Tap the power of the Internet - Company Operations

Communications News, Feb, 2001

State-of-the-art e-business infrastructure can cut costs, improve productivity and build customer relationships.

Mitsubishi International Corp. (MIC) wanted to reduce operating expenses, improve productivity and build closer ties with its 30,000 suppliers and customers in its Foods Division and Chemicals Group.

The Foods Division has developed an international network connecting food producers with food consumers around the world. The Chemicals Group exports commodity chemicals, plastics and fertilizers to Japan and other Asian markets, while importing specialty and functional chemicals and engineering plastics into the U.S.

Mitsubishi faced the challenge of establishing a state-of-the-art e-business infrastructure that would result not only in cost savings for the two divisions, but also enhance the value of the company as a whole. Penalties for paper processing from food manufacturers alone were starting to cut deeply into MIC's profits.

"Mitsubishi's objective to develop an e-commerce strategy that will tap into the power of the Internet should help the company achieve true operating efficiencies throughout its supply chain," says Keigo Ando, manager, EDI/EC applications at MIC.

Establishing an infrastructure that would position MIC for the future and improve customer and supplier relationships was a huge undertaking. MIC chose Peregrine Systems e-Business Connectivity Group.

E-BUSINESS SOLUTIONS

The first step was to assess MIC's current work environment. Peregrine Professional Services worked closely with MIC to assemble and implement the most effective combination of e-business solutions for customers and suppliers alike.

After the assessment was completed, MIC leveraged several Peregrine solutions to create its e-business infrastructure. MIC installed TrustedLink, Unix edition, as its translation and mapping software, and Templar as its TCP/IP messaging software for secure communications via the Internet. TrustedLink integrates with MIC's ERP system, SAP R/3, preserving its existing infrastructure investment. To transmit the purchase orders and invoices necessary to conduct business with suppliers, MIC also took advantage of Get2Connect.net, Peregrine's e-commerce portal. The portal provides secure transaction and content services, as well as an online tool, Network Inspector, to track and manage transactions.

"For MIC, it just made sense to put our network traffic on Get2Connect.net," Ando says. "The portal allows for a seamless Value-added network to Internet connection, as well as a variety of transport options. And, Network Inspector makes maintenance and monitoring easy and convenient."

To make the new infrastructure complete, MIC also installed Express, a low-cost Web-based solution designed to reach suppliers who do not have a complete e-business infrastructure.

E-BUSINESS AT WORK

Once the implementation was completed, MIC tested its e-commerce capabilities within two of its divisions. In the Foods Division, MIC used the solutions to receive purchase orders (POs) from food brokers, which they verified using SAP. MIC also input invoices into SAP and sent the data electronically to brokers and customers. This process helped MIC avoid penalties and eliminate time associated with paper and manual processes.

The Chemicals Group also enhanced productivity and saved money with e-business. MIC customers are now able to input their sales forecast data on the Express form located on Get2Connect.net and send it to the Chemicals Group. Once MIC receives the forecast, it can edit and send the forecast data, as well as POs and PO change requests, to suppliers.

Since implementing an e-business infrastructure, MIC has gained substantial savings and efficiencies. The Foods Division saved $80,000 per year per customer by avoiding penalties and improving accuracy. The Chemicals Group saved $590,000 per year by avoiding manual work and improving productivity. The projected cumulative savings for five years amounts to $3.4 million.

Due to the success of MIC's e-business initiatives, the company plans to share the benefits of e-business by becoming a business-to-business infomediary, matchmaking the information between buyers and sellers on the Internet.

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