Success Story: Electrolux

Reduced Costs and Better Business Agility through Axway Supply Chain Integration

  • Headquarters

    Stockholm, Sweden
  • Industry

  • Challenge

    • Reduce operating costs, improve performance and maintain competitive edge
    • Consolidate handling of customer and supplier processes and integrate customer and supplier applications
  • Solution

  • Results

    • Improved business agility and flexibility 
    • Simple, robust data-exchange management
    • Centralized communication management
    • Lowered costs while expanding trading relationships
    • Reduced downtime

[With Axway supply chain integration] we have created a standardized, centrally installed platform that will require less maintenance in the future. During the past few years, we have been able to double our business partners and cope with an enormous increase in messages without having to employ new staff.

 

Extended Supply Chain Integration Strategy Supplies Business Flexibility

For more than 90 years, Swedish-based Electrolux has been a global leader in home appliances as well as appliances for professional use, selling more than 40 million products to customers in 150 countries every year. Like most modern companies, Electrolux must adapt to meet changing business requirements. The company uses aglobal IT integration strategy to achieve the degree of flexibility needed to implement business strategies quickly. Its core integration solution is the Synchrony family of products from Axway.

Challenges

The focus of the Electrolux integration strategy was regional until a few years ago.Today, its strategic perspective is more global, due to its expansion into EasternEurope, Asia, and America. However, this global expansion has presented its share of challenges. First, the company’s supply chain is massive, consisting of more than 5,000 customers, suppliers, logistics service providers and banks as well as roughly 450 internal applications, from ERP and CRM to transport management applications.

Electrolux considers the integration of these external business partners as the nerve center of the company. Consequently, all data exchange and communication processes must operate like clockwork. Nearly 1,000,000 messages per month – invoices, orders, article and customer master data, delivery instructions, delivery previews, and payment notifications – need to be sent through the global network. Many orders and deliveries are synchronized according to just-in-time strategies. Therefore, downtime or interruptions cannot be tolerated.

Since various trading partners support different communication protocols and standards, secure transmission is also a challenge. Consequently, messages must be translated and consolidated before being transferred, without any significant time delay. In addition, the challenge of promptly managing cooperation with logistics, forwarding agencies, and shipping companies applies to the delivery process.

Another key challenge is managing change. For example, the transfer volume of messages and the number of message types are constantly changing. A few years ago, 40 different types of EDI messages had to be supported. Now the company supports over 90. These include EDI types such as EDIFACT, ANSI ASC X.12, ODETTE, and TRADACOMS standards as well as message types based on XML. In addition, new trading partners come and go. Further, bank interfaces as well as secure data communication with all financial service providers must be modified, based on standard banking trading agreements. Mergers and acquisitions also create organizational changes that Electrolux needs to reflect in the supply chain system. Given this environment of change, it was not practical for Electrolux to restructure IT systems with each new change.

The company required an IT strategy that takes this fluid environment into account and a software platform with the flexibility to help Electrolux quickly adapt itself to market conditions.

“The integration of external business partners into our internal areas is the nerve system of our company.”

 

Solution

To address its supply chain integration concerns, Electrolux turned to Axway. The Synchrony™ solution from Axway—specifically the Synchrony Gateway, Synchrony Integrator and Synchrony Transfer products—have become the core integration platform for Electrolux. Axway’s Synchrony solutions not only allow the company to cope with current requirements, they also provide enabling technology to contend with new and future challenges.

Electrolux now uses Axway as its central communication switch point. With a few mouse clicks, managers can define routing rules, such as who is to receive what message, when, and how. Now data can be validated and formats translated and encrypted quickly. The entire transfer is automated; even the different character sets in Europe, America and Asia are exchanged without user intervention. If the company had to rely on conventional point-to-point connections—where every application connects to every other application with which it communicates—the company would be unable to cope with its ever-increasing communication demands.

Another communication issue that Axway also helps to address is EDI-based data exchange. Many Electrolux products, assemblies and individual components are produced in Eastern European countries, where, due to the partner company size and budgets, only rudimentary communication systems exist. In most cases, fax and emails are the standard communication media, and in-place EDI systems are a rarity. However, relying on fax and email to exchange real-time information creates extreme media discontinuity.

Axway is responsible for secure communication over the Internet via AS2 using the Synchrony Transfer application in combination with Synchrony Secure Relay. This practical solution allows communication via a Web-based EDI portal, integrating these companies as part of the Electrolux global supply chain. The partner company is given access to a trading portal via the Internet and can access required information, such as delivery forecasts, delivery instructions, parts, and quantities. The portal supports Electrolux partners that do not have, or do not wish to implement, an EDI-based integration. This facility will allow quick start-up with suppliers and show promise for immediate supply chain improvements.

“With our slim production processes based on the division of labor and accordingly optimized logistics, data communication must work in real time, as required by the process.”

 

Results & Benefits

With the implementation of Axway solutions, Electrolux now has a technology platform with proven ability to support the company’s current and future supply chain integration requirements. Thus far, Axway has yielded several benefits, including:

  • Business agility and flexibility. The integration strategy based on the Axway platform provides Electrolux the agility and flexibility it needs to adapt quickly and effectively to changes. Whether there is a new trading partner, another data format that needs to be supported, or a change in the production process, Axway solutions can adapt to changes quickly and effectively at all times.
  • Simple, robust data exchange management. Electrolux can now manage high data volumes and a wide range of data types, including EDI types such as EDIFACT, ANSI ASC X.12, ODETTE, and TRADACOMS, as well as message types based on XML.

  • Centralized and secure communications switch point. Electrolux managers can now graphically define the routing rules to validate data and automatically and securely translate and encrypt formats.

  • Lower maintenance costs while expanding trading partnerships. With Axway as the standard, centrally installed platform, Electrolux has been able to double its number of business partners while managing massive increases in messages without having to add significantly new staff.

  • Web-based interface for partners. The Axway solution allows communication via a web-based EDI portal, helping to effectively integrate partner companies as part of the Electrolux global supply chain.

  • Increased development speed and quality improvement. The centralized Axway platform has also sped the development and quality of partner integration, resulting in improved business service. This higher quality of internal and external communication is due to the small number of manual interventions.

  • Reduced purchasing costs and centralized order monitoring. The company has been able to centralize the recording and assignment of orders for procurement in order to take advantage of volume discounts and to optimize the supply chain. Synchrony Integrator serves as an external interface, for all carriers, shipping companies and forwarding agents. This approach also allows managers to track the exact delivery status and to quickly determine the location of a particular container for specifics retailers.

“. . . we have now created a standardized, centrally installed platform that will require less maintenance in the future. During the past few years, we have been able to double our business partners and cope with an enormous increase with messages without having to employ new staff to the same degree.” 

 

About Electrolux

Electrolux is a global leader in home appliances and appliances for professional use, selling more than 40 million products to customers in 150 countries every year. The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers sold under esteemed brands such as Electrolux, AEG-Electrolux, Zanussi, Eureka and Frigidaire. In 2007, Electrolux had sales of SEK 105 billion and 56,000 employees. For more information, visit http://www.electrolux.com/press.

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