Monthly Archives: May 2020

15/05/2020

5 ways to make savings in your business when times get tough

A lot of us have had a chuckle at this meme:But it’s no joke. It’s times like these that often spur us into action. Whether you’re looking for ways to overcome the current economic downturn, prepare for the next one or you’re just looking for ways to reduce costs, have a look at these five things you can do to make savings:

Automate your supply chain

If you’re still emailing orders and invoices, you’re probably doing more data entry than you need. It might look like this:
  1. Buyer manually enter purchase order in their software.
  2. Buyer send order to supplier via email or post.
  3. Supplier receives order and manually enters the purchase order details into their software.
  4. Supplier manually enters the invoice into their software.
  5. Supplier send invoice to buyer via email.
  6. Buyer manually enters the invoice in their software.
This is where EDI can help. EDI connects your software with the software of your partners, automating most of the process. Here’s the difference:
  1. The buyer enters the purchase order in their software.
  2. It’s automatically sent to the supplier and appears in their software.
  3. The supplier actions the PO and then creates the invoice in their software and sends back to the buyer.
  4. The invoice then appears in buyer’s software.
This can save your staff a lot of time, allowing them to work on more high value tasks. It helps suppliers process and send invoices faster, which can improve cash flow. For buyers, invoices can be processed faster and some suppliers even offer discounts for early payments. The automation from EDI can also generate significant cost savings for businesses. Manual data entry errors and the costs associated with fixing them are also reduced through automation. Suppliers can send shipment information through EDI, allowing buyers to prepare in advance and better allocate their warehouse staff and resources. This can reduce receiving costs, particularly labour, for buyers. Check out our blog for more information.

Automate your accounts payable

Often errors are made by incorrectly entering invoice data. Not only does it stop staff from working on higher value tasks, but it can be costly to rectify the errors. EDI makes it easy to implement two- or three-way matching. Two-way matching involves automating the process of checking invoice quantities and values against that on the purchase order. Three-way matching goes one step further and also checks delivery information to verify the invoice is for the same quantity that’s been sent. It not only saves your team time, but can also reduce labour costs.

eInvoicing

eInvoicing allows you to send invoices directly from your software to your partners’. It uses the international Peppol standard to send and receive eInvoices. It’s different from EDI in that you only need to connect to the Peppol network through an Access Point to you can exchange eInvoices with anyone else in the network. eInvoicing produces savings by:
  • Reducing the amount of work required send invoices. This reduces costs and allows your accounts receivables teams to focus on value adding activities.
  • Helping increase cash flow for suppliers by speeding up the preparation and sending of invoices.
  • Helping buyers speed up their payment processing, allowing them to make good on early payment discounts.
Want to learn more about eInvoicing? Check out this blog.

Automate goods receipt

Receiving goods from suppliers can be a time-consuming process. It can be difficult to know when goods will arrive and therefore can be difficult to plan. This only wastes time, money and resources. A way to make savings in this area is to ask suppliers to send you advanced shipping notices (ASNs) directly to your software through EDI. ASNs detail what your supplier is sending, how it’s packed, when it’ll arrive and more. This allows you to prepare to have the right warehouse staff to receive the shipment, saving you money on labour and allowing you to allocate staff more efficiently. Receiving ASNs from suppliers will also allow you to automatically record stock as it comes in. SSCC labels (the barcodes on each unit your supplier sends) correlate to a unit (e.g. a box or container) on the ASN. Scanning each pack as it comes in reduces manual inputting, saving your warehouse team time and reducing the risk of costly inputting errors. It also means your stock levels will always be up-to-date.

Consider alternative models with suppliers

A large cost for retailers can be for warehousing and logistics and that’s why savvy retailers are turning to drop shipping. The drop shipping model sees the supplier hold stock. When the retailer makes the sale, they pass the details onto the supplier to ship the order to the customer. EDI can create even more efficiency in this model by:
  • Sending orders directly to suppliers when the order is placed
  • Reducing errors and the related costs
  • Keeping you updated on suppliers’ stock levels, helping you avoid shortages of goods.

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15/05/2020

Why are retailers moving to drop shipping and EDI?

Increased pressure for high margins has made more retailers look to alternative business models. One of these is drop-shipping. Retailers are moving away from just physical stores and warehouses to drop shipping. This is often coupled with e-commerce stores. As retailers adopt drop-shipping, they’re also starting to look at ways to make fulfilment fast and accurate. This is where EDI comes in.

What is drop shipping?

Drop-shipping involves retailers asking their suppliers to ship products directly to the customer. This means the retailer doesn’t have to invest in warehousing and logistics. The process typically looks like this:
  1. The customer places an order
  2. The retailer sends that order to the supplier
  3. The supplier prepares order
  4. The supplier ships the goods to the customer
There are a number of benefits of drop-shipping for retailers:
  • It’s easier to get started It can be as simple as setting up an ecommerce website and sending orders to your suppliers.
  • It lowers costs and capital investment There’s no need to hold excess stock so overheads are reduced. Logistics costs are also reduced or eliminated.
  • It allows you to sell a wider selection of products You don’t have to hold stock, so you can sell as many product lines as you like. And there’s no limitation on how many suppliers you work with.
  • It’s easier to scale your business As your business grows, you don’t need to think about increasing your store locations. Your costs vary according to the orders you make. This significantly reduces risk for your business as your fixed costs are reduced.

Why use EDI with drop-shipping?

Automate ordering processes

Drop shipping can bring a lot of benefits for retailers but it’s only successful if it’s done efficiently. Retailers typically need to submit orders through a supplier portal or by email or post. It’s time consuming and can cause errors, leading to slower delivery times and low customer satisfaction. But EDI can automate the ordering process. Retailers can send orders directly to suppliers’ software from their software, reducing the time to get the orders out, as well as costs.

Real-time visibility of orders

Another issue manual drop-shipping can present is a lack of visibility. Retailers can receive little to no information once they place an order – they’re often in the dark about the status, including whether the order has been sent to the customer. With EDI, suppliers can send advanced shipping notices or despatch advices to let retailers know when an order is being shipped. This often includes tracking numbers and other shipment information, which the retailer can use to update their customer.

Visibility of suppliers’ stock

With drop-shipping, retailers don't need to hold the inventory themselves, so it’s important to keep tabs on suppliers’ stock levels. Having no visibility of it can lead to long delivery times or even having to let a customer know that the item is no longer available. Using EDI, retailers can request suppliers’ stock levels so they always know what’s available.

How to get started

There are a few steps to go through to get set up with drop-shipping and EDI. You’ll probably have existing relationships with your suppliers, so your next steps might be to:
  1. Establish a drop-shopping arrangement with your suppliers Work with your existing suppliers to see which ones are willing to enter drop-shipping arrangements. You can also discuss the opportunity with new suppliers who can add a wider range of products to your offering.
  2. Move to EDI integration with your suppliers Speak to an EDI provider, like MessageXchange, to get you connected to your suppliers. EDI providers have different experience and pricing so it's important to review all your options. Check out our blog for things to think about when looking at EDI providers.
  3. Test connectivity and messaging Once you've chosen your provider you'll need to test the connectivity and messaging to make sure everything is working correctly. You'll also need to test with your suppliers to make sure they can send and receive messages correctly. Check out our message compliance testing (MCT) tool for fast and accurate supplier onboarding.
  4. Go live! You're ready to get started and start selling!

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08/05/2020

Portal to integration: Why switch?

Suppliers have two main ways to comply with their retailers’ EDI requirements: EDI webforms (web portal-based EDI) or integrated EDI. Portal or web-based EDI is often the go-to choice for suppliers just starting out. EDI web portals They’re usually easy to setup and simply use a web browser to send messages to your retailers. The process normally looks like this:
  1. You receive the order to your EDI portal
  2. You send the order details to your warehouse team to prepare order
  3. You then manually enter the purchase order response (this lets the retailer know what you can fulfill)
  4. Once the order is finalised, your warehouse team prepares the advance shipping notice (ASN – this lets the retailer know what’s being shipped, how and when)
  5. You send the information to your accounts receivable team
  6. Your accounts receivable team input the information into their software to prepare the invoice.
If you receive a lot of orders, this process requires a lot of manual inputting, which is time consuming and error-prone. Integrated EDI Integrated EDI simplifies this process through automation, eliminating manual reinputting.
  1. You receive the order in your existing software automatically which you can send to your warehouse team. If you have a warehouse management system (WMS) and integrate it to your ERP software then the order can be automatically sent to your warehouse team.
  2. Once your warehouse team check your inventory, you can then send a purchase order response (POR) back to the retailer. The POR is prepared using the existing information from the original order. You can also automate the sending of the POR by integrating your WMS with your ERP software to send PORs without inputting anything.
  3. You then manually enter the purchase order response (this lets the retailer know what you can fulfill)
  4. Once the order is prepared and ready for shipping, you can then send an ASN to the retailer. If you use an WMS, you can integrate with your ERP and automate the creating and sending of the ASN. An invoice will then be automatically sent to the retailer using the information from the POR.

Why do suppliers switch to integrated EDI?

There are a number of reasons why business switch to EDI:
  • You can use your existing software
  • There’s no need for data re-entry
  • You can automate manual processes
  • It improves data accuracy
  • It helps with faster order processing.

Making the decision: EDI web portal or integrated EDI?

There are a few factors to look at when deciding if integrated EDI is best for you, including:
  • The amount of orders you receive, the number of products you sell and the amount of information that is required from your customers As these factors increase, so does the amount of manual inputting you will be required to input into each form.
  • The functionality of your software For example, if your retailers require an advanced shipping notice with SSCC labels. Can your software produce these? We go through this a bit further in this blog.
  • Your strategic goals For example, if you want to integrate with other systems or automate other business processes.
Use these points as a rough guide to know when to consider integrated EDI.
  • You trade with a large number of retailers
  • You receive more than roughly 30 orders a week
  • You sell a large range of products
  • Your customers require a substantial amount of information
  • You want automated processes
  • You don’t want to double-enter data
  • You need a flexible solution that grows as your business does

How to get started

There are a few things you can do to prepare for the switch to integrated EDI.

Who should be involved?

To get buy in from your business you’ll need to get relevant departments involved. These include:
Management
Often will be the first you need to get involved. Make sure to calculate your cost savings and ROI with your current:
  • costs of processing orders
  • costs of rectifying order mistakes
  • costs of resolving disputed/returned shipments
  • costs of producing invoices
  • costs of resolving disputed invoices.
For more information on calculating costing savings and ROI check out our whitepaper.
Information Technology
To get buy in from your IT team, you should think about these things:
  • Will they need to buy or install any new hardware or software? Some solutions require new hardware or software to be installed. Here at MessageXchange, we don’t require our customers to install any new hardware or software. We simply connect to your existing software.
  • Will they need additional resources to implement EDI? This is dependent on the EDI solution you use. With our technology, your software only needs the ability to import and export messages and exchange them via a secure connection protocol. Check with your IT team whether they can currently do this. If not, what resources will they need?
  • Does the provider adhere to your security policy? IT teams are often aware of security risks to your internal systems. Put their mind at ease by showing what measures your EDI provider takes to keep your data secure. MessageXchange is ISO 27001 certified and having developed the software from inception, owns its intellectual property.
Finance
Another department that’s processes are influenced by EDI is finance. It’s important to not only show the savings EDI can make for the business but also the reduction in manual processing, leading to:
  • improved efficiency, allowing staff to work on higher value tasks
  • fewer errors: less time and costs to fix mistakes
  • reduced costs: no need to printing and archive paper invoices.
  • more accurate data for decision making.

The nitty gritty

Before implementing integrated EDI, you’ll need to think about these things: Who are you trading with and what messages do you need to exchange? Retailers will often send you information packs to get you started with EDI that will include the messages they need you to exchange. It could be purchase orders, purchase order responses, advanced shipping notices, invoices and more. Ask your retailer or speak to your EDI provider if you don’t know what’s required. Next, you’ll need to know the file format you’re required to exchange: This is likely to be EDIFACT D01B or D96A or XML. If you don’t know what your retailer is expecting, have a chat to your contact there or your EDI provider. You’ll also need to find out what your software is capable of, in relation to:
  • The documents your software can use. For example, if your customer requires an advanced shipping notice and SSCC labels does your software support that?
  • The file formats it can import and export, like XML or CSV.
  • The connection protocols it accepts, like sFTP or API.

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Things to know about STP

04/05/2020

Key to onboarding: Message Compliance Testing (MCT)

Onboarding your suppliers to EDI is an exciting time, but it can be challenging, particularly when it comes to EDI message testing. If you’ve undertaken an onboarding exercise before, you’ll know that suppliers rarely get it right the first time around. Testing EDI messages often involves lots of effort from your team to process messages and communicate back to the supplier after each test. We’ve onboarded thousands of companies to EDI and our team have seen first-hand how resource-intensive it is. The good news is we now have a message compliance testing (MCT) tool. It simplifies the testing and compliance process to get you up and running with your suppliers faster. Your team will never have to let a supplier know that they’ve missed out a field again. Just think of the time and cost it could save!

What is message compliance testing (MCT)?

MCT is a service that allows companies onboarding to EDI to test their messages automatically before moving to a production EDI environment. It helps your suppliers to start trading via EDI as efficiently and effectively as possible.

How does it work?

Traditional EDI testing is a manual and resource-intensive exercise. Whether you do it yourself or outsource it, it usually involves sending suppliers all your EDI documentation (like your MIGs) and then testing each message type with each supplier to ensure they adhere to your requirements. This involves a lot of back-and-forth communication which is time consuming for everyone.
Define and setup your process
Our MCT tool lets you define a step-by-step process for your trading partners to test against your EDI requirements. The tool can replicate the different day to day business scenarios that you experience in your supply chain and then replicate them in your testing. For example, this could be:
  • Receive a purchase order
  • Send back a corresponding purchase order response accepting the order in full
  • Send back a corresponding purchase order response rejecting the order in full
  • Send back a corresponding purchase order response with a different quantity for one line
  • Send back a corresponding despatch advice
  • Send back a corresponding invoice
The syntax and business rules will be setup in the background for your suppliers’ messages to be validated against. For example, if you need the date in a particular format or a POR to include the reduced quantity. The process is designed to meet your business requirements and can be as simple or complex as you need.
Invite your suppliers
Once you’ve invited your suppliers to join, they can start the certification process.
Start the certification
They’ll be taken through your process where they can generate messages that they would receive (like a purchase order) and confirm that it can be processed on their side. Then they’ll be prompted to upload their messages to be validated against your syntax and business rules. Unlike manual EDI testing, our software will identify each error and feed the information back to your supplier in plain English. They can fix up the errors and try again.
Watch suppliers’ progress
Our reporting lets you monitor where each supplier is in the process and will let you know if anything needs actioning on your side.
Move to production with confidence
Once the whole flow is completed, you can move them to production with your mind at ease that their messages, business processes and rules will be compliant.

What are the benefits?

For those onboarding large communities to EDI:
  • Reduce costs and less internal resources Automating your testing reduces the need for internal or outsourced resources.
  • Easily monitor progress Our dashboards and reports make it easy for you to track the progress of your community.
  • Increase testing capacity You’re not limited by how quickly your team can support your partners. All your suppliers can test at once.
  • Faster problem resolution Your suppliers can find issues in messages and fix them straight away.
  • No additional software required Our MCT service is accessible through a browser, anywhere with internet.
  • 24/7 access It’s online and can be accessed at any time.
For those being onboarded to EDI:
  • Move to production faster You don’t have to wait for anyone to get back to you with your results – see them on screen as you go. Fix the issues up straight away and try again. Once you’ve completed the testing, you’re ready to move to production.
  • Troubleshoot errors straight away Errors are shown quickly once a message is sent – no need for back and forth communication.
  • Test whenever it suits you It’s online, so all you need is a browser.

How do you get started?

We’ve made the process as easy as possible.
  1. Get in touch with us.
  2. We’ll document your messages, workflow and business rules.
  3. We’ll go away and configure it.
  4. You’re ready to roll it out to your suppliers.
We can configure your setup to any file format (including UN/EDIFACT D01B, UN/EDIFACT D96A, ANSI ASC X12, cXML, GS1 EDI and more) and business rules; it’s completely customisable. Click here to find out more. Or if you’re interested in learning more about our MCT tool, request a call back from one of our team.
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