Keeping up with the Retail Supply Chain

Streamlining EDI can mean supply chain efficiencies for SMBs


Most companies are familiar with the benefits of back-office integration. Orders from retailers are imported into back-office systems without employees typing them in manually and are typically available within the back-office system in minutes. Shipping manifests and invoices are in turn exported out of the back-office system and converted into EDI documents based on retailer specific requirements. This reduces employee costs and errors caused by human intervention. SMBs are cautioned, however, to review how EDI providers offer integration, as some systems still require manual labor, ultimately defeating the benefits of having integration in the first place. For example, SMBs using QuickBooks accounting software will export invoices from QuickBooks to an EDI solution for translation and communication. These invoices often lack data that are required by large retailers (e.g. shipment weight, carrier information, total cartons) and employees must manually update this information on resulting EDI documents.

While data integration can result in a measureable ROI, efficiencies achieved in using the proper shipping utilities can be greater and often more important than integration. For example, when shipping to a large retail chain, SMBs may face large shipments containing hundreds and thousands of cartons. Certain EDI solutions that offer accounting integration may require SMBs to process large shipments one carton at a time, resulting in several days of work. Other EDI solutions (that may or may not have back-office accounting integration) offer tools for SMBs to process shipments in batch, resulting in the creation of shipping documents in just minutes that contain thousands of cartons.

Aside from cost savings associated with solutions that offer shipping efficiencies, there are additional benefits: If an EDI solution takes days to create shipping documents, SMBs risk late shipments to EDI-based retailers that could potentially create large compliance penalties, delays in product reaching sales floors and the loss of business.

An SMB supplier of plastic accessories was using a Web-based solution provided by an EDI outsourcing expert in an effort to conduct business with a nationwide home goods retail chain. This solution required the SMB to process each order one at a time, making it difficult to keep up with hundreds of store orders per week for just this one retailer. While their EDI solution worked well for other companies, this particular SMB could not keep up with the demands of the EDI customer and almost lost the business of other non-EDI customers as all resources were focused on processing EDI documents.

After reviewing alternative solutions in the marketplace, the SMB found a more appropriate SaaS solution for their specific needs. What previously took a week's time to process now takes less than one day with the company's new provider. Additionally, all the needs of its EDI and non-EDI customers are being successfully met, without any additional technology or employees.

With EDI pressures mounting within supply chains, SMBs can take advantage of solutions that are more advanced and equipped to streamline supply chain processes. EDI providers offer the tools necessary for reducing onerous shipping procedures, integrating with back-office systems and ensuring that data are delivered both accurately and timely. As there are options available, SMBs are wise to become proactive in their search of the correct EDI solution. Being reactive can prove to be costly in more ways than one.

About the Author: Marc Kalman is co-founder and CEO of eZCom Software, and brings with him 15 years of supply chain experience. Kalman can be reached via info@ezcomsoftware.com or 877.765.3564.

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