Digitalisation encounters a small producer: more competitiveness and benefits worth millions

Starting point

Digitalisation meets small and medium-sized businesses

Consumers have shown increasing interest in, for example, local food, and stores wish to meet the demand by including the products of small producers in their product range. In order to succeed, small suppliers have also had to adapt to the order-to-delivery processes of trade groups. The lack of electronic connections and the deployment costs of traditional solutions have obstructed the access to the product range in stores.

Finland was one of the first countries in the world to adopt online data transfer in retail trade logistics. However, only the major trade operators have been able to benefit from this development, as the requirements of digitalisation have seemed insurmountable for many small and medium-sized businesses.

The objective was to be able to quickly trial, test and validate the design hypotheses that had been prepared and as a result to ensure that the idea would actually work and serve the customers.

Golli was started to improve the order-to-delivery process of small and medium-sized businesses in a cost-effective manner. Instead of heavy system solutions, ERP systems and increasing IT costs, it was clear that a new digital business model would be created using a cloud-based scalable solution that could be implemented quickly and easily. As the operating models of small and medium-sized businesses deviate from one another, the focus was on user understanding and requirements with the help of service design methods and agile development methods.

We started by investigating the everyday operations of trade operators and food producers, such as importers, breweries and bakeries. Several problems, such as lack of electronic connections in the delivery chain, package markings not complying with the standard or lack of EDI messages were indentified.

From the outset, the vision was an electronic service that would aim to achieve significant cost savings and improve the competitiveness of Finnish small and medium-sized suppliers. Nearly all Finnish food industry companies, that is retail suppliers were identified as potential users of Golli. Depending on the calculation method, the number of potential users in Finland is 1,700–2,000. The majority of companies have 1–4 employees, and there are no resources to carry out the digitalisation of their own operation.

IMPLEMENTATION

Service into production in record time

From the start, Solita began to create Golli together with the customer and an extensive interest group taking the opinions of end users into account.

Work on the ambitious vision was started by constructing a prototype of the service that was used for testing the idea from the users’ perspective. The prototype was tested in 10 small and medium-sized food industry businesses around Finland. The piloting and testing of the prototype confirmed the impressions of the necessity of the new service, and the fact that it would be challenging. Would a complex ecosystem, differences between users and the unlimited range of wishes turn the project into a never-ending project even if it was off to a speedy start?

We set an ambitious objective for the service development: the new service should prove its functionality within six months.

The deployment was carried out by testing and trialling according to agile methods and lean principles. According to the objectives, the service was launched within six months after the start of the project in December 2015, and Golli was successfully adopted in several companies right away.

Easy-to-deploy and easy-to-use service

The deployment and use of the service is extremely simple, easy and quick, and it can be carried out with ordinary office tools and a network connection. Golli saves time and money both in small and medium-sized businesses that supply products and in terms of the logistics of major stores: Using Golli costs less than two euros per day for a supplier. It makes order, delivery, logistics, invoicing, monitoring and reporting processes faster and easier and improves the communication between various parties. The service increases the competitiveness of Finnish small and medium-sized businesses and improves the everyday lives of us all by improving the versatility, freshness and safety of the available range of food.

With the help of Golli, a supplier can:

• Receive and confirm an electronic order
• Collect products using a preferred method
• Print standard serial shipping container codes (SSCC)
• Create an electronic delivery order
• Send an EDI message
• Create an electronic consignment note
• Invoice the customer
• Ensure continuous monitoring and tracing of products (to be introduced in 2016)

An ecosystem of interfaces and services

Golli is not only a user interface, but an ecosystem of interfaces and services to which the company’s existing digital services and systems can be connected in various ways. In addition, the ecosystem approach enables creating added value services around the Golli core. For example, the Internet of Things solution can be connected to Golli and thus, the supply chain can be automated. At the initial phase, the food industry and retail trade were selected as the main target group but Golli is suitable to any industry. In the years to come, hundreds of customers are expected to find the benefits offered by Golli.

Benefit potential worth millions

Golli has changed the retail trade industry. The service is socially important as it will help ‘instant digitalise’ Finnish small and medium-sized businesses and improve the competitiveness of Finnish companies by providing suppliers with new business operating opportunities.

Potential cost effects achieved by the Golli service are significant within the industry. Specific computational figures cannot be revealed due to competition-related reasons, but the potential of cost benefits in the order-to-delivery process is as much as MEUR 17 a year based on the average benefit achieved by trade groups. Benefits can be calculated for each trade group based on the amount of time used currently on manual labour and the costs of working hours.