SAP Business One the foundation of a B2B platform

Polska Dystrybucja Budowlana is a nationwide distributor of building materials from many major manufacturers. The company represents an interesting business model – it unites more than 600 small and medium-sized wholesalers from all over Poland. By purchasing commercial goods together and representing a strong business group, it has a better bargaining position, generates savings and is a competitive player. In addition, it creates services that differentiate its offerings in the market. As an example, it offers Construction Advisor 24. PDB offers support for the entire construction project: from expert advice, timely delivery of appropriate materials, recommendation of subcontractors, and ensuring the continuity of the investment by coordinating the work of individual contractors.

An important measure aimed at strengthening the company’s competitiveness in the market was the project to launch a B2B platform for business partners – suppliers and customers. For the implementation of this project, Polska Dystrybucja Budowlana obtained funding from the European Regional Development Fund under the Innovative Economy Operational Program, 2007-2013. 7milowy company from the BCC Group (currently All for One Poland) became the implementation partner and solution provider. After analyzing the needs, it was decided to use the integrated system SAP Business One. The solution was to serve as the basis for the construction of the B2B portal, its data source, and to become the basic solution supporting the integrated management of all areas of the company.

The most important goals that PDB management set for the implementation project were to strengthen cooperation with suppliers and customers through a modern and convenient form of contact, such as an online portal.

With regard to the SAP Business One system, management expected to improve the quality of the company’s data (especially access to real margin information), systematize commodity data, increase the speed of data processing and access to reports, prepare the system infrastructure for new projects and the company’s growth, and ultimately increase its value.

The first step was to launch an ERP solution. SAP Business One was put into operation in March 2014. In parallel, work was underway to develop a dedicated B2B portal, which was based on the implemented ERP system. The platform was made available to PDB customers and suppliers in September 2014.

New quality in customer service

The B2B platform prepared by BCC is a modern channel of communication with suppliers and customers. The solution has improved the quality of service to external partners, streamlined internal commercial processes and allows orders to be processed faster.

Through the platform, partners-customers can browse the assortment, check the availability of goods and their current price (taking into account the terms of trade and discount thresholds applicable to the partner), add and edit items in the shopping cart, and approve or cancel the cart. An order for the goods is then created and registered in the B2B solution.

Both suppliers and customers can also check the current balance of settlements with PDB.

The portal supports the exchange of information through a standard electronic document interchange (EDI, Electronic Data Interchange) format. A partner (supplier or customer) can send orders, purchase orders, bid and delivery documents and invoices directly to the B2B system via EDI. In addition, it can obtain confirmation of the sending and receiving of documents. In the future, it will also be possible to easily integrate the portal with further EDI systems of new trading partners.

By using the EDI standard, the portal also provides an excellent repository for documents exchanged with partners: invoices, orders, etc.

Integrated ERP system

The source of current data on inventory levels, billing balances, and price lists for PDB contractors is the SAP Business One core system under the B2B platform interface. This system supports all key areas of the company: finance, purchasing, customer service, warehouse management and sales and distribution. In addition, a narrow scope – for the needs of the paint mixing plant – has been set up to handle production.

As part of the implementation project, 7milowy also launched an application integrated with SAP Business One and recommended by SAP (the so-called “add-on") for handling HR and payroll processes.

Agnieszka Waleń-Wosiek, Head of IT and Projects Department, Polska Dystrybucja Budowlana

SAP Business One – faster and more efficient operations
As a rapidly growing company, we needed a solution that was robust yet flexible. We chose SAP Business One because it is a system that binds all areas of the company’s operations together. We have wholesale and retail operations that require different system solutions. SAP Business One enabled us to create solutions for these different branches of business.
Each implementation is a difficult process for the entire company. 7milowy (currently All for One Poland) accompanied us throughout the project. The implementation required a tremendous amount of work on the part of the Board of Directors, managers, IT staff and employees who had to work on the new solution every day. Only by understanding the need for change and the intensive work of the entire team was it possible to move the entire company to the new system relatively quickly and matter-of-factly.
The implementation brought tangible benefits in various areas of our company. At the Board level, cross-cutting reporting and the ability to create new reports allows for better business management. The introduction of approval paths and the reduction of waiting times for margin approvals or the automation of credit limits has allowed many operational staff to work faster.
Maintaining the status quo, however, does not satisfy us. We are constantly working to develop the system. More suppliers are eager to join EDI, and customers to use the B2B platform. We are constantly thinking hard about new functionalities that will help us operate more efficiently.
Agnieszka Waleń-Wosiek, Head of IT and Projects Department, Polska Dystrybucja Budowlana

Sales and distribution

Due to the nature of PDB’s business operations, the first focus was on supporting sales and inventory management processes. SAP Business One supports the employees of Polska Dystrybucja Budowlana in the processes of collecting demands, monitoring inventory levels and availability, as well as handling bulk purchase orders and optimizing deliveries.

The solution is very flexible when it comes to pricing, developing special price lists, the ability to establish discounts and bonuses. This allows you to automatically manage quantities, cash and discounts for individual customers on a transaction-by-transaction basis. In the construction industry, where in wholesale trade the final prices are subject to frequent changes and adjustments, depending on many factors – this is a particularly important functionality.

Markups – or how not to tell from the pipes

PDB makes sales through three primary channels:

• Retail and wholesale sales from their own building depots (direct sales),
• Construction consultants (service “Construction Advisor 24") – orders within the framework of supervised investments,
• Wholesale – supplying construction wholesalers and large construction projects.

With regard to the latter two channels, the main task of the system is to control the marginability of individual transactions. The construction industry is highly competitive, with relatively low margins on the product. Reliable data for preparing commercial offers and calculating margins, as well as real control of final margins by transaction, investment or customer, are among the most important goals of the system’s implementation in PDB.

The system provides data at the stage of preparing a commercial offer and estimating and calculating own margin, taking into account transport costs, services, bonuses. This allows traders to prepare competitive offers, guaranteeing the presumed level of profitability – which reduces the level of business risk.

During the execution of individual orders, and of course after their completion, it is possible to check the margin level both for individual transactions or goods, and globally for the entire investment – taking into account the actual prices at which the goods were sold to the customer. Despite the fact that much of the data used in margin calculations changes dynamically, it has been possible to achieve the effect of constantly updating the business conditions in the system.

Another important function of the implemented solution, aimed at controlling financial flows, is a mechanism for keeping an eye on the level of customers’ margin and credit limits, and blocking the order when the boundary conditions are exceeded. If the current margin level is lower than expected, the customer has exceeded the due date or credit limit, the system blocks further service by the coordinator. Further service to the customer requires a decision by a senior manager. An appropriate approval path has been defined in the system.

Business analytics for accounting

SAP Business One has a financial module combined with controlling functionalities, which supports the work of the Finance and Accounting Department, helps manage budgets, receivables and payables, and cooperation with banks. Built-in standard reports (Business Intelligence solutions) help users in their daily work, and an available module for creating new reports and analyses allows cross-sectional reporting for the company’s Management Board.

In Polska Dystrybucja Budowlana, the system additionally supports the handling of business financing elements, such as factoring and insurance settlement of construction transactions. The system’s financial module maintains information on the financial parameters of contractors.

Mobile storage

Monitoring inventory levels, as well as tracking stock transfers and updating the status in real time, gives knowledge of the current availability of goods.

The implementation also included the preparation of a mobile solution for terminals used by warehouse workers. The application, which uses data collector tools, allows the creation of a delivery directly in the order reference.

Process automation, margin control

The entire customer service process – from making a business offer available on the portal, through ordering, sales, delivery, as well as invoicing and payment – now takes place in a single, integrated tool – the SAP Business One system.

Gaining control over cash flow and ongoing control over the profitability of transactions (margin tracking) are the main benefits of implementing an ERP system.

The SAP system, which is the global standard for integrated management, provides an opportunity for the future to strengthen relationships with suppliers even further. The company is already considering the benefits that could result from integrating orders or inventory with the industry’s key building materials manufacturers.