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Are You Prepared for a World Without EDI?

Do you remember the days when business was run through computers that were disconnected?  It’s certainly been a while, but that’s when EDI helped businesses exchange data to save time and cost of transmission. 

EDI has continued to play a significant role over the last five (5) decades.  However, over the last twenty (20) years there has been a major shift in the industry because of Internet technology:

  •         Computers are now seamlessly connected
  •         And data transmission cost is ZERO. 

The only thing that has not changed is EDI.  At this point, it just delays communication and increases your cost per order as a supplier. 

Everybody wonders then: “Why are companies still using EDI?”   The simple answer – resistance to change – AND denial of harsh realities.  The fact is, many retail players are going out business – but not because of their product line—it’s because of antiquated technology and their inability to adapt. 

The unrelenting pace of eCommerce and the proliferation of drop shipping is forcing retailers to rethink the use of such an outdated tool as the backbone of their business operations.  They need technologies that work in real time that allow data to be transmitted from one system to another in seconds WITHOUT those expensive EDI Document fees for themselves and their suppliers.  Progressive retailers such as Wayfair are already moving in this direction and others will follow. 

As a supplier you know that 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 to communicate with them.   It’s a hassle, forcing many suppliers to employ individual(s) just to manage it and keep it accurate.  

So, does EDI really have a sustainable future?  Some experts are predicting as little as five (5) more years before it’s obsolete in its current form.  

That means that, as a business, you have two options:  You can continue as things are and possibly wait till it’s too late, or you can investigate OPAL.  

OPAL (Order Processing and Logistics software) has already eliminated current EDI charges for communication with your retailers and 3PLs – AND already has the capability to provide this communication in the real-time method that retailers will be coming to expect.  

The “Perfect” Drop Ship Order – What’s at Stake?

What does a “perfect” drop ship order really mean? If you believe you know, you also know that managing the multitude of moving parts necessary to achieve it can be mind boggling.

We’ve written of managing the “perfect order” before and that OPAL (Order Processing and Logistics software) can help you succeed, but it’s really important to understand what is at stake for your business.  With an average warehouse pick and pack cost of $4 – $7, plus a minimum of $2 – $4 order processing labor cost, and at least $1 in EDI document fees per drop ship order, the profit on many items is already being squeezed now that you’re shipping individual parcels instead of pallets.

And, then, when an order goes wrong everything stops! You spend an enormous amount of extra time and effort researching and correcting the problem and very often incur the expense of a call tag to retrieve the incorrect item and expedited shipping of the product that didn’t arrive when or where it was supposed to. Then, to top it all off, you receive Vendor Compliance Penalties averaging 1% or more of revenue from your retailer and your Vendor Score Card suffers.   If it’s a chronic problem, your retailer doesn’t want to work with you anymore. 

The American Productivity and Quality Center, (APQC) defines the “perfect order” as flawlessly taking and fulfilling a customer order. This includes entering the order correctly, allocating inventory immediately, delivering the product on time, and sending an accurate invoice. Then your retailer adds on additional requirements such as all the necessary EDI documents (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling, shipping documentation and accurate, on-time inventory feeds

It is speed and accuracy that makes a supplier valuable to their retailer.  Your inability to perform costs retailers billions of dollars every year in unexpected rework and processing.  This is what is at stake for your business.

So, what makes OPAL different and what does it mean to you? 

OPAL is 100% compliant with nearly 100 retailers – and new ones are being added each month. OPAL processes a retailer’s orders for the supplier and complies with all necessary transactions (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling, shipping documentation and accurate, on-time inventory feeds.  This performance standard makes you very valuable to your retailers, increasing your business with them.

OPAL also reduces your operating costs because it processes orders with a no-touch, self-driving (autonomous) approach that works 24×7, without the need for an additional Warehouse Management System, Shipping Software, Retailer Portal or EDI document charges.  And it does it in less than 8 seconds per order.

Lastly, it increases your overall productivity by reducing Order Processing time by up to 90%, Order Processing Cost by up to 80% and Undelivered Packages to less than 1%.  It even increases Order Accuracy up to 99%, as well as Picker and Packer Productivity and Daily Shipments by up to 50%. 

Consider OPAL as your solution, an intelligent software system that manages the order processing and fulfillment workflow in a method that is efficient and retailer compliant.  Power up and power on with OPAL.