Streamlining Omnichannel Supply Chains Through Fully Integrated EDI

Mobile technology, social media, eCommerce, and fast fashion have all come to significantly change the retailers and brands life cycle. As such these businesses have to rapidly transform or optimize with an omnichannel technique which is now of the utmost importance. Why? Simply put, customers now expect a consistently frictionless experience with shopping and retailers who can achieve this truly have a strong advantage.

Having an effective omnichannel experience involves dynamic elements such as a single source of truth for customer communication, centralized customer data, servant leadership, and an easy and stress free buying process across all channels. One key area that enables omnichannel success is supply chain management. Modern consumers expect even greater flexibility in terms of when and where they shop. They expect the purchase process to be straightforward or else risk cart abandonment. To solve these problems, retailers have to streamline workflows like buy online pickup in-store, ship to home with in-store returns etc.

Additionally, retailers don’t need location accuracy for stock but also stores and online inventory. Instant access and real time stock information need to be agile to meet the customer’s demands no matter the level of stock. Accelerated processes and increased accuracy are critical for presenting the level of speed expected. Lastly speed with seamless processes formulates customer loyalty. Adding pressure, the rise of fast fashion means consumers expect the latest trends to be available through all channels, faster than ever before. In short, to thrive in this new landscape, retailers must deliver speed, flexibility, and a unified experience across all touchpoints.

How the omnichannel challenge affects suppliers

All of this comes at a significant difficulty for a large number of retailers. In response to this, suppliers are more and more being pressured to meet these demands by having higher fulfillment rates, accurate product details, timely shipment notifications, and increase the speed along with visibility of the merchandise being supplied to them, often at lower cost. As a supplier, you must have the processes and systems to meet these demands from the retailers; otherwise you run a huge risk of losing partnership altogether.

The technologies supporting suppliers in meeting compliance requirements with retail chains are also advancing. Electronic Data Interchange, or EDI, is not new. However, it has become increasingly necessary for suppliers wishing to do business with a significant portion of the retail market.

Suppliers can make use of various technologies applicable to the requirements of the retailers. EDI still remains one of the most accepted standards of business document exchange between retailers and suppliers.

Fully integrated EDI's role in omnichannel strategy

EDI directly and automatically facilitates the exchange of data and documents between entities. With EDI, you can automate the transfer of documents like purchase orders, advanced shipping notices (ASNs), and invoices. For many years, it has been a fait accompli for many retailers -- particularly the larger ones -- to urge their partner suppliers to adopt EDI in order to do business with them. Mainly, this is for a good reason: EDI produces streamlined operations -- quicker, more accurate, and less prone to human error. With increasing pressures on retailers to deliver everything making up an omnichannel experience for consumers, this pressure becomes all the more acute. Fully integrated EDI besides doing away with the necessity for suppliers to work with retailers also delivers added efficiencies for those suppliers across their entire supply chain by giving complete cross-channel visibility on inventory, streamlined processes, and lowered costs.

As retailers increase pressure on supply partners to fulfill orders to a higher degree of accuracy and timeliness to meet consumers’ omnichannel demands, and suppliers aim to streamline and optimize their own supply chain, fully integrated EDI is more critical than ever to omnichannel success.

How has EDI established itself as an industry standard, one that’s critical to the success of partnerships between retailers and their suppliers, especially in an omnichannel environment? Retailers, especially large players that do business with a vast number of suppliers, continue to rely on EDI because it standardizes the transactions with their many partners – cutting down on miscommunication, human error, incorrect shipments and other mistakes that can cost them money and eat into already-thin profit margins.

For suppliers, EDI can improve the relationship with retailers – by ensuring the automatic flow of accurate data, it can help reduce chargebacks, improve supplier scorecard ratings and decrease the likelihood of compliance issues. When it comes to their own supply chain, many suppliers turn to fully integrated EDI for automating transactions for similar reasons. EDI is in widespread use by a number of partners including retailers, payment providers, warehouses, manufacturers, 3PL providers and shippers. By automating and standardizing those transactions via fully integrated EDI, suppliers can cut down on staffing and time spent handling logistics, reduce costly transaction errors due to faulty data and ultimately cut costs significantly.

In practice, how could this work? Let’s take the example of a supplier that creates a product line specific to a certain retailer, essentially a cut-to-order relationship.

1. The retailer generates a purchase order that is sent electronically to the supplier.

2. The supplier can then automatically create and send a production order directly to the factory that will produce the items.

3. When products are packed and shipped from the factory, 3PL and retailers receive ASNs automatically.

4. All of this means better data, faster processing, fewer errors and lower costs—which suits retailers aiming to meet omnichannel customer demands.

Transitioning to an omnichannel retail experience is not an easy task. It requires more accurate and visible data, and faster, more efficient processes. For suppliers that want to do business with top retailers (or sell directly to consumers and need to go omnichannel themselves), enabling that transition through effective systems and workflows is a top priority. Fully integrated EDI can help suppliers manage their entire supply chain more effectively, while creating better retailer relationships.

To learn more about how Infocon Systems can take care of your EDI needs, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.