The key to effective decision-making is having relevant and accurate data at your fingertips. This is where electronic data interchange (EDI) can help. EDI reduces errors, which significantly improves data accuracy. EDI can capture data such as:
- the number of purchase orders and invoices exchanged
- the number of invoices waiting to be issued
- how long the delivery of goods take from the time they’re ordered
- the orders, or the percentage of them, that are fulfilled in a certain period
- and more.
Let’s have a look at how best to use this data.
See your top suppliers by volume and value
Seeing who your top suppliers are, either by the volume or orders you raise, or the value of them, is useful for any retailer to know. It’ll let you know what your key relationships are, because after all, the old 80/20 rule applies here – around 80% of your stock is likely to come from 20% of your suppliers. EDI gives you easy access to this information.
Improve stock management
Whether you’re a retailer or a supplier, having data on buying patterns can help optimise your stock management. EDI captures what’s being ordered, how much of it and when, which can help you identify trends. This will help you better predict demand, and help with just-in-time ordering to reduce the risk of overstocking or understocking.
Monitor suppliers’ delivery performance
With a purchase order and an advanced shipping notice, it’s easy to capture data on how long goods are taken to despatch after being ordered, how long they’re taking to arrive after being despatched, and how accurate the delivery time on the advanced shipping notice is. With this data, retailers can add KPIs around delivery and use the information from the EDI messaged to monitor it. You can use this to identify the suppliers that aren’t meeting requirements and might need some attention.
Identify your slow-paying customers
It’s important for retailers to maintain good relationships with suppliers. For them, a big issue can be slow-paying customers. Cash flow is key for any business, particularly for suppliers where margins are generally thin. That’s why it’s important for retailers to monitor their outstanding invoices. EDI data on the invoice captures due dates and a remittance advice tracks when it’s been paid. It’s easy to create report to see, at a glance, which invoices are outstanding. This helps retailers prioritise payments and ensure you don’t miss any payments.
Failed orders per supplier
Keeping track of failed messages, but particularly orders, is key to maintaining a well-oiled supply chain. After all, if an order doesn’t reach a supplier, you can be sure the stock won’t reach you or your customer. By monitoring failed orders, you can identify the orders that need troubleshooting. It could be a one-off issue, but if not, it also allows you to recognise consistently troublesome suppliers and reach out to them.
If you’re interested in learning more about how EDI helps with decision making, request a call from our EDI team below.