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What is the Future of EDI?

All companies large or small that sell product on-line or for warehouse fulfillment to retailers and e-tailers eventually find themselves in a position where they need to rely on EDI (Electronic Data Interchange) to communicate with them.   It’s a hassle, forcing many suppliers to employ individual(s) just to manage it and keep it accurate.  But does EDI really have a sustainable future? 

Well, first, let’s discuss its evolution and the path that this technology is on.  The EDI concept was introduced in 1960 and the first EDI document was sent in 1965.  The primary motivation behind the development of EDI was to facilitate better communication in the commerce / trading world by overcoming these obstacles: 

  • Computers were not connected
  • Data Transmission costs were very high
  • There was no consistent format for data files
  • There were no standards for file format  

EDI has continued to play a significant role over the last five (5) decades.  However, over the last two (2) decades there has been a major shift in the industry because of the Internet. Business processes have changed because of the Internet and the speed of data transmission has increased by a 100 fold.  The only thing that has not changed is EDI and the new reality is that now: 

  • Computers are seamlessly connected
  • Data transmission cost is zero due to the Internet
  • There’s no need for a file format to exchange data 

Everybody wonders then why do we still have EDI?   The answer is simple – resistance to change. Traditional businesses have been using it for so long that they no longer question it.  EDI companies, on the other hand, cannot change without destroying their revenue stream. 

As business has evolved, the Typewriter was replaced by the Telegram, the Telegram was replaced by Fax, and the Fax was replaced by EDI.  EDI is now being replaced by the Application Programming Interface (API).  

Businesses in the current time are far too dynamic to rely on such an outdated tool to be the backbone of their business operation.  APIs are a messaging format that allows data to be transmitted from one system to another in nanoseconds WITHOUT those expensive EDI Document fees.  Opal is the answer.  Book your FREE Demo now to learn more.

Bulk Orders AND Drop Ship Orders? Show Me the Money!

Currently, much if not all, of your order processing may be in the fulfillment of bulk orders: LTL, truck load or container shipments.  While not simple by any means, bulk shipment orders have high revenue values and can absorb a lot of order processing and handling costs and still be highly profitable.  Unfortunately, as you begin drop ship order fulfillment, you find that much of those same costs that apply to bulk shipments now severely impact the profitability of low revenue, single package orders.

You receive an order, pick it, pack it and ship it to the consumer.  That is simple drop shipping.  Unfortunately, reality is never that simple.  It’s actually a time consuming, detailed and often painful process with a great deal of pressure on profit margins.  Especially if you are selling through large retailers and e-tailers; additionally, industry trends over the last five years indicate that there’s going to more drop shipping in the future, not less. 

What’s needed is something that helps your team to continue managing those bulk shipments while even reducing some of those order processing costs, as well as making drop ship orders easy to handle and highly profitable, too.

OPAL is AUTONOMOUS and bridges both worlds – container, truck load and LTL shipments, as well as giving you the capability to efficiently and profitably drop ship orders.  Take a look at this pretty common cost scenario:

Traditional Bulk Shipping

1 order worth $40,000

Order Processing Cost of $4.00 Each

1 Clerk, 1 PC and 1 Desk

2+ EDI Transaction Charges

Traditional Drop Shipping

2,000 orders worth $20 each

Order Processing Cost of $4.00 each

3+ Clerks, 3+ PCs and 3+ Desks

4,000+ EDI Transaction Charges

OPAL Bulk Shipping

OPAL Drop Shipping

1 order worth $40,000

Order Processing Cost of $4.00

1 Clerk, 1 PC and 1 Desk

Zero EDI Transaction Charges

2,000 orders worth $20 each

Order Processing Cost of 40 cents each

1 Clerk, 1 PC and 1 Desk

Zero EDI Transaction Charges

But what does AUTONOMOUS really mean?  It enables you to eliminate nearly all, if not all, of the manual steps we must all perform when processing an order. 

This includes receiving orders from your customer retailers and e-tailers, managing all of their EDI transactions, processing and invoicing orders through your ERP and accounting system, downloading or creating custom packing slips, creating shipping labels, UCC128 labels and / or other required shipping documents, getting them to the warehouse for pick, pack and ship and monitoring delivery progress of the order.  Now, imagine doing that 24 hours day, 7 days per week, and only having to focus on the few exceptions that will inevitably occur outside of your control.  That’s what OPAL does for you.