So what impact will this level of integration have on your business?

Wayne Ellis

To add to what I mentioned earlier, this should reduce our workload by at least 50% for the parts on the program. I mean, imagine the benefits involved with minimizing phone calls, emails, and spreadsheets. Furthermore, we’ll be able to turn around the majority of electronics floats in minutes versus several days, with very little man-hour involvement. We now have instant access to their material and pricing, so we can quote to our customers, manage spot buys, and or urgent customer demands.

Francis Adanza

Got it. Okay. So before embarking on this journey, what was the implementation plan?

Wayne Ellis

It was a phased rollout. So step one was working with the suppliers to see if we could get a flat file export of the data. And then step two is actually connecting the systems so we can more easily manipulate and report on the data in our ERP system. And then step three is adding automation like the instant purchase ordering from our suppliers without us having to do any manually managing of each transaction.

Francis Adanza

Got it. Okay. So that’s a well detailed plan. Now, as you’re looking back on the before and after, how do you measure the benefits?

Wayne Ellis

Well, easily the largest benefit is the reduction in shortages, and the ability to solve those large numbers of shortages all at once. And then really it’s how quickly we can turn around our quotes for our customers, which is going to hopefully lead to an uptake in sales. And then you add in that reduced paperwork, the non-value added time that goes away, and the improved collaboration with suppliers, which ultimately leads to improvement in customer satisfaction and user experience.

Francis Adanza

Oh, that makes complete sense. So, words of advice for the listeners and those thinking about embarking on an API project, what are some things that they should consider to have equally as smooth as a project as you did?

Wayne Ellis

Okay. So first of all, don’t take on too much at once, break it down into smaller deliverable pieces. Set the right expectation with your partners and be clear on the cost and benefits for both sides. And then keep your customers in the loop, so they’re aware of the improvements you’re making to invest in their relationship, because ultimately it’s about customer satisfaction.

Francis Adanza

Got it. Great tips, thank you for that. So what’s next on the horizon for this API project or for you in general at SVI?

Wayne Ellis

Well, in addition to getting this API rolled out, we’re making several other strategic changes in the market to meet the market demand. We’re doing significant expansions in our factories in Cambodia and Slovakia. We’re doing some retrofitting in some other factories to take on the additional growth we’re experiencing in the automotive sector. We’re in the process of expanding our in-house manufacturing capabilities in the areas of plastic, metal and cable manufacturing. And we’ve just recently been consolidating our spend through the addition of a global commodity management team, which helps us get the best global pricing services and terms from suppliers around the world. And finally, one of the things I’m really focusing on in addition to the supply chain pieces is building business development here in the United States, so we can continue to grow here.

Francis Adanza

Wow. Well, it definitely sounds like you have an ambitious schedule and busy workload coming down the road for you. Maybe we’ll have you back on for a future podcast to talk about some of the lessons learned from those initiatives.

Wayne Ellis

Thank you. That would be fantastic.

Francis Adanza

Well, Wayne, it was great speaking with you today. Thank you for your insights, and definitely appreciate your time.

Wayne Ellis

Thank you very much for having me on, and for getting to chat with you.