The key to thriving in this environment: build modern connections with more efficient order processes, stronger real-time data analysis and timely insights. When data is seamlessly connected across the supply chain, you can make smarter decisions, reduce waste and respond quickly to market changes.

Recognizing issues: time for a refresh

For enterprise businesses, any inefficiencies are magnified.

• Overproduction and waste: Data that is siloed across different systems and partners can lead to overproduction, markdowns and financial losses. If you don’t have accurate information about product performance, you can also produce more than necessary, resulting in waste. Trying to manage a supply chain with disconnected data means missed opportunities for cost savings that could be achieved through better coordination and visibility.
• Lack of agility: You’re also likely impacted by supply chain disruptions and unpredictability. Without real-time visibility, it’s more challenging to adapt to changes, leading to increased costs and potential compliance issues.

The bottom line: it’s essential to have real-time data and transparency in your supply chain.

Weaving solutions: the digital thread

To address these visibility and waste issues, you need to better manage the “digital thread” of information that connects your data. Consider upgrading your data management with modern, integrated solutions that support agility and provide a comprehensive view of your supply chain.

You can automate your data exchange with a fulfillment solution that connects product, order, ship and invoice data across all partners in real-time, while analytics solutions provide insights and timely reporting to enable you to stay ahead of the curve.

By creating a seamless flow of information, you ensure that everyone in the supply chain has access to the same data, enabling better coordination and decision-making.

Reaping rewards: ahead of the trends

The benefits of building an intentional, connected digital thread include:

• More informed decisions: Real-time data enables you to predict demand more accurately and make informed decisions about how to manage inventory. It helps drive your speed to market, reduce operational costs and stay compliant with changing trade policies to ensure smooth operations.
• Reduced waste: With accurate data and better forecasting, you can produce just the right number of products, minimize excess inventory and reduce environmental impact.
• Faster decisions: With real-time insights, you can respond quickly to market changes, customer demands and potential disruptions to stay competitive.

The overall impact is a more resilient, sustainable and profitable supply chain. You can achieve greater efficiency, reduce costs and meet the growing demand for sustainability.

Supply chain agility: always in style

By recognizing and transforming your digital thread with modern data exchange and analytics tools, you can become more agile, sustainable and profitable.

SPS Commerce is ready to be your partner in building a better supply chain, with our team of experts offering the people, processes and technology to streamline your operations and future-proof your supply chain to maximize your success.

EDI becomes even more non-standard when suppliers think about integrating and automating transactions into an ERP like SAP.  Perhaps, for example, you need to validate item numbers and automatically append a PO number on inbound transactions. Perhaps you need to validate location IDs and that tracking numbers are present in outbound transactions.

Processes vary from organisation to organisation, which is why EDI for SAP is an end-to-end standard only to the extent that you make it yours.  It’s also why SPS brought to market the tools and services needed to adapt to your specific processes:  a feature set of our signature product Fulfilment that we call System Automation.

The following illustrates how SPS Commerce standardises the order-to-invoice process for SAP with System Automation features. We’ll start with the 850 Purchase Order document and assume that Target, for example, has sent a purchase order for your newest widget.

From left to right, the process flows as follows:

• Target delivers an 850 document to the SPS Commerce Universal Network, which is then routed to the mailbox associated with your Vendor ID.
• SPS validates that the necessary data is present.
• SPS also validates, enriches, and transforms the data based on your SAP processes using configurable business rules.
• Errors are relayed back to the retailer and your organisation where appropriate.
• Human workflow tools are set up to allow for errors to be corrected via a simple dashboard to keep transactions moving along (if desired).
• After all information is validated and enriched to your standard, SPS transforms the data to your specifications and generates an iDoc file.
• The iDoc file is delivered to you via tFRC, a remote agent that we install on-premise, or SFTP if preferred.

Now let’s expand this out to a larger Order-to-Invoice process to include the 855 PO Acknowledgement, 856 Advance Ship Notification and the 810 Invoice.

Though we have added outbound document flow, the processes will be designed, configured, and implemented similarly to the inbound 850, just in the other direction.

• You deliver an iDoc with the transaction data via tRFC, the on-premise agent or SFTP.
• SPS validates, transforms, and enriches outbound documents based on your specifications using configurable business rules. Instead of errors getting all the way to the retailer, they are stopped in their tracks and queued.
• Business users correct errors using human workflow tools (if desired), allowing non-technical staff to shepherd along transactions without involvement from IT.
• SPS transforms and converts the data to Target’s specifications and delivers the document on your behalf.
• The SAP Status Feedback Loop can be leveraged to report on the status of outbound documents, including current location and 997 progress.

Now, this is automation for just one retailer.  Real scalability happens when SPS applies the business rules implemented for Target to your other retail trading partners. As your business rules library becomes more robust, rules can be toggled on and off by partner, making retailer changes easy to implement and onboarding new partners a simple point-and-click exercise – all of which we do for you as a full-service EDI provider.

When done right, the benefits of Fulfilment with System Automation features are many:  reduced errors, faster error resolution, faster trading partner onboarding, reduced chargebacks and fees, and the ability to allocate IT resources to more important work, to name a few.

Together with our full-service approach where SPS experts drive the design and configuration process, along with ongoing resource access, there simply is no other outsourced EDI provider that can make the order-to-invoice process feel like an actual standard – your standard.

For more information and a demo of how SPS can standardise your end-to-end processes with EDI for SAP, please contact SPS today.

Increase productivity with EDI for SAP and SAP Business One

EDI for SAP

EDI for SAP Business One

With every link in the supply chain accelerating, the odds of having incorrect documentation due to manual data entry errors and other human errors only compounds this challenging landscape.

Automation: the gift that gives back valuable time and resources

Reconciling business documentation for transactions takes time and resources to do consistently well. However, the reality is, if any part of the transaction chain is incorrect, a retailer can unintentionally miss out on valuable discounts or, worse, end up paying for merchandise that they never received.

Automation of the PO to invoice reconciliation process, or the three-way match process, between purchase orders, invoices and receiving documentation, can ensure retailers are only paying for what they get and can help your supply chain become more nimble.

How a purchase order-to-invoice three-way match works for retailers

PO-to-invoice three-way matching is an essential transaction reconciliation process retailers can use for approving payment to a supplier, vendor, or wholesaler upon completion of an order.

A three-way match allows you to spot inconsistencies in three critical documents in the purchasing process by 1.) matching the buyer’s purchase order to 2.) the seller’s invoice, and 3.) matching the inventory receiving sheets or advanced shipping notice delivered to the buyer’s warehouse. Other documents that might be matched include purchase order acknowledgment and purchase order change request.

Comparing these documents can prevent many potential issues (including paying for incorrect or fraudulent invoices), as well as to authenticate valid invoices for direct payment.

Purchase order-to-invoice reconciliation automation with EDI

 Automation of the purchase order-to-invoice reconciliation using electronic data interchange (EDI) means that the bulk of these previously referenced issues can be reduced or eliminated. Plus, EDI systems for retail easily integrate with ERP, accounting software, and other solutions, enabling the elimination of manual entry and the exchange of transaction information digitally.

An EDI-enabled 3-way match process shortens your transaction reconciliation and payment processes by automatically approving all matching documents for payment while separating any that don’t qualify for closer review.

Add more value to your bottom line

For both retailers and suppliers, finding ways wherever you can to add to your bottom line is a shared desire. Getting there is easier by automating your purchase order and invoice reconciliation and adopting the three-way match procedure.

Wrapping an EDI solution to help you in automating these activities can help positively impact your bottom line without making drastic changes to how you do business today.

To learn more about using automated PO-to-invoice reconciliation and purchase order-to-invoice reconciliation in your EDI system (or to learn how to use EDI with your retail trading partners). You can also get a free demonstration or speak to one of our EDI specialists.

These are unwise decisions to make, because there are a number of positive benefits that come from retailers, vendors and manufacturers sharing data with each other.

Mutual data sharing finds new insights

For one thing, retailers might have some data about the products that the suppliers might not have, and the suppliers might have some insights into the products that the retailers don’t have.

Among the groups, the retailers and the vendors or brands can both make better assortment and product offering choices, which ultimately lead to more sales.

For example, a vendor will know how their product is performing across all of their sales channels — not only at the retailer’s stores, but all their competitors. And what if the vendor had an important insight like, “Product X sells 20 percent more when it’s placed next to Product Y” or “Product X sales increase by 35% in the two weeks leading up to Spring Break.”

As a retailer, wouldn’t you want that valuable piece of information? That you could boost sales by placing one product next to another, and showcasing it in the first two weeks of March? You get that by sharing your sales data and receiving your vendors’ sales insights in return.

Sharing data can aid inventory strategy

Data sharing can also impact your inventory strategy. You may qualify for bulk savings and discounts if you order in larger quantities, especially if you knew that a peak sales period was coming up. It can also help you reduce stale merchandise and overstocks on things that don’t sell as well, or only appeal to a smaller niche.

By sharing data with your suppliers, they can again see how their products are performing across all sales channels and they can provide you with better, more complete insights about the items you should increase or reduce on your next order.

Shared data can help identify problems

We talk about this story quite a lot, but one of our clients had a product that was selling well in every single store in a particular region, except for one store, which hadn’t sold anything. The supplier got in touch with the retailer’s buyer who did a little investigating and found that the product was still in the warehouse and not out on the floor. They were able to get the items onto the store shelves, and sales performance was soon matching the other stores.

Now, this is not necessarily something the retailer would have caught, other than to see in their own sales data that the product didn’t sell. But because the vendor was able to see all the sales from all their retail partners, they were able to quickly identify the problem.

Sales data can impact promotions

Have you ever geared up to launch a promotion only to discover there was a shortage of the product line you were about to promote? Vendors and manufacturers will often run programs, such as a special rebate or offer, based on the number of items they know they have left in their inventory. But they can’t run it if they don’t know whether a particular retailer has a shortage of items or is sitting on the lion’s share of the inventory.

But it’s not a revenue stream

We’ve heard from some retailers who think they should sell their data back to their vendors, as a way to turn it into a revenue stream for the retailer.

We cannot advise against this strongly enough!

Remember, the whole point of sharing data is to benefit you and to increase your sales. This is an opportunity multiplier. What if every vendor could show you how to improve sales of their products by 5 percent, or reduce costs by 5 percent? What would that mean for your store?

Charging someone for the ability to help you increase your own sales is short-sighted and will result in more missed opportunities that will no doubt outweigh the money made from charging for data sharing. Share willingly and freely to the vendors who are able to help you analyse your sales data.

It’s also not difficult

We’ve heard some retailers express worry that sharing data requires a lot of manual data entry, and that it’s hard to break down the organizational silos and get everyone to play nicely and share.

This is where a good EDI system can break down the silos by integrating all order and product data into a single system. This also eliminates manual data entry. POs are generated (often automatically, based on low inventory levels), PO acknowledgements are sent, as are advanced shipping notifications, packing lists, and invoices. The only time a human gets involved is if there are discrepancies between what was ordered and what was received.

The EDI system also helps keep track of point-of-sales data and can streamline the sharing of the data downstream (and upstream), which can then be analysed by both the vendor and the retailer, often using the very same analytics package available in the EDI system.

SPS Commerce’s various cloud-based solutions — EDI, analytics, etc. — can help retailers, suppliers, and manufacturers to not only streamline their ordering process, it can help them understand sales data, find trends and patterns, identify problems and successes, and help everyone do their job more effectively and efficiently.

If you would like to learn more, check out our SPS Analytics solution or ask to speak to one of our analytics experts to answer your questions.

Wolverine Worldwide, whose brands include Sperry, Keds, Merrell, and many others, wanted to do better and provide their sales teams with a one-stop retail analytics solution that would make them more productive and close more business. They teamed with the Retail Intelligence Team at SPS Commerce and deployed SPS Commerce Analytics in 2018.

View the video to hear Randy Morgan, Vice President of Sales at Sperry, and Nichole Keith, Wolverine’s Retail Intelligence Manager, discuss how retail data has given their company a new way of thinking about sell-through and buyer relationships.

In the video, Randy and Nichole share their insights on:

Making Mondays productive

“It is very important for our teams to have this as soon as they come into the office on Monday. Retailers typically place reorders on Monday or Tuesday throughout the week, and so to have the data readily available as they begin their week of planning is key in unlocking those insights and additional opportunities.”

Driving sell-through and new business

“My retailers are blown away with what I’m able to provide them now. We sit down and go through the analytics, we look at business, where we’re at, from sell-through to weeks of supply of stock. It’s just amazing, and they’re actually looking at me going, “How do you get this information?”

“Recently, we partnered with a retailer and looked at the data in their specific regions. They doubled their orders for fall, and we’re really excited to see what this does to the business moving forward.”

Delivering a competitive advantage

“The more information you’re able to provide to your retailers, the more business you’ll receive from it. And if I don’t know more about their business than they do, it’s a disadvantage. But when we’re able to walk in with the information we’re getting from SPS, it provides us that edge.”

Learn more about SPS Analytics and read reviews from others benefiting from better access to point of sale data.

Elevate your data efficiency and effectiveness

Gain the insights you need to sell the right product, in the right place, at the right time with SPS Analytics.

WHAT ABOUT FORECASTING

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Natural questions include:  Which should we do first?  Should we replace it all at the same time, big-bang style? Do we have enough resources to manage these projects internally? Will vendor selection influence these questions?

SPS Commerce has a battle-tested point of view based on a solution that we regularly implement for enterprise clients called Fulfilment System Automation. In short, Fulfilment is full-service EDI with end-to-end integration technology that allows for transaction automation all the way into the ERP. It’s a major reason we almost always recommend starting with EDI system replacement first. Here’s why:

EDI Resource Re-enforcement

If you’re looking to replace your EDI system, you’re likely in one of two camps:  EDI is currently running in-house and it’s time to move to a reputable third-party provider because EDI isn’t going to be a core competency moving forward. Or, it isn’t working out with your current EDI vendor and you want to move to an industry leader.

In both cases you’re likely suffering from a lack of resources, whether it’s headcount or a lack of timely support from your vendor. Either way, signing on with a full-service provider will bolster the technical depth your organisation needs to facilitate EDI while freeing up resources to focus on critical ERP migration tasks.

Multi-ERP Testing and Automation

Access to automation and integration technology from a vendor like SPS can be a huge variable in making a decision to take on EDI before an ERP migration. The SPS Fulfilment technology allows for direct integration into multiple ERPs and full automation of EDI transactions, which is significant on a couple of fronts.

Firstly, it will allow you to untangle EDI dependencies in the current ERP, thereby creating a logical first phase to project and a stepping stone to the ultimate goal of outsourcing EDI.

Secondly, when it’s time to parallel test transactions SPS will be able to deliver data into both the old and new systems simultaneously and provide the auditing and reporting needed to validate transaction success, resulting in a much smoother cutover.

Figure 1: An image of the System Automation for SAP workflow tree showing transaction delivery to multiple ERPs.

Keep EDI Complexity Out of the ERP

ERPs vary when it comes to EDI. SAP, for example, has decent out-of-the-box features. Oracle JD Edwards, meanwhile, requires you to build out functionality to get to a minimum viable EDI product, potentially leading to a heavily customised, home-grown solution – a must-avoid for staying flexible, nimble, and scalable in the future.

In any case, the best practise is to leave complexity out of the ERP and host it with your EDI provider (assuming they can handle it). Sourcing SPS to deploy System Automation technology comes with a team of ERP specific experts who build business rules to your specific processes and the dashboard and reporting tools to fill visibility and error handling gaps. Knowing the extent of the integration and automation capabilities and tools provided by your EDI vendor can help inform your ERP selection and the project scope.

Timing and Risk

Let’s face it, an ERP migration is fraught with risk and not for the faint of heart – after all, over 50% of all migrations fail. That said, migration is often necessary for growth and you’re only going to have one shot at it. Eliminating as much risk from the process by implementing EDI first is very important in this context.

Overall, there are many considerations when weighing replacement of ERP and EDI systems. Please contact us today for a demo and discussion on how Fulfilment can shore up your EDI resources, speed up your migration timeline, and set you up for a more successful, lower-risk ERP migration.

Retail merchandisers should think of themselves like curators at a museum. A curator doesn’t just amass a collection of endless art and artefacts and stick them on the wall in a hodgepodge manner. They look for certain themes and commonalities and create a collection that will showcase each item, drawing attention to each one’s unique qualities and maximizing the potential for visitors to enjoy what they see. They also do what they can to drive more people to want to see the exhibit in the first place, and hopefully bring home a few things from the gift shop.

Successful retail merchandising professionals think about their work in the same way. Fashion merchandisers bring together specific collections based on the season, the function or the designer. Electronics merchandisers curate items by functionality, popularity or wow factor. Toy retailers curate based on age groups, colours and the season’s hottest releases, all with the goal of driving maximum sales and profitability.

Knowing where to blur the lines

There are times where merchandising can include cross-over products that complement their primary offerings.

For example, grocers are primarily providers of food, but many of the larger stores will offer some related general merchandise. The grocery stores near my house also sell basic kitchen items, like pots and pans, spatulas and spoons, even plates and eating utensils. Some have even started carrying clothing and gardening supplies (you know – so you can grow your own veggies and herbs).

Similarly, since an electronics retailer sells items for watching movies — TVs, DVD and Blu-Ray players, surround sound systems and DVDs — it makes sense to sell movie snacks and soda as well. On the flip side, the grocery store might start selling DVDs for family dinner nights. But if the grocery store started selling major electronics like TVs and stereos, that might not particularly go over well because it would be too far out of the grocer’s domain.

Merchandise within the store or on the e-commerce site should take into account consumer intent. Would a customer come to you for that item? Or would they trust someone else more? For example, would you ever want to make a stop at Best Buy or Circuit City to buy milk? Would you trust milk from a store with a primary focus on electronics? That’s getting to the heart of consumer intent.

Merchandising & consumer expectations

These are extreme examples, but I used them to prove a point: Stepping too far out of consumer expectations for merchandise offerings can at least result in “misfit” stock that won’t sell and cost a lost, and at worst can trigger consumers to question your credibility even with your niche categories and offerings. Even within your core categories.

Retail merchandisers also want to offer enough tried and true products, the ones they can rely on and that the customers want week after week, season after season, or year after year. Basically, the products that you can rely on always selling — milk and eggs in grocery stores, TVs and smartphones for electronics stores, and new beachwear every springtime in clothing stores.

But they also want to try new products that they think could appeal to their customers, and hope they picked a new product that will sell well, instead of experimenting with something that just flops or fails to meet initial expectations.

Data mining for merchandising

This is where your point of sale data analytics and sharing that information can make a big difference for both retailers and their suppliers. Retailers who are thinking about adding new products can bring a new supplier’s line into a few stores, or even introduce it into their e-commerce store and pair the line with their related products through a “You might also like” type of feature.

Then the retailer can look at their point of sales data and see which products are having an impact and which ones are coming up short. The products that do well can be brought into more stores, and the sales further monitored. By sharing POS data, suppliers can also have line of sight into that to make quick recommendations to retailers on those test product.

Similarly, suppliers and retailers can share sales data to show what works and what doesn’t. When a supplier is pitching to a new retailer, they can help make their case if they show how similar retailers have performed with those same products in their own stores. Similarly, retailers can show suppliers their own sales data to better illustrate their merchandising needs in terms of products and promotional efforts.

Finally, data can give an overall look at what the market is doing beyond the single brand, retailer’s or supplier’s, and what trends are taking place. Retailers and suppliers should both have access to this kind of industry data, but it could be advantageous to collaborate and put your heads together for the best approach.

If you’re trying to add a new category for strategic reasons, such as when Walmart and Target both added grocery sections and when J.C.Penney started selling appliances (again), there are some other, different things to consider. But that’s a post for another time.

To learn more about collaborate on point of sales analytics to help with your merchandising, please visit the SPS Commerce website and request a free demonstration, or speak with one of our retail experts.

In order-to-shelf (OTS), warehouses or distributors unpack and repack items based on a store’s layout and particular inventory needs. The warehouse can package and organize the items for each aisle of the store — cereal and breakfast bars in Aisle 6; canned fruit, canned vegetables, and fruit juice in Aisle 7— rather than requiring the store to sort everything as it comes off the truck.

What this also does is allows the stores to take regular stock of what’s in the store, order only what they need to restock the shelves for the next day, and then everything will show up late at night, ready for restocking.

There’s very little to store “in the back,” which means there’s little to no excess inventory, there’s no storage needs, and there’s no chance for spoilage because something was missed or misplaced. Everything shows up “just in time,” and on a daily basis, rather than refrigerated trucks showing up with the week’s supply of milk, eggs, and ice cream.

OTS inventory management in the wild

Two store brands have begun taking on OTS inventory management with mixed results.

Target has embraced order-to-shelf and is handling it very well. They’ve been using it since 2016 and have had promising results. Target’s CEO Brian Cornell has said this is their future and the way they will move product from now on.

Whole Foods, on the other hand, has had a more difficult time and have had many more problems getting it to work properly. In Q4 2016, the grocer said they have seen a 9% reduction in store-level inventories. However, according to a January 2018 Business Insider story, Whole Foods frequently suffers from food shortages, which reduces inventory and lowers costs, but they frequently run out of food, and employees say the system is “militaristic” and “crushes morale.”

While some analysts have blamed the problems on Amazon’s acquisition and an increase in shoppers after the acquisition, many employees have said this is an ongoing problem that started before the acquisition.

How EDI and Analytics help OTS

One issue Whole Foods is facing is that all of their buying has been centralized and all decision-making is coming from headquarters in Austin, and not from local and regional buyers who have a better handle on their stores and regional tastes and wants. And according to the Business Insider story, this is where some of the problems seem to lie.

This is where an EDI system and full analytics program can support an OTS inventory management program and help avoid overstocks and set automatic re-ordering of certain key items.

For example, when a store’s milk supply or eggs or produce falls below a certain level, your inventory system can be set to generate a purchase order that EDI automatically routes to the appropriate vendor. Set it to reorder when the inventory falls below 25 percent, and the system will transmit the automatic reorder to the vendor with instructions of what is supposed to be delivered to which store and when. The order is stored within the central EDI system, but it won’t require human intervention to trigger the transaction, thus risking any out-of-stock issues.

Further, an analytics program can spot certain buying trends and even localize them. As mint leaves sales increase in Louisville around May — it’s Derby time, and mint julep sales go through the roof! — the analytics program will flag those increased annual sales for buyers, or even make automatic orders at the appropriate time and for the appropriate stores.

As we see new methods of fulfillment and shipping in other retail sectors — buy online, pickup in store (BOPIS) in-store fulfillment — which are aided by EDI, we wonder how soon before we see similar trends in grocery stores, especially if consumers want to order specialty food items, knowing they’ll be available for pickup one or two days later.

Imagine being able to special order pineapple, or even mint leaves for your own Kentucky Derby party in Minneapolis in May, and to pick it up at your nearby grocery store because it was included in part of their regular OTS system and BOPIS fulfillment.

Order-to-shelf is still growing and evolving, and different stores are finding success at different rates. Target seems to be doing well, while Whole Foods is still struggling. There are plenty of other grocery stores and even regular retailers that have started to embrace the same OTS systems.

But rather than muddle your way through it, consider using an EDI system and point-of-sales analytics to make life easier and to take a lot of the burden off an already-overworked human-based ordering system.

If you would like more information about how to make all this work within your own grocery store system. There you can learn more about EDI, analytics, receive a free demonstration, or even speak to one of our EDI solution specialists.

The first step in your search is likely Google. When you search for EDI Provider, approximately 12,000 results appear. This isn’t helpful and may be overwhelming. Don’t give up. With a few actions, you can quickly develop a shortlist of EDI providers, say 2-5, that likely fit your business:

Step One: Do they have customers like me?

EDI providers often specialize in an industry or size of the company. For example, if you are a smaller supplier to retailers, look for EDI providers that feature customers that fit this description. If an EDI provider highlights mainly healthcare customers or large corporations, they likely won’t be a match for you. Pro Tip: Search for “EDI Provider” and your industry to shorten your list.

Step Two: Do their customers like them?

If you are shopping for an EDI provider, do as you would when buying anything else online. Check out their customer reviews. Filter the results to see only EDI providers with 4-5 star reviews on popular sites such as G2, Capterra or TrustRadius. Pro tip: Only read the most recent reviews (to make sure they aren’t out of date).

Step Three: Do I have/want to obtain EDI expertise?

Is your core competency going to become EDI, or is this function going to be one of the many things on your daily checklist?

Decide if you want to devote time to learning the ins and outs of EDI and how to troubleshoot when things go wrong, or if this is part of what you need to purchase from the EDI provider. Pro Tip: If learning EDI isn’t part of your career goals, understand that ‘managed service’ means that you do all the leg work, whereas ‘full-service’ means the EDI provider’s support teams do it for you.

These tips should make it easier to find a handful of EDI providers to explore. If you want to learn more about EDI basics, check out our ‘What is EDI?’ guide. Happy searching!

Technology has specifically helped distributors in a number of different ways. Data analytics that can identify important sales trends is one example. Another is automation via an electronic data interchange (EDI) system, speeding up the order management process –– so it’s done in seconds and minutes, not days or even weeks –– allowing distributors connect to buyers’ and sellers’ systems and integrate them into their own EDI system.

Here are five ways technology has helped distributors find new methods to increase productivity, reduce costs and even provide the potential for new revenue streams.

1. Identifying seasonal trends to make better inventory decisions

Distributors can look at the sales data for all of their buyer partners to better identify seasonal trends, and even share that information with their suppliers so that all the links in the supply chain can adjust their strategy.

This goes beyond the “we get busy during the holidays” general thinking. Rather, distributors can identify when some buyers begin moving more product before others or see across multiple retailers if a trend is forming. They can identify trends and analyse them in granular detail like never before to discover the what, when, where and why, in order to take advantage of the opportunities revealed by the data. Ultimately, this helps them plan their inventory needs, enabling them to anticipate and avoid any overstocks or stockouts.

Using data analytics can help in the discovery of problems and opportunities for distributors and their retail partners and suppliers, helping them to make decisions based on past seasonal trends as well as predict future ones.

2. Improving drop shipping accuracy for more “perfect orders”

One way that buyers are looking to their distributors for help is in processing drop shipping e-commerce orders on their behalf. They want distributors who can fulfil orders from their own distribution centres, using the buyer’s branded packaging. Offering additional services is one area of opportunity for distributors to open up the potential for new revenue streams.

But drop shipping has to be fast and accurate to keep a distributor’s customers happy. Since it’s the buyer’s reputation on the line, they want more on-time fulfillment, fewer returns and the ability to meet their shipping deadlines. In the industry, these are known as “perfect orders.” Some retailers and third-party marketplaces, like Amazon Marketplace and Walmart Marketplace, expect an on-time shipping rate of 95 percent and higher with a similar “perfect order” rate to boot.

The fuel pushing this trend is consumer behaviour and the retailers who are bending over backward to accommodate what is often referred to as “the Amazon Effect.” Amazon has set the bar for what consumers expect from their online ordering experiences. Retailers are trying to follow suit, and they look to drop ship capable distributors to help them do it right.

Fulfillment EDI from SPS Commerce can empower a successful drop shipping program by facilitating communication and automating manual tasks within the order management processes and between retailers, distributors and the end consumer.

3. Fulfilling orders from the most efficient distribution centre

With algorithms and artificial intelligence, it’s possible for a retail order to be automatically directed toward a distribution centre that can provide the right products in the shortest, cheapest and fastest delivery options possible. Whether that’s a distribution centre that’s 100 miles from the customer, or the only DC that has the product in question, the order is immediately received, fulfilled and shipped within the time specified by the buyer.

Many large e-commerce brands choose to work with drop ship capable suppliers and prefer to work with those that offer multiple regional distribution centres as a way to quickly fulfil their e-commerce orders as they can ship orders out faster through several small regional centres, rather than one or two large ones. This allows them to offer two-day shipping and compete with Amazon and Walmart.

Over 20 years, SPS Commerce has supported many businesses, including distributors, retailers, 3PLs and other players in the supply chain, in streamlining fulfillment and shipping processes and is able to help you find new efficiencies, reduce costs and improve delivery times.

4. Providing inventory visibility to eliminate stockouts and disappointed trading partners

Inventory transparency allows e-commerce sites to display the most up-to-date inventory counts, which tells customers when a product is in stock, or removes it from the site when it’s out. When customers visit a buyer’s website or system they are able to see real-time inventory counts for a particular product, helping them make better buying decisions faster. This helps to eliminate out-of-stock problems for customers, which can damage a buyer’s reputation.

EDI, via the Inventory Inquiry/Advice document, helps in accomplishing this automatically. Also known as EDI transaction 846, this is an inquiry that is sent between a retailer and a distributor (or a distributor and a supplier) to find out how much inventory is on-hand and where. Distributors can even set alerts on specific products for automatic reorders or set-asides which helps them to avoid running out of an item before the replacement inventory arrives.

5. Elimination of time-consuming, error-prone manual data entries

Distributors who don’t have an EDI system are no doubt faxing, emailing and phoning about purchase orders, purchase order acknowledgments, inventory revisions, advanced shipping notifications and packing lists, none of which match up when the final invoice is being processed. Ever-changing inventory counts, ordering mistakes and even typos can all lead to a lot of inefficient time spent on an inefficient system by an overabundance of staff.

EDI has turned a labour-intensive, error-filled process into something that can be handled by a single person or a small team. An EDI system helps distributors and buyers handle their transactions quicker, more efficiently and cleanly with minimum human intervention. Once an order has been placed, it triggers the right forms to trade back and forth with the right quantities and product numbers sent immediately. It also reduces the number of people needed to manage the hundreds or thousands of transactions per month.

An industry leader in the retail technology space, SPS Commerce has been pioneering leading technologies in helping retailers and suppliers alike in finding efficiencies to help them scale their processes within the retail supply chain, helping to reduce stockouts, improve fulfillment rates, shorten delivery times and spot troubling trends before they become too large.

For more information on how to incorporate EDI or other supply chain technologies into your business, visit the SPS website and receive a free demonstration about our different software solutions, or speak to one of our supply chain experts.