Tewksbury, MA April 3, 2002 Supplier enablement has emerged as a key issue in the move toward e-procurement, with the inability of many suppliers to connect to their large customers' enterprise resource planning (ERP) systems hampering the move to total e-purchasing.
Now Eastman Chemical Co. is attempting to address this dilemma by deploying a procurement solution from Yantra to automate its purchasing processes with its small and midsize suppliers.
Many of Eastman's suppliers do not have the technological infrastructure to allow for an electronic data interchange (EDI) or XML connection to the chemical giant's SAP R/3 ERP infrastructure. These suppliers represent up to 30 percent of the company's total direct procurement spend and 70 percent of its indirect spend. Until now, most transactions with these suppliers were transmitted via manual or automated fax from SAP R/3.
But now, with Yantra's Supply solution, Eastman is automating its purchase order process for both direct and indirect procurement with up to 1,000 suppliers that do not plan to build a direct connection to Eastman's SAP ERP system.
Eastman's buyers execute purchase orders in SAP R/3, which is now connected to the new supply hub. The Eastman suppliers are automatically alerted to each new purchase order via Yantra's alert and event management capabilities, and they use a standard Web browser to accept, process and respond. The data then flows directly back into Eastman's SAP R/3 system.
The payback is increased efficiencies in procurement operations, with transaction times and costs reduced by as much as 50 percent.
"At Eastman, we're looking for every opportunity to gain efficiencies across our supply chain and our small and medium sized suppliers represent a significant part of our direct spend," said Kendra Harrold, e-procurement manager at Eastman. "Yantra's application streamlines the purchase order process for everyone involved, making it significantly more efficient for Eastman and our suppliers."
Previously, in 2001, Eastman had licensed Yantra's Demand solution to manage distributed orders and inventory for its dealer-trading hub.
Headquartered in Kingsport, Tenn., Eastman Chemical Co. manufactures and markets chemicals, fibers and plastics. Eastman employs approximately 15,800 people in more than 30 countries and had 2001 sales of $5.4 billion.