BLOK System Supply - Electronic connection and personal relationship

Blok System Supply and itsme have maintained an intensive relationship for many years. Early last year, this was further deepened with electronic data exchange via the Smart Connected Supplier Network. ‘It saves an enormous amount of time and reduces errors. We always have real-time information automatically.’ However, time for personal contact is not saved. ‘That is precisely what makes itsme a very nice party to work with.’

Blok System Supply profile

Blok System Supply is an experienced supplier of mechatronic end products and sub-assemblies. The company has thirty employees, expanded to forty for projects if necessary. Blok System Supply uses advanced production techniques and offers both technological and logistical solutions. If required, it can take over and streamline their entire supply chain for customers. Blok System Supply serves OEMs in various markets with diverse applications, from robots, drones and AGVs to switchboards, welding presses and assembly machines, and from medical UV disinfection equipment to transportable biogas generators. 

Blok System Supply is based in Velsen-Noord. That is not the most obvious location for a mechatronic system supplier in our country, where Eindhoven, Twente and Delft are the centres of gravity in this field. But that is not the only thing special about the company, CEO Martijn Witteveen tells us enthusiastically. ‘In 2007, we started with simple assembly jobs and gradually grew into a full-fledged engineering and development company, providing production and assembly.

We serve 12 to 15 customers worldwide in the field of product development, from scratch to product improvement. Ultimately, we make prototypes, set up serial production for the customer and then handle distribution worldwide. We do this for many different markets, as long as it is a mechatronic product: mechanics with electronics and software. What distinguishes us in this respect is that we are a family business, so we are still truly entrepreneurial and without a corporate attitude. This allows us to act very flexibly.’

Availability

What makes Blok System Supply truly unique, Witteveen continues, is that it has everything in-house. ‘We don't just do assembly or engineering or distribution. No, we have all capabilities in-house. So we can create and also build a total product, and still do a lot of material processing ourselves. And we have a good supply chain, because that's actually what we do, supply chain management. Making sure the stuff is in house at the right time, so we can deliver at the right time at the right quality, read 100%.’

That's where itsme comes in. ‘Our relationship goes back quite a long time,’ Witteveen reports. ‘I am a big driver of the cooperation with them, think we should intensify and expand it and increase volume. We need to grow with them so that we have one supplier in their field that we can always rely on. Really partnering, creating an economy of scale, instead of sitting in the buyer's chair. A 5% lower price is nice, but ultimately it's about availability, predictability and reliability. I think we are nicely on our way to that.’ 

‘For us, itsme's knowledge is mainly on the process side, the logistics’ 

What Witteveen also appreciates is itsme's ‘think global, act local’ philosophy. ‘We regularly have pressures and then we quickly turn to suppliers close by anyway. The acquisition drive within itsme to expand their network regionally also appeals to me. With that, they meet our need, because that's just pure availability. The rest doesn't really matter, because the prices are just as good or bad as with others. It's all about service.’

Supplier itsme presents itself as a knowledge partner, Witteveen knows. ‘For us, their knowledge is mainly on the process side, the logistics. They understand what a company needs and in what way.’ Shane Koenen, consultant at itsme Connected Business, gives examples. ‘We started stocking a number of products for them customer-specifically in our Amsterdam branch, because we saw that delivery times for these products were long by default. With Blok, we have an agreement that they can call for, say, five pieces, but we already buy them in large batches. So we get better conditions and basically have the products available the next day when Blok orders them. Another example is a request from them to be able to work with a QR code on a relay. We discussed that with the relay supplier and developed that together for Blok. Now they can read such a relay in the field faster if there is a problem.’ 

Electronic Data Interchange

Early last year, the relationship between Blok and itsme deepened further with Electronic Data Interchange (EDI). To this end, a link was made via the Smart Connected Supplier Network (SCSN, see box). For the average 1,100 order lines Blok has annually at itsme, communication had to be further streamlined. From its ERP system, Bemet, which is connected to SCSN via the Gatewise platform, Blok can now automatically place orders with itsme.

It works well, says Hans Hageman, senior buyer/work planner at Blok. ‘It works very simply. If you know what to do, you fly through it, much faster than if you do it by hand; so it saves a huge amount of time. You also get the order confirmation back automatically and the prices are fixed, because you see them in the online environment. Moreover, you have fewer errors, because if itsme has to change a delivery date, for example, it is automatically updated with us as well. So we always have real-time information about the current delivery date.’ 
 

‘It works very simply; if you know what to do, you fly through it’ 

Not all communication goes through Gateway/SCSN. It now involves 80% of order lines and will not become 100%, according to Hageman and Koenen. Because Blok also orders from itsme specials and other items whose prices are not automatically maintained; there are also projects for which special conditions apply. In those cases, orders cannot be placed digitally. Furthermore, packing slips are not currently processed via SCSN, but that is an option for the future, says Hageman. ‘Point is just that the physical packing slip in the warehouse is now immediately used for checking upon receipt of the products. If you do it from a screen, it's less easy anyway. You can do it with a scanner, but who says it is always physically correct then. Moreover, there is still the distinction between itsme and our other suppliers, with whom we do not yet communicate via SCSN. I would really like to get there, but that also has to do with the difference in our purchasing volume, which is much higher at itsme.’  

VMI or not

Besides EDI, itsme has more options to streamline its services. Witteveen is keen on supplying complete assembly kits for certain products. ‘We have already investigated this once, but at that time it just didn't work out. I do foresee that if we have more repetitive work later on, we will go for this.’ One discussion that has not yet been settled concerns vendor managed inventory (VMI), where the supplier can take over the entire management of the grab stock.

Hageman knows that itsme would very much like this. ‘However, we have still held it back. Because we have now set min-max ourselves in our ERP system on various items.’ When these dip below the min, an order requirement automatically appears in the system and the items are reordered to itsme, for replenishment up to the max. Koenen understands Blok's stance. ‘However, I still feel that we as itsme can do better and then the number of order lines for Blok can come down,’ he says. 
 

‘I actually want to replace input control at Blok with output control at itsme’ 

Witteveen takes a middle position in this discussion. ‘The people in operations with us, Hans and his colleagues, think differently. Their arguments for not applying it are just too strong yet. But I think it does make sense.’ Hageman: ‘In my opinion, with the advent of Gatewise, the added value of VMI has only diminished. Because it has now become much easier for us to press the order button.’

This is true for the digital ordering mode, according to Koenen. ‘But you also always have the physical aspect of unpacking boxes and checking them. That still requires hands at Blok. What I actually want is to replace the entry control at Blok with the exit control at us.’ That is the eternal discussion, Hageman responds. ‘Every two weeks itsme comes to check the stock, but within that time our internal needs can already be completely different. Yes, then we can increase the stock level, but that also has its price; it remains a trade-off. We are now excellent at filling our own VMI with Gatewise.’ 

Doing business together

This is how the partners keep each other on their toes, which Witteveen welcomes: ‘Last year we had a discussion about our payment behaviour towards itsme. Then I also talked about delivery behaviour from itsme towards us. That's just the way it works. You try to run as good a business as possible together and it's okay to sail close to the wind. This also says a lot about the maturity of our relationship. I am very much a collaborator and find it much more important to build real partnerships than a good transactional relationship. Even outside work, we sometimes have a good time. And that's important when you do a lot of trading together.

For me at least, the personal contact makes itsme a very nice party to work with. It should be business together rather than a customer-supplier relationship. For instance, I have a really good relationship with the founder, Peter Leeflang, and can interact very well with his successor, Taco Leeflang. They are just entrepreneurs, hands-on people who just keep going and see opportunities to improve and optimise everywhere. You can see that in their people.’ 

Smart Connected Supplier Network

Electronic messaging has existed under the name EDI (Electronic Data Interchange) for a long time. Initially, in the industry it involved one-to-one links between customers and suppliers for exchanging order-related information between ERP and other software systems. For parties with a lot of relationships, such as technical wholesalers, that meant establishing a lot of links, says Paul Roodnat, manager E-Business at itsme. ‘We started creating links with suppliers and customers with our E-Business department in 2005 to automate as much as possible of the message flow. This is to minimise the need to double-enter information by hand, with all the risk of errors that this entails. In the manufacturing industry, many of our large customers work with SAP, but in smaller companies you see many different ERP packages. As a result, there was no standard and every link was a lot of work.’

Digitisation of the chain

Over a decade ago, digitisation in a broader sense was high on the agenda in the Dutch manufacturing industry, under the name Smart Industry. But it took a while for movement in the EDI field, Roodnat observed. In 2016, ‘The Smart Connected Supplier Network’ (SCSN) was launched as a Smart Industry field lab, with the aim of digitising the chain. ‘I was happy about that, because for the industry there was nothing so far. But in the beginning it was mainly a talking shop.’ All that talking did eventually result in a standard for digital messages such as orders, confirmations and invoices. However, it took until 2021 to set up an infrastructure for exchanging those messages. ‘A good thing that this came about. That was in fact the weakness in the installation market, where itsme also operates. There, they had agreed on a message standard, but no standard way to exchange messages.’  
 

‘We no longer have to establish a one-to-one connection every time’ 

SCSN thus comprises two solutions. The first is the UBL (Universal Business Language) based messaging standard, in which it is agreed what information, and in what format, is shared. The second involves the technical infrastructure, a secure electronic address book linked to a robust internet network. For this, it was agreed how the information can be shared in a secure and controlled way with all SCSN partners (now almost 400). Roodnat: ‘Via SCSN, we can now communicate with almost all software packages used in the Netherlands. We no longer have to establish a one-to-one link every time.’

Flawless and simple

At itsme, the technical link with SCSN is provided by the ECI Gatewise platform. This works very simply, Roodnat reports. ‘It is, so to speak, just ticking a box and dotting a few more i's and then you have a link established within fifteen minutes. You do need to make sure in advance that you are talking about the same articles. We facilitate customers in this, too, by linking their article numbers to ours. After that, it's straightforward; that's also how it went with Blok System Supply.’

The party on the other side also works with a platform. Is that ECI Gatewise, then the messages even go back and forth directly via the platform. Is it a different platform, then the communication goes via SCSN, but without extra effort for itsme, because of standardisation.

With more than half of its customer base, itsme now has an EDI link and every month at least one or two of those customers switch to SCSN. ‘Those are mainly the bigger accounts with us. It's really growing.’ Roodnat is happy with how SCSN is working now. ‘Our focus is on connecting as many customers and suppliers as possible, because it works flawlessly and is simple to set up.’ 

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