Process Automation in Electronic Commerce
CFO’s searching for process automation savings should look to their existing Electronic Data Interchange and E-Commerce tools. Adding more customers, transporters, or vendors can be done economically using existing systems. The ROI exceeds 100% due to:
- Prompt action
- Elimination of data entry cost
- Wider shipment windows without data entry time
- Greater customer satisfaction from quick, accurate shipment notices
- Faster cash flow resulting from e-invoicing and EFT payments
Since the skills necessary to achieve these savings are at hand, mini-projects completed on a time available basis can generate significant savings. Having a DCS Consultant at hand helps by assisting your staff over rough patches. Our DCS Process™ is formalized so your improvements will be done thoroughly, quickly. and economically. We also provide training, which then boosts self-reliance.
Managers have long sought to boost productivity by replacing manual with automated processes. Most successes occur when change occurs incrementally. An example is gradual implementation of supply chain improvements: setting more links between customers and your ERP system. This typically includes receiving more data for better customer order management or adding more customers. These tasks are incremental. They are also small enough so the ROI can be calculated accurately.
During the past decade, most American manufacturers have implemented EDI. Unfortunately, it was done painfully due to complexity and sudden key customer deadlines. While all understood the concept of linking ERP systems, the necessity to perform optimally in several industries such as OEM and after-market caused pain and anger. Looking back, many now deny the concept is valid or have sworn never to re-visit the issue. Fortunately, the techniques have evolved.
There are six key means to improve process automation the CFO should pursue:
- Add more customers or add more documents. EDI typically occurs with only key customers. A brief survey will surface important customers that require your customer service staff to access to a Web site for their purchase orders. Most of these can also supply EDI X12 format documents. Beyond purchase orders, the most useful document is the inbound Forecast. If reliable, it greatly helps production planning. Another document to consider is the outbound invoice/inbound ACH payment. Customers do not have to issue purchase orders by EDI to accept invoices. They benefit by the elimination of data entry.
- Add transporters. Shipment information is typically checked at carrier Web sites. This is also a labor intensive, tedious, and error prone process. It would be better if shipment information is brought directly to the screens used for customer sales order or vendor purchase order management. The documents with the greatest pay-off are inbound shipment status messages that provide shipment times (departure, estimated arrival, and actual arrival), description of contents, etc. This document boosts productivity at the dock, in customer service, and purchasing. As a plus, the integration works for both customers and vendors.
- Add key vendors. Purchase orders or forecasts issued by EDI (instead of posted on Web sites) automatically enter the vendors sales order screens. This means faster response due to the elimination of data entry time and reduced errors. The PO is also acknowledged electronically so your buyers can learn of challenges early enough to address them. This approach also boosts “organization” as all details must be complete and accurate before the purchase order or forecast is sent. (After shipment a vendor may be asked to invoice electronically, which eliminates accounts payable data entry.)
- Secure data transmission is now necessary. Most companies are moving Internet traffic to the national standard: EDI INT AS2. This eliminates costly VAN fees by trading data directly with your customers/vendors. All data is triple-DES encrypted, certificates are exchanged with each connection, and firewall integrity is maintained. (AS2 software typically is $2,000 to $10,000 plus a week for installation and testing.)
- 1SYNC should be your electronic catalog. It automatically updates prices, part numbers, pack, weight, ship-to addresses, and most other information directly into your customer’s ERP systems. This means instant updates so current prices and part numbers are used.
- Automate web form data. Web forms are commonly used by many companies as an easy option for exchanging data. The use of many different web forms can be tedious and extracting the data from these automatically, can speed up your EDI processes and eliminate manual data entry. Follow this link on Reducing Web Form Delays for more information
These productivity boosters use your existing EDI and ERP systems. Since your EDI system likely supports both X12 and XML the process automation cost is mainly integration services.
Process automation achieved by boosting EDI integration can be done in small steps as directed by you with a small team of I.T., customer service, purchasing, and shipping managers. Since the tasks are small, they can be done on a time available basis.
DCS can help you take the first steps, then your I.T. staff can tackle other steps such as adding subsequent customers, transporters, or vendors with DCS assistance. The benefit of an on-call resource like DCS is our knowledge of industry e-commerce practices. Second, DCS will ensure processes are controlled by properly setting system management tools. Later, when automated operations are underway, DCS will help when problems arise. The solutions are explained so skill-sets and self-reliance are boosted. The first step is to email DCS for your no-cost assessment.