Team meeting to learn more about OPAL from experts.

Still Paying for EDI Documents?

All companies large or small that are selling products on-line or for warehouse fulfillment to big box retailers like Walmart, Sears, Kohls, Home Depot, etc. or through e-tailers like Wayfair, Overstock, Hayneedle, etc. need EDI (Electronic Data Interchange). It’s a hassle, forcing many suppliers to employ individual(s) just to coordinate it and keep it accurate.

Plus, you get to pay for the EDI documents needed. After all this technology has been around since the 1980’s so it doesn’t conform to current technologies and it’s certainly not inexpensive. For example, if you were to stream a movie on your mobile device using current EDI technology transmission cost, it would be about $240,000.

However, EDI has been around so long, and is such a core piece of a supplier’s business model, that most simply take it for granted as a necessary cost of doing business. What most people aren’t aware of is that the vast majority of big box retailers and e-tailers have evolved their infrastructure, or built it to begin with, to enable a direct connection with them. Yes, EDI is still necessary, but there is no longer a need for a 3rd party EDI company to charge for Each EDI document. 

If you think about it, how many EDI documents are you processing per order? Well, for a simple drop ship order you are going to need at least five:

  • Document 850 –  Order Download from the Retailer (Purchase Order, Ship to Address, Items to Ship)
  • Document 997 –  Order Acknowledgment to the Retailer
  • Document 856 –  ASN to the Retailer (Advanced Shipping Notice, Tracking Information for the Items Shipped on the PO)
  • Document 810 – Invoice to the Retailer
  • Document 846 – Product Inventory to the Retailer.

If you multiply this by 1,000 orders per day, or even 100 orders per day, the complexity of EDI processing becomes truly significant and expensive.  What’s needed is an order processing and fulfillment approach that directly connects with retailers in a 100% compliant fashion – at no cost – and automates the management of EDI documents, simplifying the entire process.  This will enable suppliers to focus on their business, managing the rare order exception rather than every single order.

What Does Automation Mean to You?

Chances are that you’ve automated your e-commerce business.  However, even the smallest of e-commerce businesses are complex and need some kind of automation to manage everything.  But, what does automation mean to you and how automated are you?

You may think you are automated because you have a sophisticated ERP (Enterprise Resource Planning) system or you may simply be using QuickBooks for accounting and inventory.  You have access to shipping information and a system that prints labels for you.  At the end of the day you can run reports showing how many orders were processed, and run another report to see inventory status.

The problem is that this automation still requires trained order processing personnel to manage each step or, even worse, they may have to duplicate the entry of information into each software application opening the door for human error.

And then, of course, there’s EDI (Electronic Data Interchange) when it’s required to do business with a particular customer.  This can take two basic forms:  First the EDI provider you’re working with may be simply providing a secure translation and data exchange for you, such as a Value Added Network (VAN) or they may be a full service EDI provider that has integrated with your business processes and helps you manage order processing.  In either case, it just means more complexity and cost.

The truth is that automation should eliminate these problems, complexities and costs.  So, what should automation REALLY do for you?

  1. It should plug in to and enhance the existing investment in your ERP or accounting / inventory automation software and fill in the missing gaps.
  2. It should require little to no trained staff to manage order fulfillment.
  3. It should be intelligent and self-managing so that orders are processed accurately and timely, even when there’s nobody in the office.  
  4. It should communicate seamlessly with your customers via EDI without needing a 3rd party to charge you for its use.  
  5. It should automatically communicate with shipping carriers and alert you to shipment status.
  6. It should easily plug into your warehouse pick, pack and ship operations.
  7. It should not only automate but SIMPLIFY the way you work.

When your business is more connected and truly automated the possibilities become limitless.