EDI Cushions OEM/Retailer Relationship

One purchase order can now be filled by multiple plants, taking the tension out of this bed maker's supply chain.

Sleep Innovations knows a thing or two about resting assured. That's exactly why this multimillion-dollar manufacturer of foam bedding and sleep products needed the right EDI system to seamlessly integrate its OEM plants and retail trading partners.

In its plants, Sleep Innovations manufactures three brands of sleep products — Novaform, Personal Expressions and Comfort Plus. Additionally, it creates similar products under private label programs for major retailers, including Target, Sears, Kohl's, Costco and Overstock.com.

In 2007, the company acquired a new division of eight plants, bringing its total manufacturing locations to 11. The legacy enterprise resource planning (ERP) software in those plants was not compatible with two of Sleep Innovation's key customers, resulting in inefficient, and at times impossible, exchanges of information. After some review, Sleep Innovations also realized its existing ERP was inadequate for meeting the company's growing demand.

EDI for B2B integration

To meet its customers' growing requests, Sleep Innovations implemented Oracle's JD Edwards EnterpriseOne ERP suite. However, its legacy EDI system could no longer manage all the transactions required in the company's supply chain process. This was because the existing EDI system could not handle certain EDI transactions demanded by customers.

“Ninety percent of our business goes through EDI, and we required something more comprehensive and flexible so that we could satisfy any demand our customers have,” says Malek Shamoun, chief information officer of Sleep Innovations. “In a short period of time we needed to find an EDI package that could handle our EDI and B2B integration needs.”

After a review of available EDI packages, a consultant recommended EXTOL EDI Integrator to Sleep Innovations. The solution's ability to simplify and automate business processes in real time was important to Sleep Innovations. Plus, the software's ability to deliver EDI collaborations that integrate with applications and IT resources across various platforms was vital to the company's continued growth.

“It integrates various aspects of EDI such as purchase orders and invoicing in EnterpriseOne without the need for custom programming,” Shamoun says. “It also allows us to tailor the B2B/EDI process for each customer and its unique requirement for supply chain management.”

In Bed with EDI Integrator

When Sleep Innovations receives an inbound transaction (purchase orders), the new EDI system takes the data from an external customer source and converts it into a format compatible with the ERP. Similarly, outbound transactions (invoices) that originate in the ERP are processed by the EDI system and converted back into a format acceptable to the customer.

In a nutshell, here's Sleep Innovations' new order-to-ship process:

A customer sends Sleep Innovations an EDI purchase order.

The EDI system receives the purchase order and automatically sends acknowledgement of receipt to the customer.

The EDI system connects the order data with the ERP system, which generates the official customer order and invoice.

When Sleep Innovations is ready to ship the merchandise, the EDI system produces an advanced ship notice and sends it to the customer.

Sleep Innovations' new EDI system can coordinate more complex transactions and shipping scenarios in real time. It does this by routing individual line items on purchase orders to different manufacturing units. For example, customers often send Sleep Innovations one purchase order. When that order arrives, it needs to be filled with inventory from four different facilities.

“Order fulfillment is simplified by dividing the purchase order among the appropriate plants and feeding it into the ERP according to those parameters,” Shamoun says. “Then we don't need to worry about anything.”

For example, if a customer requires such a transaction, Sleep Innovations fulfills the order, then the EDI software puts all the orders back onto one invoice for the customer and sends it out, completing the process.

The EDI system can also work with various ERP modules as needed, including sales analysis, inventory, transportation and product configuration.

Future Integrations

While Shamoun and his team have three of the 11 Sleep Innovations manufacturing plants fully integrated with the EDI system, he plans to have all of the locations fully integrated by November 2010. Sleep Innovations also plans to implement this system into its corporate headquarters in the near future.

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