Business challenge

To prepare for growth and reduce its exposure to risk, Coastal Pacific wanted a scalable, secure and cost-effective way to process millions of EDI transactions between more than 700 military partners.

Transformation

Coastal Pacific seamlessly migrated 3.5 million EDI transactions to IBM Sterling B2B Integrator—enabling high levels of performance and availability for mission-critical message transfer.

Results

3.5 million

EDI transactions processed on a single platform

60%

reduction in manual administration requirements

Avoids 4x

increase in EDI team headcount

Business challenge story

Delivering just in time, every time

For distributors with worldwide logistics networks and demanding just-in-time delivery requirements, the ability to process orders efficiently is essential. However, with millions of electronic data interchange (EDI) messages flowing between multiple stakeholders in the value chain, keeping business processes running smoothly poses complex technical challenges.

This was the situation facing Coastal Pacific, the world’s second-largest distributor of consumer products for the US military.

Pat Ranga, Vice President EDI/E-Commerce at Coastal Pacific Food Distributors, takes up the story: “The time window between receiving an order and then picking, loading and delivering it to the relevant commissaries is extremely tight. Often, our teaming partners have only eight hours between receiving and loading an order. Speed and precision are both vital—if we are unable to ship a product for any reason, then the commissaries will collect it from another distributor, and we lose the sale.

“Maintaining our fill-rate is important both to ensure that service personnel around the world get their favorite breakfasts, and to continue to win distribution contracts from our manufacturing clients year after year. These contracts can be worth several million dollars each, and many are renewed every one or two years. Remaining competitive means keeping our fill-rates well above the 95 percent threshold in our service-level agreements. Our philosophy is that one missed order is too many, and we typically aim for fill-rates of 99 percent or higher. Our goal is to never lose a sale because of technical issues with our EDI messages.”

Coastal Pacific is contracted to deliver more than 40,000 stock-keeping units (SKUs) from 700 consumer products manufacturers, and its buyers must constantly walk a careful line between over- and under-stocking its warehouses.

“If we order too much of a given SKU, we incur the cost of holding that stock in valuable space in our warehouses,” explains Pat Ranga. “If we order too little or too late, we run the risk of stocking out on a popular product, damaging our fill-rate. For that reason, our buyers need full visibility of the status of the purchase orders they have raised with the manufacturers.”

He continues: “The challenge we faced was the visibility of our messages. Whenever one of our manufacturing clients told our buyers that they had not received a PO, our buyers would have to email or phone me to look up the document and let them know if the issue was on our side or the client’s. Because we supply countries in very different time zones, there was always the risk that delays in responding to our buyers’ requests might lead us to miss a delivery deadline—and we looked for a way to solve the challenge.”

“IBM Sterling B2B Integrator helps us manage multi-billion dollar EDI transactions like clockwork.”

—Pat Ranga, Vice President EDI/E-Commerce, Coastal Pacific Food Distributors

Transformation story

Selecting a fresh approach to EDI

For more than 30 years, Coastal Pacific has relied on IBM Sterling Gentran® solutions as its EDI platform. Initially, Coastal Pacific considered upgrading its existing platform and integrating it with additional scripting tools to enable faster searching for the status of purchase orders in the system.

“Although Gentran had satisfied our requirements for many years, we predicted that if the business expanded and we took on additional trading partners we would need to expand our EDI team by up to factor of four to handle EDI information requests from the business—substantially increasing our operational costs,” recalls Pat Ranga.

Coastal Pacific looked for a cost-effective way to deliver greater visibility for its EDI messages. The aim was to create a self-service platform to enable its buyers to check the status of their purchase orders anytime, anywhere—supporting the company’s follow-the-sun workflow.

Pat Ranga says: “After evaluating a number of EDI frameworks on the market, we were confident that migrating from IBM Sterling Gentran to IBM Sterling B2B Integrator would enable us to meet our goals for a self-service platform. “For many large enterprises, migrating to a new EDI platform means a freeze on adding new trading partners until the work is complete—a situation that we very much wanted to avoid. By adopting IBM Sterling B2B Integrator, we calculated that we could continue to add new partners to both systems without harming the overall cost-effectiveness of the project.”

As a next step, Coastal Pacific engaged IBM Premier Business Partner Miracle Software Systems to help architect the solution and plan the migration process.

“Our work with the Miracle Software Systems and IBM teams helped us to complete our migration seamlessly—a major achievement considering the size of our trading-partner base,” says Pat Ranga. “We tested each of the EDI integrations for our 700 military partners and then migrated them from Gentran to IBM Sterling B2B Integrator. Because we were using the same URLs, the process was completely transparent to our partners—but the massive amounts of coordination and planning on our side meant it was almost as complex as changing an airplane engine while in flight!”

Results story

Reducing risk, ready for growth

Today, Coastal Pacific uses IBM Sterling B2B Integrator to process EDI messages for all of its military partners—totaling more than 3.5 million transactions per year. Thanks to the new platform, the company is achieving its aim of delivering self-service capabilities to prepare for future growth.

“In the past, our buyers had to call me to confirm if a trading partner had received a purchase order, which increased the risk of delays and missed orders,” says Pat Ranga. “Today, we offer our personnel a self-service portal to retrieve the status of any purchase order in real time. This helps our buyers to resolve issues on the manufacturing side rapidly and keep orders on track.”

He adds: “The feedback from our buyers has been extremely positive. One of the team even called to tell me how much easier she was finding it to plan her working day because it is so much easier to demonstrate to the commissaries that EDI issues are not occurring on our side.”

With IBM Sterling B2B Integrator, Coastal Pacific obtains all of the capabilities of its previous Gentran platform with substantially reduced management cost and complexity.

“Previously, if we were upgrading to a new communication protocol or applying a security update, we needed to find and install the software manually—a time-consuming process,” adds Pat Ranga. “Because we now manage our EDI in IBM Sterling B2B Integrator, all of these capabilities are built in—freeing us to spend less time on manual administration tasks and more time developing value-added services for the business. In fact, we estimate that our IBM solution reduces our administration requirements by 60 percent—enabling us to continue to deliver rock-solid EDI services to the business without the need to increase our headcount.”

Coastal Pacific’s new B2B integration platform helps it to meet the stringent reporting requirements of the US military.

“In theory, we could be audited on any single order that we have placed in the last seven years—even at the level of a single case of soup,” continues Pat Ranga. “IBM Sterling B2B Integrator captures metadata on all of our EDI transactions—including the time and date that we send outbound purchase orders and receive proof of delivery receipts. With our IBM solution, we gain the assurance that all of our data is readily searchable to help facilitate compliance with our client requirements.”

He concludes: “Every 15 days, we send out 14,000 invoice transactions to our manufacturers, which enables them to invoice the commissaries for the products that we have delivered. The total billing volumes can reach several million dollars, and we are liable for a financial penalty in excess of one hundred dollars for each invoice that is not sent out in time—so ensuring that our clients can send their invoices in a timely manner is vital. With IBM Sterling B2B Integrator driving our EDI processes, we can continue to manage multi-billion dollar EDI transactions like clockwork—enabling us to keep our fill-rates high and maintain our market-leading competitiveness.”

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About Coastal Pacific

Founded in 1986, Coastal Pacific Food Distributors is the world’s second-largest military distributor of food and related products, providing full-line service in countries including the United States, Japan and Korea, as well as procurement and logistics services in the Middle East.
 

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