Enabling Seamless EDI For DTC Shipping With A Consumer Goods ERP

How to best prepare for the direct-to-consumer (DTC) future is top of mind for most consumer goods importers and distributors. In our previous blog post, we covered the challenges, requirements and best practices for mastering direct-to-consumer shipping with a consumer goods ERP.

Because the landscape of retail fulfillment has shifted so dramatically in the past few years, best practices for direct-to-consumer shipping must shift as well. In this post, we highlight how Electronic Data Interchange (EDI) can offer significant benefits when it comes to DTC shipping.

What is EDI?

Simply, EDI takes the place of paper-based business exchanges and digitizes those communications. EDI Basics defines EDI as “the computer-to-computer exchange of business documents in a standard electronic format between business partners.” EDI replaces older communication systems like mail, fax, and e-mail with an electronic approach. E-mail is digital, yes, but it also requires a response from a person; EDI information exchanges are processed through computerized systems.

Challenges of DTC Shipping

Before the emergence of online shopping, the traditional fulfillment model was fairly straightforward for importers and distributors; all they had to do was ship full pallets directly to retailers. Now, however, importers and distributors are sending goods directly to the final consumers, and they’re doing it at an exponentially higher rate.

As consumer goods importers and distributors receive more and more direct-to-consumer orders, it becomes a greater challenge to manage all that information. Manually entering all those orders won’t work in this new fulfillment model.

The pencil-to-paper method is too time-consuming, it requires a larger staff to enter in all of those orders, and it means each one of those entries is vulnerable and susceptible to human error as they’re entered and processed. Additionally, without real-time data, there’s no way to monitor or manage inventory in real-time, which has the potential to create larger efficiency problems down the line.

Automation, Validation, and Accurate Real-time Data

When it comes to managing the challenges of DTC, an enterprise resource planning (ERP) system with built-in EDI could be extremely beneficial because it can provide consumer goods importers and distributors with:

• Automation – An ERP with built-in EDI would be able to retrieve and create orders as soon as they’re sent to you.

• Validation – The system automatically validates the information on the order and sends out order acknowledgments as required by trading partners. If there is a validation error or exception, users are quickly alerted so they can quickly resolve the issue.

• Accurate Real-time Data – This is particularly valuable when users are trying to determine inventory availability in real-time. By having a system that is constantly providing you with the most-recent, most-relevant information, it’s possible to communicate with trading partners what inventory is or is not available for orders. Among many other benefits of real-time data, this could be helpful in preventing a single trading partner from consuming all of the inventory, pricing rules to make sure that the right price is put into the orders that are automatically created, and cross-referencing to ensure all information that is pulled in from all orders matches your system.

Value of an ERP with built-in EDI

All of this boils down to one thing: efficiency. That’s the whole point of an ERP with built-in EDI. That’s why automation, validation, and accurate real-time data are valuable components of the system. Importers and distributors want to be able to bring in as many orders as possible while eliminating the risk of error. And if there are errors, it’s essential that users are able to see them in real-time, manage them quickly, and prevent similar problems from happening in the future.

Really, EDI should enable importers and distributors to do the following:

• Reduce costs – The cost of labor that was needed to manually enter and validate manually validate all the data that was entering the business will no longer be necessary.

• Reduce errors and improve data accuracy – Because the processes for business exchanges have been streamlined and set up within a digitized system, human error is no longer a risk factor.

• Build value – Having an ERP with built-in EDI will allow your business operations becomes more efficient, which ultimately leads to increased value in the enterprise. Additionally, your organization is building value by strengthening relationships with your partners – employees are able to quickly and accurately inform partners about the status of their inventory and shipments.

• Improve Supply Chain Efficiencies - A fully integrated ERP can automatically import EDI orders using a scheduler, which can pull in orders as soon as they're sent. With that import, the system can validate the order to make sure the data from the file is correct, and then can translate the data from the file into the fields within the ERP system. As the orders are entered, the system will make sure the inventory is available and will update accordingly as orders are being imported. The system will also validate that all the prices are accurate. This kind of automation and validation is critical with DTC shipping.

An ERP with built-in EDI can meet the requirements of clients because of the following capabilities:

• Integrated EDI mapping

• Numerous inbound and outbound EDI forms

• Integrated maintenance of trading partners

• Validations to ensure that the right data is imported and exported

• Easy visibility into all EDI transactions, warnings, errors, and files

• Intuitive management of all EDI transactions

The shift in the consumers’ buying process requires a change in the fulfillment process; it starts with the right tools and technology necessary to manage and ship high volumes with efficiency.

If you’d like to take a deeper dive into how an ERP with built-in EDI helps importers and distributors overcome their toughest challenges, download our whitepaper on the subject.

Learn more here about how the Aptean Distribution ERP EDI functionality can help you handle all that the DTC revolution throws at you by visiting our Aptean Distribution ERP overview page.