Are You Prepared for a World Without EDI?

Do you remember the days when business was run through computers that were disconnected?  It’s certainly been a while, but that’s when EDI helped businesses exchange data to save time and cost of transmission. 

EDI has continued to play a significant role over the last five (5) decades.  However, over the last twenty (20) years there has been a major shift in the industry because of Internet technology:

              ·         Computers are now seamlessly connected

·         And data transmission cost is ZERO. 

The only thing that has not changed is EDI.  At this point, it just delays communication and increases your cost per order as a supplier. 

Everybody wonders then: “Why are companies still using EDI?”   The simple answer – resistance to change – AND denial of harsh realities.  The fact is, many retail players are going out business – but not because of their product line—it’s because of antiquated technology and their inability to adapt. 

The unrelenting pace of eCommerce and the proliferation of drop shipping is forcing retailers to rethink the use of such an outdated tool as the backbone of their business operations.  They need technologies that work in real time that allow data to be transmitted from one system to another in seconds WITHOUT those expensive EDI Document fees for themselves and their suppliers.  Progressive retailers such as Wayfair are already moving in this direction and others will follow. 

As a supplier you know that all companies, large or small, that sell product on-line or for warehouse fulfillment to retailers and e-tailers eventually find themselves in a position where they need to rely on EDI to communicate with them.   It’s a hassle, forcing many suppliers to employ individual(s) just to manage it and keep it accurate.  

So, does EDI really have a sustainable future?  Some experts are predicting as little as five (5) more years before it’s obsolete in its current form.  

That means that, as a business, you have two options:  You can continue as things are and possibly wait till it’s too late, or you can investigate OPAL.  

OPAL (Order Processing and Logistics software) has already eliminated current EDI charges for communication with your retailers and 3PLs – AND already has the capability to provide this communication in the real-time method that retailers will be coming to expect.  

The “Perfect” Drop Ship Order – What’s at Stake?

What does a “perfect” drop ship order really mean? If you believe you know, you also know that managing the multitude of moving parts necessary to achieve it can be mind boggling.

We’ve written of managing the “perfect order” before and that OPAL (Order Processing and Logistics software) can help you succeed, but it’s really important to understand what is at stake for your business.  With an average warehouse pick and pack cost of $4 - $7, plus a minimum of $2 - $4 order processing labor cost, and at least $1 in EDI document fees per drop ship order, the profit on many items is already being squeezed now that you’re shipping individual parcels instead of pallets.

And, then, when an order goes wrong everything stops! You spend an enormous amount of extra time and effort researching and correcting the problem and very often incur the expense of a call tag to retrieve the incorrect item and expedited shipping of the product that didn't arrive when or where it was supposed to. Then, to top it all off, you receive Vendor Compliance Penalties averaging 1% or more of revenue from your retailer and your Vendor Score Card suffers.   If it’s a chronic problem, your retailer doesn’t want to work with you anymore. 

The American Productivity and Quality Center, (APQC) defines the “perfect order” as flawlessly taking and fulfilling a customer order. This includes entering the order correctly, allocating inventory immediately, delivering the product on time, and sending an accurate invoice. Then your retailer adds on additional requirements such as all the necessary EDI documents (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling, shipping documentation and accurate, on-time inventory feeds

It is speed and accuracy that makes a supplier valuable to their retailer.  Your inability to perform costs retailers billions of dollars every year in unexpected rework and processing.  This is what is at stake for your business.

So, what makes OPAL different and what does it mean to you? 

OPAL is 100% compliant with nearly 100 retailers – and new ones are being added each month. OPAL processes a retailer’s orders for the supplier and complies with all necessary transactions (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling, shipping documentation and accurate, on-time inventory feeds.  This performance standard makes you very valuable to your retailers, increasing your business with them.

OPAL also reduces your operating costs because it processes orders with a no-touch, self-driving (autonomous) approach that works 24x7, without the need for an additional Warehouse Management System, Shipping Software, Retailer Portal or EDI document charges.  And it does it in less than 8 seconds per order.

Lastly, it increases your overall productivity by reducing Order Processing time by up to 90%, Order Processing Cost by up to 80% and Undelivered Packages to less than 1%.  It even increases Order Accuracy up to 99%, as well as Picker and Packer Productivity and Daily Shipments by up to 50%. 

Consider OPAL as your solution, an intelligent software system that manages the order processing and fulfillment workflow in a method that is efficient and retailer compliant.  Power up and power on with OPAL. 

Are Vendor Compliance Penalties Inevitable?

Like the cost of EDI, many suppliers believe that Vendor Compliance Chargebacks are just a cost of doing business and have resigned themselves to accepting less revenue and profit.  But, also like EDI, chargebacks DO NOT have to impact your revenue and profitability.  It can be a win-win situation.

The truth is that non-compliance by suppliers can cost retailers literally billions of dollars in unexpected processing and rework.  When you, as a supplier, make money for your retailers they will value your relationship more highly.  When you don’t, the opposite is true and it will be reflected in your Supplier Scorecard and subsequent penalties.

In fact, it’s estimated that Vendor Compliance Chargebacks can now amount to 1% or more of revenue due to a supplier’s failure to comply with retailer order, billing and shipping requirements. 

To this end, large retailers like Wayfair and Walmart recommend OPAL to their suppliers in order to address these issues – for two very important reasons: 

1.       OPAL is 100% compliant with not only Wayfair and Walmart requirements, but also nearly 100 other retailers – with new ones being added each month. OPAL processes a retailer’s orders for the supplier and complies with all necessary transactions (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling, shipping documentation and accurate, on-time inventory feeds in just a few seconds per order.  This speed and accuracy makes a supplier much more valuable to their retailer. 

2.       For the supplier, OPAL processes orders with a no-touch, self-driving approach that works 24x7, without the need for an additional Warehouse Management System, Shipping Software, Retailer Portal or EDI company.  It also reduces Order Processing time by up to 90%, Order Processing Cost by up to 80% and Undelivered Packages to less than 1%, while also increasing Order Accuracy up to 99%, Picker and Packer Productivity and Daily Shipments by 25%-50%.  All without EDI charges. 

Stopping Vendor Compliance Chargebacks comes from taking the time and resources to understand why the problems are occurring and the steps that must be taken to keep them from occurring in the future.  Implement OPAL, an intelligent software system that autonomously manages the order processing and fulfillment workflow in a method that is always retailer compliant.  Power up and power on with OPAL.

Brick and Mortar Sales Are Not Dead – But They’re Far From Healthy

A recent Washington Post headline just stated: Retail apocalypse’ now: Analysts say 75,000 more U.S. stores could be doomed”.  ”Widespread closures have roiled the retail industry, but many more stores are likely to shut down in coming years to keep up with a shift to online shopping, according to a report by investment firm UBS.” 

The main reason for the shift, analysts say, is simple: Americans are increasingly shopping online. The average U.S. household spent $5,200 online last year, up nearly 50 percent from five years earlier.  That’s a lot of small parcel and large parcel deliveries to home addresses! 

This indicates that your future as a supplier is in transition.  Do you continue to focus on large pallet shipments to these retailers or do you start, or do you expand, your e-Commerce footprint

Unfortunately, to do this, it takes as much time and effort to process, pick, pack and ship a $20 order in the Direct to Consumer world as it does a $200,000 order in the Direct to Store or Direct to Distribution Center world.  And the number of orders going Direct to Consumer are exponentially larger

So, consider this very real situation as an e-Commerce Supplier:  You are handling at least 50 drop ship orders each day, selling to multiple sales channels such as Amazon, Target, Home Depot, Walmart, Wayfair, e-Commerce sites, etc., creating packing slips, creating shipping labels, creating customized pick lists, scanning orders, sending tracking numbers and invoices to trading partners, updating accounting systems, and tracking packages. 

Then you need to send up-to-date, accurate inventory feeds to all of your sales channels – as often as once every hour!  Not to mention you still have the warehouse manual process of picking and packing all of those smaller parcels. 

To not only survive but thrive, you need speed, efficiency and scalability.  This means: 

·         You Just pick and pack and an autonomous system does the rest for you

·         Warehouse pick and pack is optimized, growing the number of daily shipments made by 25%-50%

·         Nothing else is needed – no Warehouse Management System, shipping software, EDI companies or retailer portals

·         And, you can grow your business without increasing your costs or hiring additional employees. 

You can take control of your future and see how you can ensure future success and an unmistakable competitive advantage.  Not only can you outlast and surpass competitors who either ignore or simply don’t know until it’s too late, but you can also realize a quantum leap in profitability with a huge savings in time and labor costs.  Power up and power on with OPAL.


The Definition of e-Commerce Supplier Success

If you are handling 50+ orders a day, selling to multiple sales channels such as  Amazon, Target, Home Depot, Walmart, Wayfair, e-Commerce sites, etcetera , creating packing slips, creating shipping labels, creating customized pick lists, scanning orders, sending tracking numbers and invoices to trading partners, updating accounting systems,  tracking packages, and sending inventory feeds to all of your sales channels – all without a single keystroke or EDI charge – then, you’re a success! 

So, if the only manual process you need is picking and packing and you’ve already increased the productivity of your warehouse pickers and packers by 25% - 50% per day, then you’re truly leaving your competitors in the dust! 

This means that:

·         You Just pick and pack and an autonomous system does the rest for you

·         Nothing else is needed to run your entire operation

·         There isn’t a need for a Warehouse Management System, shipping software, EDI companies or retailer portals

·         And, you can grow your business without increasing your costs or hiring additional employees. 

However, if this doesn’t describe your situation, then you’re probably aware that the retail landscape and consumer expectations are changing rapidly and your retail partners are expecting more and more of you to remain competitive.  This is most evident in the increasing pressure placed on you to drop ship from your warehouse directly to the consumer’s doorstep at a faster and faster pace.  

Unfortunately, this changing landscape impacts your business in the areas of order processing, your consumer’s experience, warehouse operations and even accounting.  To not only survive but THRIVE you need to have speed, efficiency and scalability.  

You can take control of your future and see how you can ensure future success and an unmistakable competitive advantage.  Not only can you outlast and surpass competitors who either ignore or simply don’t know until it’s too late, but you can also realize a quantum leap in profitability with a huge savings in time and labor costs.  Power up and power on with OPAL.

How to Increase Daily Warehouse Shipments AND Revenue $$$

There are some pretty compelling reasons to be a drop ship vendor for one of the big (or small) retailers or e-tailers.  Things like the potential to have better margins, the ability to be nimble and react quickly to market demand, and a revenue steam that isn’t dependent upon just a few retail sales channels.

Unfortunately, there is also a dark side to all of this goodness so if you could do any of the following would it be helpful? 

·         Cut your order processing time by 90%

·         Cut your order processing cost by 80%

·         Increase daily warehouse shipments by 25% - 50% per day

·         Send accurate Item Inventory to all of your retail sales channels when they want it 

Let’s face it, from an order processing perspective you’re now processing small parcels by the hundreds or even thousands each month, the cost to process an order hasn’t changed but is now multiplied by all of those small parcel orders, the increase in orders has caused EDI costs to skyrocket, and you’re finding yourself in more overselling, underselling or chargeback situations with your retailers because it’s so hard to accurately represent your inventory to them in a timely manner.

This is costing you money because as the number of orders increase, so does your order processing cost.  You can’t seem to get ahead of the curve.

From a warehouse management perspective you are now picking, packing and shipping an enormous number of smaller parcels, your customers are expecting their orders to be shipped and delivered in as little as 24 hours and they want to see real-time order confirmation and package tracking information.

This is losing you revenue because your warehouse is a bottleneck and can’t keep up with the demand.

OPAL provides the productivity that overcomes these problems within one platform and without the need for numerous integrated systems.  OPAL is a self-driving Order Processing and Warehouse Productivity Software Solution that enables your business to easily and quickly cut order processing costs to less than $1 per order, increase the order handling capacity of your warehouse  and achieve profitability expectations that you may think are unattainable.   

Check it out at www.meetopal.com.

EDI is NOT Forever – That’s Good News

All companies large or small that sell product on-line or for warehouse fulfillment to retailers and e-tailers eventually find themselves in a position where they need to rely on EDI (Electronic Data Interchange) to communicate with them.  But does EDI really have a sustainable future? 

Probably – for a while – there’s certainly a large EDI industry out there that is doing quite well charging you fees per 100 characters for transmitting and translating data for your business. 

However, this is one of OPAL’s distinguishing characteristics– the OPAL solution has an inbuilt EDI engine that does NOT charge for EDI transmission, as well as providing touchless, self-driving (autonomous) order processing on a 24x7 basis. 

OPAL is even prepared for the future with an Application Program Interface (API).  APIs are a messaging format that allows data to be transmitted from one system to another in nanoseconds WITHOUT those expensive EDI Document fees.  Because of the Internet, the speed of data transmission has increased by a 100 fold today.

While EDI has continued to play a significant role over the last five (5) decades, business processes have changed.  The only thing that has not changed is EDI and the Industry that continues to promote it.   

Given all of that, everybody wonders why do we still need EDI?  The answer is simple – resistance to change. Traditional businesses have been using it for so long that they no longer question it.  EDI companies, on the other hand, cannot change without destroying their revenue stream. 

It’s important to note, though, that a growing number of your retail sales channels have implemented APIs that can be used by their suppliers if you’re ready to use it.  OPAL makes you ready.

How to Increase the Profitability of Drop Ship Orders

Unlike the old days when you were shipping large pallet orders a few times per month, the transition to drop ship orders can be pretty traumatic.  The pain extends all the way from order processing where you are now going through the same old steps, but for potentially 100s or 1,000s of orders per day.

Then you can add in the compliance requirements your trading partners have surrounding acknowledgements, ship notices, inventory feeds, etc., etc., and their branding requirements.  Not to mention mounting chargebacks if something isn’t done perfectly. 

And, lastly, there’s the chaos it creates in your warehouse or 3PL because the warehouse layout and optimal picker and packer productivity needed to handle large numbers of small parcel shipments is so entirely different from normal pallet shipments.

All in all, this makes adequate profit hard to achieve…especially with small basket size orders.  Trading Partner portals, EDI companies, ERPs and Shipping Platforms certainly ease some of the workload, but there are still a lot of steps that require a human being to sit at a keyboard and make the next step happen.  And Heaven forbid that they make a data entry error along the way!

Consider this scenario…OPAL removes ALL of the manual steps required to process orders, completes all of the transactions required by for over 70 top retailers and e-tailers, is compliant with ALL of their requirements and has the capability to increase warehouse shipment productivity by 25%-50% if needed.

Below is one common example of how it increases profitability just in the drop ship order processing realm.  And this doesn’t even include the time spend at the end of each day to upload your inventory feeds to your Trading Partners or lost warehouse productivity.  Your individual situation may vary, but you’ll get the idea….


Life With and Without Autonomous Order Processing

First thing in the morning: 

Hello, my name is Joe. I am an order processing expert

Hello, my name is Tracy. OPAL is my order processing expert

 

Joe: I’m logging into the portals for all my retailers and downloading the orders

Tracy:  OPAL works 24x7 so all my orders are already downloaded

 

Joe: I’m acknowledging orders on the retailers’ portals

Tracy:  OPAL already sent the acknowledgments for me

 

Joe: I’m downloading the Packing Slips for my orders

Tracy:  OPAL already created the Packing Slips for me

 

Joe: I’m logging into QuickBooks and checking the inventory of each item

Tracy:  OPAL already has the item inventory from QuickBooks

 

Joe: I’m creating the Sales Order for each order in QuickBooks

Tracy:  Sales Orders were already created in QuickBooks by OPAL

 

Joe: I’m Logging into FedEx/UPS/USPS and entering the Ship to Address and creating Shipping Labels

Tracy:  OPAL has already created the Shipping Labels for me

 

Joe: I’m creating a Pick List

Tracy:  OPAL already created the Pick List for me, too

 

Joe: I’m printing and creating a package for the pickers – the Packing Slip, Shipping Labels and Pick List

Tracy:  Already sorted, sent to the warehouse and ready for picking

 

Later that afternoon, once the orders are shipped:

 

Joe: I’m logging into the Retailer’s Portal and updating the tracking number

Tracy:  OPAL has already done that

 

Joe: I’m logging into QuickBooks and converting the Sales order into an Invoice

Tracy:  OPAL automatically converted the Sales Order into an Invoice in QuickBooks

 

Joe: I’m logging into the Retailer’s Portal and sending the invoice

Tracy:  OPAL has already done that

 

Joe: I’m downloading inventory from QuickBooks

Tracy:  OPAL already retrieved the inventory from QuickBooks

 

Joe: I’m creating an inventory file in a different format for each retailer

Tracy:  OPAL has already done that for me

 

Joe: I’m logging into the Retailer’s Portal and sending the inventory feed file

Tracy:  OPAL already sent it – Wow! That was easy

 

To learn more about OPAL, please contact us.

 

E-commerce: The Direct to Consumer Shipment Problem

If you’re not already doing direct to consumer (drop ship) orders they are very likely in your future.  While those big, high dollar pallet shipments are never going away, your retail trading partners are certainly scrambling to become more nimble and grow revenues by offering it to consumers.

If you are already participating in this trend, you are very aware of the challenges and problems this can cause for a supplier.  

It all starts with the use of the retailer’s portal to download the order by your order processing team.  Or, if you are semi-fortunate, SPS Commerce, CommerceHub, HighJump or some other 3rd party company is downloading that order for you and putting it into your order management system (QuickBooks, Sage, NetSuite, etc.).  The reason I refer to this as “semi” fortunate is that they are charging you for every order downloaded.

Next comes the order processing tasks.  This includes things like creating the Packing List, determining the number of boxes and weights, entering the shipping information into the FedEx, UPS, or USPS portal or another 3rd party shipping software, generating shipping labels, printing everything, and having the warehouse pick, pack and ship.

And then there’s order tracking that includes entering the tracking number in your order management system, entering the tracking number in the retailer’s portal, updating inventory and carefully filing the order –  just in case – something goes wrong and you have to troubleshoot it later.

I’m sure you agree that’s a lot of time and effort for what can be a one-item, relatively small basket size order. 

IF ANY OF THIS SOUNDS FAMILIAR, consider the following example:


But that’s only half of it.  Now, what about the load on your pickers and packers in the warehouse?  They aren’t picking cartons and putting them on pallets anymore.  They have to pick and pack individual items for shipping one at a time.  Another huge amount of time and effort for a relatively small basket size order.   

To this end, OPAL also provides further savings in the pick, pack and ship process.  It’s surprising but many business owners can’t actually identify the utilization of their pickers and packers and this labor can be another $4+ in the cost to complete that drop ship order that has already absorbed the EDI cost and order processing labor cost.

To get a handle on this you need – at a minimum – the tools to know today’s order volume, determine the warehouse Location based on item availability and shipping location, determine the number of packers needed based on today’s order volume, determine the number of pickers needed based on today’s order volume, predict tomorrow’s order volume and staffing needed, and automatically generate Shipping Labels, Packing Slips, etc. without manual intervention. 

And wouldn’t it be awesome to track picker and packer productivity, the cost of pick and pack and ship, and increase the number of shipments you can complete each day?  Absolutely!

As I said earlier, IF ANY OF THIS SOUNDS FAMILIAR, then you should really take a look at OPAL, an order processing and logistics software solution designed to handle this workload autonomously and provide you with the rapid return on your investment your business needs.