papiNet’s new standardized electronic transaction formats will make 'super' improvements October 30, 2002 -- (Quad/Graphics) -- Faster than a speeding email. More powerful than EDI. Able to link printers, publishers and paper mills in a single bound. It's papiNet! And, it's likely to make a super difference in the way we run our business. papiNet is a global initiative to develop and implement a set of standard electronic transaction formats that can be used by all parties engaged in the buying, selling and distribution of paper and forest products. "The bottom-line goal of papiNet," says David Steinhardt, Regional Director for papiNet NA and CEO of IDEAlliance, "is to improve the speed, transparency and efficiency of transactions and administration throughout the entire supply chain between paper manufacturers, publishers, printers and paper merchants."  If papiNet is successful, Quad/Graphics will use a single set of XML-based purchase orders, manifests, order confirmations – in fact, all business documents – to communicate in virtual real-time with everyone in our paper purchasing supply chain. The Efficiency of Computer-to-Computer Communication The papiNet standard can be compared to your telephone's dial tone. Using XML (Extensible Markup Language) and the Internet, the papiNet standard provides a digital dial tone that companies can use to automate the exchange of business information. The papiNet standard leverages the existing communications infrastructure and builds on it, enabling the communication of complex business documents as easily as voice communication. The standard includes common terminology and business documents (e.g., purchase orders, shipping notices, invoices, etc.) for use in both domestic and international electronic transactions.  "It's computers talking directly to computers," said Mike Ziegler, Integration Services Manager at Quad/Graphics and a papiNet Standards Development Work Group representative. "We've generated electronic or EDI messages between ourselves and customers or suppliers for years. With papiNet, we plan to upgrade those messages and the technology so that when you generate a purchase order, it goes directly to the vendor's resource planning system. No one has to receive it, print it out and enter it manually. Efficiency is increased and accuracy is maximized." Improving Supply Chain Management   As increased demands are made on the quality and type of information available to the supply chain, manual processes and older automation systems can't keep pace. "The problem we run into is that each of our customers and vendors has proprietary business forms that are unique to the way each wants to conduct business," said Ron Nash, Quad/Graphics vice president of Customer Service and Board Member of papiNet NA. "That means time, money and effort to get on board with each of them. With papiNet's structured messages, there's no need to negotiate and agree on data definition and formats with each trading partner.'"            Ron also noted that another industry problem has been the inability to plan and forecast paper availability. "That means clients often have to buy more paper than they need, or order earlier than they want, because lead times on paper are broad," he said.  "We think papiNet will provide total visibility to the entire supply chain. You can wait later to make decisions, buy closer to your real needs and ship later, etc. Everybody knows what's needed, when it's needed and where it's needed." Already in the Works Since June of this year, Quad/Graphics has been sending purchase orders using the papiNet standard to Stora Enso, a paper vendor. And, more recently, we began trading standardized delivery messages with another paper vendor, UPM-Kymmene. "It's a good start," said Mike. "But, it's going to take awhile to fully implement the process. We'll be integrating these messages into our systems over the next one to two years. And, we'll encourage our suppliers to do the same." Stora Enso has already seen an immediate cost savings thanks to the papiNet standards, according to Kevin Shibilski, NA Business-to-Business Project Leader for Stora Enso and Representative for the papiNet Main Work Group. "In the EDI model, we're charged every time information is sent or received over the VAN, or Value Added Network," Kevin noted. "Because the papiNet standards use XML, a Web-based language, our VAN charges dropped 10 percent. Once our major customers get on board, they could easily drop another 50 percent." Quad/Graphics: An Active Participant The development of international industry standards is a joint effort between papiNet Europe and papiNet NA (the North American Group). The papiNet standard is developed and maintained by a dedicated, international team of business and technical experts. Quad/Graphics takes pride in being one of the first NA-based businesses to join papiNet NA.  Ron Nash, the individual who initiated Quad/Graphics' involvement with papiNet, has been impressed with the bipartisan nature of the papiNet group. "It's competitors and people from different market segments working together," he said. "It's very cool to see this unprecedented spirit of cooperation. I think we all believe that this is something we can do to make the industry better." In August of this year, Quad/Graphics was host to papiNet's Main Working Group with contingencies from both Europe and NA. "With Stora Enso, Mead, UPM and so many other huge suppliers from Europe and North America attending, the value of this meeting being held at Quad was huge," according to Mike Ziegler. "Having these groups see our facilities, the cleanliness of our plants and the attitude of the people working here only strengthens our reputation and gives more weight to our opinions about the standard." Mike recently returned from a papiNet meeting in Madrid, Spain, where the group continued to formalize standard messages. So far, some 16 messages have been completed, including a purchase order, invoice, RFQ, order status and inventory status.  "By the end of the year, we hope to have all the messages formalized to support the printing industry, about 20 in all," Mike said.  A 20-20-20 Fit The papiNet standard promises to be an ideal fit with Quad/Graphics' 20-20-20 formula for reducing cycle times. "If this comes together the way we anticipate, papiNet standards will give us the ability to drive costs out of the process," Mike said. "The better we can manage our paper relationships with our suppliers, the better product we can give our customers. It'll help us run our business more efficiently … and everybody benefits from that."