Taking away Guide Access from EDI Success
When is the right time to move from a manual EDI fulfillment process to an integrated supply chain? Is there a magic variable, a perfect time, or threshold that makes the most sense? Well, yes, there is. The decision to switch from a manually involved EDI fulfillment solution to a fully integrated supply chain is based on numerous variables, the number of transactions you send and receive on a monthly basis, your staff’s fulfillment time for said transactions, the number of items and overall volume of those transactions, as well as your corporate structure, fulfillment requirements and corporate outlook. But, ultimately this decision is uniquely subjective to your own preference and how you weight these variables and their impact upon your organization.
The single most impactful variable will be your overall monthly transactions, both the volume of transactions sent and received and the size of each of those transactions. How many Purchase Orders are you handling through your web-based service currently and how big are each of those Purchase Orders? If you are handling fifty Purchase Orders per month each with a single SKU, you will probably be able to handle and maintain fulfillment with a web-based solution indefinitely. However, if you are receiving even ten to twenty Purchase Orders per month each with fifty or more SKU’s on them than integration may quickly become a necessity. As the manually entry into your accounting system, ERP or IMS may quickly become laborious and the likelihood of human error, mis-keyed information or accidental omission of data become a daunting reality that costs time, money and negatively effects client relationships. In this case, the ROI that is received from implementing an integrated supply chain is viable and the cost-benefit analysis is straight forward, integration is not a choice it is a necessity.
Your shipping processes and requirements will also directly affect your decision to adopt integration as well. If you are constantly shipping to one or two trading partners, each with a single delivery destination such as a distribution center, than again you may very well be content with staying with your web-based EDI solution. But what is your trading partner has hundreds of locations, each requiring its own 856 ASN and Invoice? Or you have multiple trading partners, all of whom may have multiple ship-to locations or distribution centers? In these cases, integration again will return far more value to your organization than the minimal cost required to make the transition from web-based manual fulfillment to an integrated supply chain. Many retail operations are migrating from the singular distribution ship to model to handling shipping and invoicing by the singular retail location model. Inevitably, this means that you will be a Purchase Order, ASN and Invoice required per store or at a minimum you will be receiving a Master PO and will still be required to generate an ASN and Invoice for each location. Either way, this is additional time and steps that are being added to your fulfillment processes, carrying with them additional costs, time and personnel requirements, and a well spring of opportunity for human error. Again, integration will quickly become necessary to ensure proper fulfillment, save resources and improve your client relationships.
Corporate outlook, governance and culture will also play a role on when you adopt integration. There will always be your early adopters, companies that immediately implement the newest cutting edge solutions to stay ahead of the competition with a sole corporate outlook and philosophy of efficiency above all things. Additionally, there will always be the late responders, those companies who choose to wait until they are at the apex of technical limitations, who try to maximize the investment and longevity of their current solutions and will maintain these solutions until it becomes fiscally impossible to continue on with their current protocols and solutions. Most companies fall in the middle of these two extremes; these companies want to be competitive and function with the upmost efficiencies but are also cost sensitive to the bottom-line. Regardless of where your organization falls upon this scale, the adoption and implementation of integration will ultimately come up along the way as your organization grows and your supply chain scales to a point that you decide it is no longer feasible to continue with manual EDI fulfillment process.
All of these unique variables will eventually guide your hand and your decision to integrate, whether it be the hours spent manually handling your orders, the human errors that continuously hinder your maximum potential, or the overall impact upon your bottom-line. The easiest rule of thumb for when it is time to begin entertaining the implementation of an integrated supply chain is when you have at least half of an employee’s time dedicated to manual fulfillment or you have begun considering bringing in temps to handle the data entry, it is time to consider an integrated solution. When you begin calculating the total cost of the salaries of those individuals and more importantly the opportunity cost of having that employee handling mundane data entry instead of focusing on other activities that could be scaling your organization, driving more business or focusing upon customer service and internal tasks that solidify your processes, you can quickly see how the minor investment into an integrated solution would truly revolutionize your organization’s supply chain.
When you believe your organization is approach this technological omega point of productivity or if you are wondering if you may already be there, give us a call. We would be honored to discuss your needs, project scope, fulfillment processes and current costs to help you choose the best direction for your organization.
We have several EDI solutions available for companies of all sizes, in every industry, and varying needs. Let’s arrange a date and time to discuss your specific needs and concerns and together we shall find the EDI solution that is right for your company. Please give EDI Here a call at 1 (302) 401-6768 when you are ready to chat.