Getting the Most Out of EDI for Retailers

For decades now, the retail industry has used Electronic Data Interchange (EDI) to streamline many of their paper-based processes with electronic documents. There are still companies that use some form of paper-based processes in their order, invoice and dispatch advices indicating that are still a lot of potential for EDI to deliver even greater potential in the retail industries.

In the 1980’s, vendor managed inventory (VMI) became the driving force in the industry to cut costs while improving on customer service. The “quick response” approach for the product flow across the supply chain was the core concept.

The goal of VMI is to provide a mutually beneficial relationship where both sides will be able to smoothly and accurately control the availability and flow of goods. With VMI, the supplier has greater control over inventory, providing less waste or over-supply. The replenishment cycle often moves from monthly to weekly or at times daily, increasing customer service. This becomes even more important during special promotions where increased demand puts strain on the ability to restock.

There are two key roles for EDI in retail:

  1. Streamlining the direct store delivery (DSD) process
  2. The drive to Global Data Synchronization (GDS).

With the increase in shopping on-line to having merchandise ship directly to the store, many retailers struggle to accommodate the increased delivery frequencies and stock-keeping unit (SKU) counts offered by DSD supplies. Using EDI to automate the process can relieve congestion at the retailer’s back door and reduce check-in times.

EDI removes the complexities of trading electronically with multiple suppliers helping retailers get the right products in the right place at the right time. This real-time supply chain visibility empowers retailers to make clear and accurate decisions, which leads to improved customer service, impacting the bottom line.

The key is the advance ship notice (ASN). The ASN can slash receiving times up to 60% according to the Grocery Manufacturers of America. The ASN ensures that every step of the supply chain is informed on the status of goods whether they are checked at the pallet level or individual case level.

In order for this process to be successful, there needs to be an effective GDS across the supply chain. A good master data management (MDM) process needs to be in place with a fully aligned master file maintained at an item level to exchange item information, authorization, cost and price. This allows the retailer to identify discrepancies, unauthorized items that were delivered as well as differences between orders and deliveries. This results in having better in-stock positions allowing problems and errors to be rectified quickly.

Data Communication Solutions (DCS) has been assisting retailers with their EDI needs since 1991. Whether you need to start trading electronically with your suppliers or if you need to extend your EDI or e-invoicing initiative to a wider base, our EDI Consultants can help. DCS offers full EDI development and implementation along with Managed Services and EDI support. Contact us today to learn more.

EDI Retail Document Standards

GS1 has developed standards that uniquely identify products for the benefit of consumers and for search engines, providing accurate and complete product information digitally. Major e-commerce companies such as eBay, Amazon and Google Shopping require companies to use a GS1 number to sell on their websites.

Also part of GSI:

Voluntary Interindustry Commerce Solutions Association (VICS) develops supply chain solutions. The Company offers a cross-industry standards platform that addresses issues such as sales, inventory control, cost analysis, collaboration, planning, forecasting, and replenishment. VICS caters to e-commerce, retail, wholesale, and distribution industries.

GS1 has currently two sets of complementary eCom standards: – GS1 EANCOM® – GS1 XML. Both of them are being used in parallel by different users, although XML is better adapted to exchange information using the internet based technologies.

Tradacoms is an early standard for EDI primarily used in the UK retail sector. It was introduced in 1982 as an implementation of the UN/GTDI syntax, one of the precursors of EDIFACT, and was maintained and extended by the UK Article Numbering Association. The standard is obsolescent since development of it effectively ceased in 1995 in favor of the GS1 EDI EANCOM subsets. Despite this it has proved durable and the majority of the retail EDI traffic in the UK still uses it.