Integrated EDI: When Built Right, a Powerful Compliance Tool

By Carol Weidner, CEO, eZCom Software

Enhanced compliance brings opportunity. Vendors who excel in this area enjoy clear advantages, including avoidance of chargebacks which adds up to savings of hundreds or even thousands of dollars per year; as well as improved relationships with retail partners. A strong compliance record with retail partners can result in the following competitive gains: larger and more frequent orders, fast tracking at the distribution center, quicker and more efficient sales cycles, better cash flow through faster payment of invoices, bargaining power, improved reputation, and increased business.

Tools, technology and partnerships exist/are available to help vendors heighten compliance and take advantage of these clear benefits. Integration of order management ranks high on this list. More and more, vendors turn to integration of EDI with inventory, shipping, back office, ERP, and/or warehouse management as a tactic to improve performance. Many EDI integration providers make this promise and, if implemented successfully, integration of EDI with supply chain applications can in fact increase compliance dramatically. Through heightened automation, an integrated order management process significantly decreases chances for human error (e.g. incorrect re-keying of data), reduces order processing time and enhances speed— factors of great importance in the era of omnichannel retailing and drop ship.

A Sound Foundation

Any system, however, is only as strong as its component parts. Providers of integrated EDI solutions build those integrations on their EDI product. If the base EDI software does not feature automated compliance safeguards, errors can occur that may result in chargebacks and damaged relationships with trading partners. Accounting and inventory inaccuracies may surface as well—leaving vendors worse off than before beginning the integration project. Prior to embarking on an integration initiative, make sure your provider’s EDI application offers:

  • Automated compliance checks. Each retailer’s specific trading rules should be programmed into the EDI application to ensure compliance throughout the order management process, and EDI providers should update these trading rules as necessary in accordance with retailer changes. EDI solutions should automatically pre-validate outgoing documents prior to sending to ensure all retailer requirements are met, catching potential errors and preventing documents from being sent until corrected.
  • Batch processing to reduce manual entry and rekeying of data. Batch processing is key to eliminating compliance issues due to human error. Choose a provider with an EDI program that enables 1) processing of multiple invoices, ASN’s, and other EDI documents at one time, 2) necessary updates and adjustments to EDI documents through a minimal number of steps, and 3) the ability to pack multiple ASNs with one command.
  • Ability to archive records for at least three years.  This enables vendors to correct errors if a retail partner misplaces a record or incorrectly levies a chargeback.
  • Excellent customer service and educational support. Responsive support increases the value of your EDI application tenfold. Support staff should have understanding of all retail partners’ compliance specifications, expert understanding of EDI in general, ability to respond quickly when needed, and should offer complimentary unlimited services.

Craft it Custom

In addition, review your proposed provider’s track record for on-time, successful deliveries (according to studies, the majority of integration projects fail and/or launch significantly after deadline). And check that the proposed integration solution strikes a balance between full automation and human intervention. A customized, hybrid approach—one that balances the cost savings, ease of use and speed of automation with the validation needed to support the compliance of your supply chain—will provide for:

  • Heightened accuracy. Validation leaves room for error resolution. In a fully automated solution, duplicate purchase orders and other non-validated documents can be difficult to detect and correct if passed directly to an ERP or accounting system without an oversight step.
  • Unique business needs.  Customized integration solutions can accommodate specific fields, tasks, users, and intricacies of your company’s supply chain.
  • Constant change. A custom, hybrid integration puts in place extensible and modular solutions that can accommodate application updates, revisions, and technology innovations; as well as changes to your company’s structure, size and focus.

Do it right, and integration of EDI with supply chain will do wonders to increase the compliance of your order management.

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