AG Barr implements Paper-to-Digital EDI with Transalis, resulting in significant resource and cost savings to the business.

  • £15,000 annual saving on processes with ten priority customers
  • 5% improvement covers investment spend on project
  • 572 man-hours saved annually for higher-value operations

Background: multiple delivery channels

Soft drinks manufacturer AG Barr is synonymous with the iconic, best-selling Irn-Bru, launched in 1901. In an affectionate nod to the ubiquitous reputation of whisky, it’s often described as ‘Scotland’s other national drink’.

But it’s far from being the FTSE-250 company’s only successful brand. Among many other popular lines are the Rockstar energy drink, Rubicon exotic fruit juice, Bundaberg ginger beer, Funkin Cocktails and Caribbean-inspired KA fruit punches.

Founded in 1875 and headquartered in the Lanarkshire town of Cumbernauld, AG Barr employs 1,000 members of staff and operates production sites nationwide including a £41 million canning facility in Milton Keynes.

The company has a demonstrable track record in securing long-term sustainable growth. This is underpinned by strong, mutually beneficial trading relationships with trusted distribution partners.

As well as servicing the most familiar names in food and beverage retail, including giants such as Tesco, Lidl, Sainsbury’s, Asda, Waitrose and The Co-op, there are delivery channels to regional cash and carry wholesalers selling to the smallest corner shop. There are also direct store delivery channels and contracts with regional restaurant groups and grocers.

The challenge: different ways of working

Having so many routes to market means that AG Barr’s customer service team are in continual contact with a range of wholesalers, distributors and retailers.

Mostly, it all goes smoothly. The bulk of the trading network runs to a greater or lesser extent on automated processing. This means that orders, invoices, delivery notes and other essential documentation can be shared in respective IT systems without too much of a fuss.

But not every contact is so ‘user-friendly’.  Despite the growing take-up of EDI, or electronic data interchange, some trading partners have insisted on keeping email attachments and PDFs as their preferred way of communicating order information.

To accommodate this, staff at AG Barr have had to manually process the documents and duplicate the information into their back-office systems. The downsides are obvious: unnecessary time having to be spent, avoidable cost on the bottom line, and the risk of human error leading to mistakes that have to be rectified later on.

Julie Kelly, AG Barr’s Business Process Analyst, explains: “Our larger customers, such as Tesco and Bookers, use EDI. The relationship often involves processing orders through an EDI partner, with documentation being dropped straight into our ERP system. But we have traditionally had a long tail of other customers, including independent cash and carry outlets, who were never going to aspire to automated EDI because of cost, technical issues or a lack of know-how or desire to place orders using EDI.

“These customers were sending pdfs and email attachments as the output from their ERP systems. We would have to print off and rekey the information into our ERP system. There was lots of time involved. It was not the most efficient way to do things. We had to staple printouts to a matching internal form showing the customer number and SKU. It was so time-consuming and repetitive, and there was always the opportunity for human errors creeping in through mistakes in transcription. We kept asking ourselves if there was a better way to manage these longtail issues, an easier, more automated way. If we could achieve greater automation we knew it would free people up for more added-value tasks and create an opportunity for better customer service.”

Moving to improve: identify what to put right  

A project to improve matters was scoped and proposed by Julie’s colleague John Thompson, AG Barr’s Integrated Systems Manager and Business Process Lead. John compared the error rates in documentation between partners using EDI and those who were not.

“I found there were far more human errors where the customer was relying on sending us PDFs and email attachments,” says John. “Rectifying errors typically entails issuing credit notes for returns and fulfilling mistaken orders. We confirmed that the proportion of credit notes issued to those not using EDI was much higher than for the rest of our customer base. The industry average for raising a credit note is £25.  To rectify a mistaken order, you have to take into account the lorry journeys there and back and the time involved in double-picking. It obviously adds cost.”

The business case: identifying cost savings

John and his team put together a proposal to implement a new cloud-based Paper-to-Digital EDI platform from Transalis.

“We prioritised ten customers who between them were typically averaging 50 orders a day. Based on our non-EDI-user error rates, we were looking at around 367 credit notes a year between them. That’s an average of 30 to 40 credit notes each. Sorting these took an average of ten minutes an order, that’s 11 hours a week of non-value time, or 572 hours annually. We predicted that moving these ten customers to the Transalis solution would potentially save £9,000 through the avoidance of credit notes, with up to £6,000 on other associated savings, so £15,000 in all. We calculated that if we reduced the amount of credit notes by just 5% it would pay for the investment in Paper-to-Digital EDI. I took the business case to our capital committee and finance and IT teams. We got the go-ahead because our analysis had confirmed that small customers do indeed add complexity and can sometimes end up demanding a disproportionate amount of care and attention. We showed there is a considerable saving to be had if you can minimise the time and energy involved in sorting credit notes and returns.”

Implementing Paper-to-Digital EDI: demo, trial and roll-out

After the initial customer demo, which persuaded him of the benefits of Paper-to-Digital EDI, John used the offer of a month’s free trial of the platform. AG Barr ran an initial pilot with one trading partner, Carlsberg’s outsourced distribution arm. The success of this implementation gave John and Julie the reassurance required to add to the platform and embed it within business processes.

“It gave us the confidence to crack on, size it all up and engage the others on our priority list of ten,” says John. “We were keen to show we could maximise time and cost savings and make better use of our people.”

John says: “The internal resource involved in the project included our master data team of three, our customer support team of seven, and Julie and me. The master data team set up the processes in the system having understood the kind of information required to keep it flowing. We also did in-house training for the customer support team.”

Julie says: “The technical challenge was to map the input, ensuring the essential information was in place such as the item number, quantity, order date and requested delivery date. We were then able to train the customers on that. The project started in October 2017 and we had all customers live by May 2018. We did it in stages over the nine months, incremental from start to finish. We needed to do the initial pilot so we could be convinced that the system would work, enabling orders to go to Transalis and come back as EDI files.”

Benefits and ROI: ‘infinitely better than manual keying’

All ten of the priority trading partners are now being managed through the Paper-to-Digital EDI platform.

Everything now runs on the Transalis cloud with PDFs and other email attachments translated into proper EDI format and accessed through ODBC or ‘open database connectivity’, something AG Barr is used to in its production processes.

All the data processing involved has been automated and streamlined, enabling AG Barr’s administrative resource to be reallocated to more valuable tasks.

John says: “The benefits have gone beyond our original case about the cost of credit notes. Being able to put orders automatically into the system is a big timesaver for all aspects of operational correspondence. The platform has made life easier for our customer service team. It really has made a positive difference. We are seeing ROI by having people focused on more value-added activity. Customer ratings and feedback also show we have improved customer satisfaction levels.”

Julie agrees the benefits over manual processes are clear. “You can be facing daily orders running to 80 or 90 lines from some customers. It can be difficult to keep on top of that with a manual system. You need to know the specific SKU you are ordering each time, otherwise there is potential for mistakes. The EDI system splits it all into data loads which is infinitely better than manual keying.”

Paper-to-Digital EDI savings:

  • £15,000 annual saving on processes with ten priority customers
  • 5% improvement covers investment spend on project
  • 572 man-hours saved annually for higher-value operations

Advice for others: go step by step and choose a good partner

Julie’s advice for other companies looking at using OpenEDI™ from Transalis with customers is to go for it, but she adds: “Do a reasonably small pilot and pick customers you’ll get most benefit from, those who order all the time. Be bold in your choice of customer. Go for ones who, once it becomes a standard process, will appreciate it. I’d say do it step by step to keep everyone on board.”

John adds: “It’s important that your customer services team is on your side. With us, the team understood that this was about freeing up time and getting rid of non-value-added activity, not about reducing head count.”

John describes Transalis as ‘genuine partners’, adding: “In one case they were three-quarters of the way through implementation and unfortunately the customer went out of business. Several days of development work had simply gone down the drain, but they just took on an alternative customer without any complaint or extra charge. They have been really easy to work with, very helpful. They are great at keeping in contact. They put their finger on what we knew had been a pain and pinch-point for a number of years. Our contact with them came at exactly the right time as we looked to improve our processes, do some business process engineering and upgrade our EDI.”

On technology matters, John adds: “The Paper-to-Digital EDI solution is really well written. It is easy to pick up and run with, making understanding and training very easy. It’s very intuitive.”

If you feel you would benefit from Paper-to-Digital EDI from Transalis, why not talk to us? You can reach us on 0845 123 3476 or go to EDI Product Bundles