Your EDI Resource

5 Things Your Boss Wants to Know About Data Integration

Posted by Shandra Locken on Fri, Apr 27, 2018 @ 08:30 AM

5780056202_385dcf8f95_zPhoto appears courtesy of Martin FischThis blog was written by Jim Gonzalez, an independent EDI consultant for the Aurora EDI Alliance.  I am often asked what the benefit is for Data Integration. Usually, the person asking is someone on a decision making panel who has the least amount of technical experience. Let’s provide some answers that can put your boss at ease and help you look to Data Integration as a positive change for your business.

  1. First and foremost, having integrated systems will free up time for anyone that is manually entering information. More time means other tasks can be taken care of without adding employee hours and therefore cost.  For example, one of my clients had five full-time Data Entry employees being paid to process Purchase Orders. The same amount of Purchase Orders, are now being processed through an automated system by ONE employee that monitors the Purchase Orders.
  2. Secondly, Data Integration eliminates user errors. You can set up systemic validation that can prevent users from keying in wrong information or from missing mandatory information.  Wrong information and/or missing information is the stuff of chargeback nightmares.
  3. Next, increase revenue and close new business. A lot of your customers (and potential customers) will want to see that your organization can handle things in a timely manner. Some of these big companies (think Walmart) count on their suppliers to operate 24/7. Through Data Integration we can construct a solution that is hands free and runs after business hours and holidays. Computers don’t require a break or time off.
  4. Further, unify your various systems in your company. You might have a Warehouse Management System (WMS) that doesn’t talk to your Accounting System. A well constructed Data Integration solution can communicate and share data between disparate systems to keep things moving seamlessly.
  5. Lastly, the four previous points all lead to one thing - MONEY!!! Data Integration will save you money and help you make vast financial strides.  More money means you have resources to invest back into your business whether it’s new employees, new equipment, or manufacturing.

If you ever find yourself looking to provide ROI (Return On Investment) for Data Integration, you need to look at all facets of your business. Start with areas that will have the most impact overall. Then move onto the pain points to get those alleviated.  Invest in your data and you will be investing in your future as a business.

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Tags: data integration, EDI integration, ERP integration, wms, supply chain

Blockchain in the Supply Chain: Starting Blocks for Success

Posted by Shandra Locken on Fri, Apr 13, 2018 @ 08:30 AM

Photo appears courtesy of Scott RobinsonThis week's blog was written by Aurora EDI Alliance partner, Karen Blood of GraceBlood LLC. You’ve seen the increasing drumbeat of sensational headlines about supply chain blockchain, for example:

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Yes, there’s plenty of excitement and cheering. And phrases like “game-changing” and “massive disruption.”  Reality check - beyond  the technology providers who will make buckets of money and besides the extraordinary effort being put forth in transportation and logistics by Maersk to grow their business, there truly are major and influential supply chain companies like AmerisourceBergen, Unilever and Walmart who have pilot projects well underway, as described in Walmart and 9 Food Giants Team Up on IBM Blockchain Plans.  Walmart has already filed a blockchain use-case patent application, according to this Digital Journal article.  Note that much of the supply chain effort to date has focused on package, pharmaceutical, and food with tracking and provenance pilot projects.

Blockchain technology is nascent and has many challenges to resolve before widespread adoption. While such certainly will not occur in 2018 for supply chain projects, it will happen more rapidly than one can now imagine. Furthermore, this writer believes the technology will be adopted and advanced for supply chain projects far more rapidly than for public financial transactions. See  Fundamental challenges with public blockchains for more on the latter and note how many of the challenges would be minimal for private blockchains.

So, what should the forward-thinking supply chain company be doing now to be better prepared to win the race? What about our current investments in technologies like EDI? How can we continue to best address these common inefficiencies in the supply chain while we’re still at the starting line?

  • lack of transparency due to inconsistent or unavailable data
  • high proportion of manual work
  • lack of interoperability between systems

While lack of transparency within a given company can be addressed by today’s properly used IT systems, the B2B architectures to support emerging supply chain visibility requirements are still evolving. This piece from Todd Margo of IBM, From EDI to Blockchain, does a good job of illustrating the unique transparency nature of the blockchain as compared with EDI and other point-to-point B2B. He says, “Events representing the exchange of B2B documents, for example, could be recorded on a blockchain, and made visible to all participants in a particular supply chain process…The actual exchange of B2B documents that occurs today can continue to operate as is, and a blockchain could simply provide a shared visibility. “

The Starting Blocks...

More than ever, the unchanging company is at risk for being left at the starting line or not being around for the finish. There’s plenty we can and must continue doing – here are our starting blocks:

  • We must document our visibility requirements for sourcing, fulfilling/manufacturing, transportation, and sales for all three kinds of business information – transactional, planning and unstructured.
  • If our worthy goal is to have the right business information in the right hands in the chain at the right time and to have the information flow as hands-free as possible, then we must understand exactly what we are doing today. Gap analysis of today’s processes as compared with our goal will clarify our work plan.
  • Armed with this documentation and understanding, we’re in excellent position to build out our digital supply chain by investing wisely in digital tools to obtain, use and deliver useful real-time data. This means real-time inventory and sales channel results, warehouse management, shipping system integration. It means moving as much transaction activity as possible from manual/email/fax/snail mail to EDI, EFT and APIs/web services. Check out the excellent “Four Steps to a Digital Supply Chain” section in this article from Supplychaing247.com by Bain & Company partners Sam Israelit, Peter Hanbury, Rodrigo Mayo & Thomas Kwasniok.

Along the path to digitization we will resolve many stakeholder integration and interoperability challenges such as data harmonization for items, including identification, units of measure and pricing; location management for warehouse slots, known delivery points, and drop ships; authorities and permission models for data access; meeting compliance requirements; and trading under the latest security initiatives.

Further, to hear the starting gun, you must stay informed about industry and consortium efforts built on blockchain technology. Remember, it took less than 15 years for the internet to disrupt the supply chain, it will take even less for the blockchain.

For basic blockchain information, this IBM article Blockchain basics: Intoduction to distributed ledgers is a great resource.

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Tags: blockchain, supply chain, logistics, EDI

Comparing ROI for Integrated Electronic Trading

Posted by Shandra Locken on Fri, Nov 03, 2017 @ 08:30 AM

33371972730_a10de20de8_z.jpg

Picture appears courtesy of GotCreditThis blog was written by Karen Blood of GraceBlood LLC.  Most retailers and e-tailers, and an increasing number of other businesses, will only purchase from suppliers who will do business via EDI or some other B2B electronic trading platform.  Not to worry:  this mandate can have tangible benefits for your company too. These benefits are both strategic and operational.  B2B electronic capability can strategically give you an advantage by strengthening your relationships with customers and vendors, improving loyalty and long-term alliances. Your “EDI-enabled” business opens the door to increased sales over the same channels – improving your bottom line.  In the process you become more competitive and able to thrive, directly affecting the value of your company.

Operationally, B2B electronic trading reduces both the time and human attention required to complete data entry and order processing. Your integrated capabilities deliver faster order processing with fewer manual errors and faster delivery times which increases customer satisfaction. Decreased operating expenses and improved accuracy in fulfillment and procurement can deliver profits and improve cash flow.

While strategic benefits can be difficult for which to calculate Return on Investment (ROI), we can easily do so for the operational benefits.  For suppliers, a decision on how best to approach a mandate to retain or win the customer’s business should include a careful consideration of ROI.

While many supply chain companies operate with a mix, let’s consider ROI using three approaches, one manual and two integrated:

  1. web-trading, where your orders are picked up, entered, acknowledged, and processed through to an invoice either manually or by visiting a website
  2. on premises integrated, where your routine orders appear in your order processing system and are processed through to invoice by an intermediate system that is located and operated within your business
  3. cloud-based managed services, also integrated and where your routine orders appear in your order processing system and are processed through to invoice through an intermediate system located in the cloud and is operating transparently

ROI may also be useful in evaluating a move from web-trading to one of the integrated approaches or between them.

Let’s look at an example that you can easily tailor and use. First, we calculate our own average cost to process an order. Add up the annual manual or non-integrated order processing expenses – from receipt of order, to entry, to acknowledgement, to shipping notice, to invoice – considering all personnel, overhead and equipment, and adding in any fees charged by customers for using their portal or for failing to comply with their preferred trading approach. Divide this annual total expense by the total number of sales orders processed during the year.  This becomes your cost to process an average order.

Aberdeen studies have estimated typical savings with end-to-end electronic processing of an order as compared to manual in the 60-75% range.   This example projects an average distributor for three customers integrating four documents over the end-to-end order to invoice process and trading 500 orders/month while conservatively projecting a 50% savings for integration over manual processing.

Click below to download a spreadsheet for use in calculating and comparing your own Return on Investment for B2B Electronic Trading. Only a few additional inputs are needed, and these are in yellow. Besides the Average Cost per Manually Processed Sales Order, count your top routine customers and determine the total # of orders you receive from them in a year. Typical transaction types of documents to integrate are the inbound Sales Order, the outbound Order Acknowledgement, Ship Notice & Invoice. Adjust If your partners don’t usually need all four.

This takes care of our Manual or Web Trading column and calculates our cost to process all the chosen customers’ orders end-to-end. For the On Premises column, we must consider our initial investments in software and systems, as well as ongoing operational and maintenance expenses such as staff and transmission fees. These may vary based on your ERP’s capabilities and version, and your customers’ requirements. Similarly, for cloud-based Managed Services, while there may be an initial investment to augment your ERP’s capabilities, the costs for translation mapping, transport and testing are included in the Managed Services Startup Investment while activity, monitoring, maintenance and management is included in the Managed Services monthly Activity.

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While ROI will vary, we can see that in addition to the perceived strategic benefits of Integrating Electronic Trading, we also can simply demonstrate and quantify an operational Return on Investment that is unique to your company.  Of course, adding additional partners – a very wise step to take after initial investments – results in a multiplier effect and adds even more to your bottom line.

Click below for access to the handy spreadsheet illustrated above.

Download ROI Spreadsheet

Tags: EDI ROI, supply chain, electronic data interchange, EDI, data integration, Web EDI, hosted EDI, Managed Services

MSG Segment Should Not Equal "Fine Print"

Posted by Shandra Locken on Fri, Oct 06, 2017 @ 02:26 PM

bigstock-Business-Acronym-Edi-As-Electr-88291748.jpgThis week's blog was written by Art Douglas.

There are strange things done

In the midnight sun

By the men who map and code

The X12 trails have their secret tales

That would make your blood run cold

The o’erhead lights have seen queer sights

But the queerest they ever did see

Was that night late in March

A penalty charge; I was dinged by an M-S-G.

With apologies to the great poet Robert W. Service, I’m referring to the hideous practice of placing MSG segments in EDI messages like Purchase Orders, and expecting your Trading Partner to collect, read, and react to them accordingly.

EDI was never intended to be a word processor.  It’s not the place for boilerplate information like you see in the fine print of every contract.  We have specific places for important information in the transaction set, and the MSG segment is not it. 

Here’s what I mean:

Client X receives 850 Purchase Orders and 860 PO Change notices from their TP “M.”  Buried in every one of those documents is a whole slew of MSG segments that collectively say they better be an Equal Opportunity Employer.  Just between us, isn’t this information more fittingly agreed to before M starts buying from X?  Put it in the Trading Partner Agreement (TPA) – a contract between partners.  I suggest you also put something in there about the TPA not being modified by a unilateral declaration.  Let your lawyer figure out the exact wording.

Client Y receives HL7 transactions to notify an insurer of medical lab test results.  For each occurrence of each test, the sender inserts an entire medical explanation for the test, and a table explaining the meaning for the results.  A test requires a few lines.  Triple that to accommodate the repetitive descriptive verbiage.

Client Z receives an 850 with shipping instructions in an MSG, but not in the correct segments for specifying shipping instructions.  When his shipping office fails to see the instructions in the wrong place, the customer is angry because things didn’t go as expected, and the seller may end up with a huge penalty that could have been avoided had the purchaser coded the 850 correctly.

These are three examples out of many that we all know are commonly encountered. Some are little more than a waste of bandwidth and storage.  Others prevent our employers or clients from receiving information critical to the business transaction.

As an EDI analyst, I have very little influence over what the Trading Partner sends me.  But if others join me, and if we get our business office customers to understand the issues and support our cause, we may be able to affect a change for the better here or there.  What can we do?  Discuss the issues with our business offices – the Sales team, Procurement, A/R and A/P.  Take ownership of the Trading Partner Agreement process.

In today’s competitive business environment, every penalty we avoid, every customer we serve better, every dollar of profit we preserve is a win.

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Tags: EDI, EDI Consultant, EDI document, supply chain

The Back to School Supply Chain

Posted by Shandra Locken on Fri, Sep 01, 2017 @ 08:30 AM

7957359556_ddae862b53_z.jpgPhoto appears courtesy of Lyn Lomasi.  Ever wonder how all those school supplies make it into the extremely crowded "back to school" area of Walmart?  The process involves a tightly connected network of buyers, suppliers, EDI providers, teachers and 29 million households.  The "back to school" supply chain probably starts sometime in the spring, when buyers all over the US predict what will be most in demand for the coming school year.  Will the pre-sharpened Ticonderoga pencils be available or not?  Will pencil top erasers be on the supply lists?  And will there be enough glue sticks for the two dozen each parent will be required to buy?  As I walked around Walmart this year, frantically looking for everything on my twins' supply lists, it occurred to me none of these people have any idea what led up to this chaos.

In the spring, buyers start looking at previous years' sales on school supplies.  Although many of these supplies are always carried in the stores, the levels needed for the "back to school" season will need to be drastically increased.  This is largely how they decide on quantities.  So if a store last year sold 5,000 cases of sharpened Ticonderoga pencils but only 1,000 unsharpened ones, maybe those quantities need to be adjusted to account for the difference and this year's order quantities will reflect that.  There's also the matter of locale.  In some regions, parents are NOT purchasing their children's school supplies.  In states with higher state income tax like California, parents rely on the schools to supply students with pencils and glue sticks, and those schools are likely buying those supplies via an online web portal, which is another blog topic.  Although those parents are still shopping for folders and back packs - it does not resemble Christmas Eve at noon like your average Arizona Staples in August.

Once those buyers are ready to place their orders, they notify their suppliers of their vendor expectations and that usually involves Electronic Data Interchange (EDI).  Unless the supplier is a huge company like Elmer's Glue, who probably has been EDI capable for 20 years, the supplier will need to implement an EDI solution in order to accept EDI 850s (POs) and send back EDI 810s (invoices).  The small company who makes plastic pencil cases and lands a deal with Target will likely need to research and choose an EDI provider.  Once the EDI relationship with Target is established, they will need to get through testing in time to ship those POs by the deadline.  Then the supplier hopes that my children will want those cases (along with thousands of others) and they will get repeat orders.

Once the shelves are stocked, parents are logging into the district website to download the supply lists that were requested by the teachers.  My list his year called for headphones, two boxes of 24 count crayons, erasers, a red spiral notebook, washable markers, 2-pocket folders and the list goes on.  Considering I spent close to $100 for both of my children, this is big business.  According to the National Retail Federation, 2017 back to school spending will reach $83.6 billion.  It is the second busiest shopping season of the year and encompasses more than just pencils.  Also on my supply lists were antibacterial wipes, Ziploc bags, hand sanitizer and Kleenex.  The stores' merchandising departments have figured this out because ALL of these items were available in the "back to school" area of the store.  Many parents are also purchasing higher dollar items like school uniforms, laptops and other gadgets.

One segment of this industry that is steadily growing in popularity is the category of prepackaged kits that are available from online retailers like www.edukitinc.com.  Edukit works in cooperation with schools to assemble boxes of supplies each grade level has requested, including specific brands as well as quantities and offers these boxes for one price, delivered directly to the school.  The limitation is your school must participate in the program and as of this writing, my school did not.  According to Deloitte, parents will spend on average 40% more on these pre-assembled boxes, but this just goes to show that convenience offers value to busy parents, and they are willing to pony up.  Other companies that offer these kits include www.schoolkidz.com (owned by Staples) and www.schooltoolbox.com.  

As you are shopping this weekend for YOUR kids, and trying to navigate the sea of people with their lists, just imagine all that has gone into this busy shopping season, how many hours are put in by all involved from the buyer to the merchandiser, and how much money is being poured into the economy.  Not to mention how much teachers are spending out of their own paychecks to educate our children.  I guarantee that $100 will not seem so bad.

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Tags: back to school, EDI, EDI provider, supply chain, EDI solution

Aurora EDI Alliance Biography Series: GraceBlood

Posted by Shandra Locken on Wed, Mar 29, 2017 @ 02:25 PM

forBlog.jpgLast but certainly not least in our Biography Series is GraceBlood LLC, which is composed of the dynamic team of AMY Grace and Karen Blood.  Busy ladies they are, but we were finally able to get their story.  AMY (yes, it’s capitalized because it’s her initials) Grace and Karen Blood started working together in 1997 and created GraceBlood LLC in 2003. Coming from different professional backgrounds, they merged their skills and experiences to form a company focused specifically on integrated EDI and B2B managed services.

AMY was an English major who got involved, via IBM, with computer programming after college. With an interest in medicine, she worked for many years in Baltimore for the University of Maryland Department of Epidemiology doing database development and statistical analysis in clinical trial research. Her group served as the coordinating center for multiple long-term drug trials, many funded by NIH (National Institutes of Health), in areas including cardiology, diabetes, retinopathy, Raynaud’s, and more. They designed data collection forms, collected patient data from multiple clinical centers and analyzed it for eventual publication in professional journals. She took a hiatus for five years when her children were born but returned to the same career path for the next twenty years.

Karen, an inveterate serial entrepreneur, started her first business in 1979 while studying Computer Science at the University of Maryland. Specializing in microcomputer systems for small business, by the late 1980s the company was focused on software solutions for distributors and manufacturers. It was the 1990s when her customers began to experience increasing demand for EDI trading. Filling that demand, the company developed an expertise that led to it becoming the preferred provider for all things EDI for one of the nation’s leading distribution software developers. The practice grew, and Karen recruited AMY to join the company.

AMY was flattered, somewhat ready for a career change, but freely admitted that she knew nothing about the supply chain let alone Electronic Data Interchange. Like so many of us, her first question was, “What is EDI?”  Our most popular blog is about that very question.

The learning curve was steep but the incentive to succeed was strong because the built-in customer base was ready. Together, AMY and Karen developed a strong consulting practice focused on delivering integrated EDI dovetailing with their customers’ ERP systems.

Soon Karen started another company, New Blood Inc., providing web services to help wholesalers cope with the Internet. A few years later Karen had an opportunity to sell the first company, and as she did so, she kept the EDI consulting practice and rolled it over with AMY to create GraceBlood LLC. Purely focused on B2B, GraceBlood delivers services and systems for the supply chain to trade business documents electronically. She later sold NewBlood to focus exclusively on building GraceBlood.

The vision of GraceBlood has remained the same while the company has grown greatly: to allow clients to strategically embrace B2B and to enthusiastically say “Yes!” when presented with new challenges in their trading partner relationships. The company’s motto is “We speak EDI so you don’t have to.”

Headquartered in Delaware, the company’s supply-chain tested, home-based associates work from Texas, Virginia, Illinois and Maryland. Karen’s brother, Brian, an experienced IT industry veteran, has recently joined the company as a partner and handles day to day operations while Karen focuses on new business development. Hundreds of thousands of transactions for B2B trading are handled by GraceBlood Managed Services in the cloud with servers located on both coasts, while clients are based all over North America.

In their personal lives, AMY and Karen are close with their extended family. AMY’s adult children (son a Director at PayPal and daughter a judge) have provided the couple with four grandchildren, three are now teenagers. Karen’s siblings have spawned eleven nieces and nephews ranging in age from 10 to 30 and one great nephew (another on the way.)

They have many interests and hobbies especially adventure travel; last year they went on a National Geographic trip to Antarctica (see pic above), a dive trip to Cuba, and a driving tour of Iceland. Karen is a nationally ranked Scrabble player and enjoys scuba diving, fly fishing, women’s basketball, and all outdoor activities. AMY is a reader, a gardener, a film reviewer, a political/community activist and dabbles in memoir writing.

Celebrating thirty years together, they are looking forward to thirty more years of collaboration and adventure.  

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Tags: cloud, data integration, e-commerce, EDI Consultant, EDI provider, supply chain

Electronic Trading Profiles for Fun and Profit

Posted by Shandra Locken on Mon, Feb 27, 2017 @ 07:26 PM

4427310974_05b9faae8a_m.jpgPhoto appears courtesy of Opensource.com. This blog was written by Karen Blood of GraceBlood LLC out of Baltimore, a member of the Aurora EDI Alliance.  You have a website, perhaps a line card, business cards, other collateral for your business, yes? And you have or soon will have the capability to exchange business documents with customers, suppliers or other trading partners via EDI or other ways that significantly reduce the time spent by your most valuable asset, your people, as they handle daily business transactions. This new capability also improves accuracy, decreases cycle times and improves relationships with those same trading partners. You may have made a significant investment in dollars and experience to get to this point. You may have had to do it at the behest of a single significant trading partner. Well, that was the hard part and now you have an important new tool! One of the easiest ways to increase your return on that investment and increase your business’s profit is to add more trading partners or business documents.

That means it’s time to prepare your Electronic Trading Profiles.  What’s that you ask?  Well, we’ve talked a lot about documentation in our blogs and this is one more piece to add to your library.  What we like to do is prepare a one-page document for each client that identifies the contacts, the documents capable of being traded and the communication possibilities to do so. We recommend it be used by anyone at the company who is responsible for cultivating business relationships, including the company president, operations managers, buyers, business development reps, and customer service. It should be trotted out and shared with your company’s identified prospects for electronic trading amongst existing and potential customers or suppliers. It can even serve as a reminder and update of your capabilities to existing trading partners. It’s not necessary for your internal associate or the rep from your potential new trading partner to understand the details of the Profile, only that it means your company can help both parties realize more PROFIT. Typically, the Profile is passed along to the technical folks for comment and concurrence before an agreement to proceed is reached.

Here’s how to get started:

Consider your unconnected trading partners first as they are the easiest with your familiarity and historical data to analyze and rank for suitability also considering projected activity. Remember, it’s not usually high dollar value of the activity with that partner, as much as it is number of transactions that should drive your suitability ranking. This is a function of the much lower processing cost per transaction of electronic vs manual handling This is a tried and true tactic, and we see it in use every day by major retailers from AutoZone to Walmart. Other business factors may also refine the recruiting pool, including potential for increasing volume, risk of loss, appreciation for your leadership in such matters, and lots of routine transactions.

Expanding into additional markets with new partners might now be easier. Your electronic trading capability can be mentioned on your website and become part of your marketing resume. It makes you easier with whom to do business, and positions you as forward-thinking and efficient. Revisit old customer prospects for those that did not engage because of your lack of electronic trading capability. Consider adding new product lines from suppliers who previously shut you out because you weren’t EDI capable.

You can now model ‘Big Dog’ behavior. You may have suppliers who are not now EDI or otherwise capable nor likely to become so but who value your business. Perhaps a group of them would be willing to work with you via a web portal especially if there’s the possibility of an increase in your annual spend with them or an improvement in terms. From your supplier’s perspective, all activity would take place on the portal and be driven by your e-mailed notice of an order. Internally, with ERP integration, all activity would use your existing electronic capability, i.e. the portal is loaded with purchase orders generated by your own ERP. Then your supplier’s acknowledgement, shipment and invoice flow from their use of the portal right back into your ERP. 

These Electronic Trading Profiles are the key to all this fun and PROFIT!  Once launched, this very same Profile is a terrific jump start for the new Trading relationship to be well on the way to generating more Profit.  And speaking of jump starts, please fill out the form below to download a sample Electronic Trading Profile you may find helpful.

Here are examples for some of the fields:

Current Messages Supported:  X12 850 PO inbound 4010; EDIFACT ORDERS inbound D12A; XML PO inbound; X12 850 PO outbound all versions; electronic-generated PDF PO inbound; etc

Third Party Network: Liaison Exchange Network; Kleinschmidt; etc

Interchange Qualifier & ID:  12/1234567890T for Test; 12/1234567890 for Production

Group ID:  1234567890 for Test and Production

AS2 section:  See your 3rd party coordinator on these details if it is a trading option

Additional Capabilities:  FTP; sFTP; Hosted Web Portal

Click below for a sample Electronic Tradiing Profile template:

Electronic Trading Profile Template

Tags: EDI ROI, e-commerce, technology, supplier enablement, supply chain, EDI onboarding, automation

How EDI Helped Santa Deliver Presents This Christmas

Posted by Faith Lamprey on Fri, Feb 03, 2017 @ 01:05 PM

AAEAAQAAAAAAAAGdAAAAJGI0YTliMDg1LTg5NzMtNDA4MC04ZGVmLTdmNTA0YmVlYTcyMA.pngThis blog was written by Faith Lamprey, Aurora's President, and is reposted with permission from Providence College School of Business.  This past year, for the first time ever, online sales in the U.S. surpassed in store purchases. An annual survey byanalytics firm comScore and UPS found that U.S.consumers are buying more things online than instores.The survey, now in its fifth year, polled more than 5,000consumers who made at least two online purchases in a three-month period.

According to its results, shoppers now make 51% of their purchases online, compared to 48% in 2015 and 47% in 2014. Cyber Monday achieved a new record with $3.45 billion spent online, a 12.1 percent increase over 2015. This was the largest online sales day ever in the United States.

Most people have become very comfortable with, and even reliant on, buying products online. For many of us, it is now our preferred method of purchasing goods.

Are you aware of what is working 24/7 “behind the scenes” to streamline and automate the entire process? No, it is not Santa’s Workshop of Elves! It is a technology called Electronic Data Interchange (EDI) that has been deployed by companies for decades, long before the Internet became a household word.

In fact, EDI helps most people without any one even knowing it! Each time you visit a doctor, when she files a claim with your insurance company for payment, the request is transmitted electronically using EDI. When you use Tax Software to prepare your tax return and hit the Send key to transmit it to the IRS, the software converts your data into an EDI format and delivers it electronically in seconds.

EDI is used to communicate business transactions via documents in standard electronic formats with your Trading Partners. The data generated from each transaction is “mapped” to EDI data segments and then transmitted to the Trading Partner. When it is received by the Trading Partner, the EDI data segments are “mapped” to their application files and the data is processed accordingly. If set up properly, this can all be accomplished without any human intervention.

So how does EDI help with online ordering? Online Retailers rely on numerous suppliers to stock adequate inventories of the items they sell to you, the end consumer. They require their suppliers to ship the items directly to you. Even mighty Amazon does not stock all of their items for sale in their own warehouses.

Suppliers use electronic catalogs (in EDI we call them 832 Catalogs) to post their items online with product descriptions, pictures, and pricing information. This information can be used to populate the item information on web sites. The suppliers send their available inventories (via 846 Inventory Inquiries / Advices) to the online retailers so they can communicate, on their web sites, how many of each remains for sale.

When you place an order, the web site sends it to the supplier via an 850 Purchase Order with codes to indicate that the order should be drop-shipped directly to you. The supplier acknowledges to the retail web site system via an 855 Purchase Order Acknowledgement that the order was received, and that it can ship the item.

When your order is ready to ship, the supplier sends all the shipping information via an 856 Advanced Shipping Notice to the online retailer. It then sends you a “Your Order Has Shipped” e-mail message. The supplier also sends the online retailer a bill for the item shipped via an 810 Invoice.

There is even an EDI document, called an 820 Remittance Advice, that informs the supplier that payment has been made. It can also instruct the retailer’s bank to initiate a funds transfer to the supplier.

Faster than Santa can lay his finger aside of his nose, give a nod, and rise up the chimney, EDI can help to make sure that your orders are processed and delivered in time to place under the tree for Christmas morning.

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Tags: EDI basics, supply chain, automation, JD Edwards, electronic data interchange

Purchase Order Confirmation Rates: Navigating Amazon’s New Chargebacks

Posted by Shandra Locken on Fri, Oct 07, 2016 @ 05:03 PM

3269874340_cdd9244475_z.jpgPhoto appears courtesy of Wendy.  This week's blog was written by Karen Blood from Aurora EDI Alliance partner, GraceBlood LLC out of Baltimore, MD.  Amazon recently announced a new type of chargeback that will initially impact Hardlines’ Vendor Central suppliers. While this might not seem to apply to you or your other trading relationships today, Amazon more and more (like Walmart in the past) is a bellwether when it comes to making demands on suppliers. The never ceasing effort to bring customers robust selection at competitive prices in a hurry puts the responsibility squarely on distributors and manufacturers to fill orders and maintain proper levels of inventory to support demand.

Your purchase order confirmation rate is the rate at which you accept or backorder the units ordered. Amazon is looking for your PO Acknowledgement (POA or EDI 855) to accept or backorder at least 80% of the quantity for each item they order. Failure to do so will result in a chargeback of 3% of the cost of goods sold for each item you are not either accepting or backordering.

You can reject fulfilling any item but the type of POA rejection code you use will either result in a chargeback (“soft” rejects) or may adversely impact Amazon’s ability to order the item in the future (“hard” rejects.) 

Here’s the list:

EDI POA Codes

 

Vendor Central Acknowledgment Codes

Hard/Soft Reject

AC

 

Accepted: In Stock

N/A

IB

 

Backordered

N/A

BA

 

Backordered: Not yet available

N/A

BX

 

Backordered: Not yet published

N/A

BR

 

Backordered: To be printed

N/A

IR

 

Cancelled: Temporarily out of stock

Soft reject

CA

 

Cancelled: Not yet available

Soft reject

CQ

 

Cancelled: Does not meet minimum

Soft reject

OS

 

Cancelled: Out of stock

Soft reject

IR

 

Cancelled: Temporarily out of stock

Soft reject

CK

 

Cancelled: Permanently out of stock

Hard reject

CX

 

Cancelled: Never published

Hard reject

CG

 

Cancelled: No geographic rights

Hard reject

CB

 

Cancelled: Not our publication

Hard reject

OP

 

Cancelled: Out of print

Hard reject

CP

 

Discontinued: Obsolete

Hard reject

KC

 

Cancelled: Considering reprint

Hard reject

R2

 

Cancelled: Invalid product information

Soft reject (but no chargeback)

R3

 

Cancelled: Temporarily suspend orders

Hard reject

Remember, an Excessive Backorder chargeback occurs if you POA backorder more than 10% of the units on Amazon POs in any given week. They will also assess the volume of products placed on backorder if you regularly enter a backorder code instead of fulfilling a purchase order. Skipping or issuing late POAs is not an option either due to other chargebacks like Unconfirmed PO Units and Late PO Acknowledgements. Fortunately, while Amazon is not famous for suppliers being able to discuss matters with actual Amazon personnel, with Vendor Central they do now have a much stronger platform in place for testing and self-monitoring, as well as many experienced and capable implementation partners like us.

To learn more about this new Amazon chargeback, sign in to Vendor Central and click Help. Then navigate to Vendor Operational Performance (Chargebacks) > Chargeback - problem with PO > About Purchase Order Confirmation Rate. Non-compliance notifications start this week with the new chargebacks scheduled for January 30, 2017.

MOST IMPORTANTLY, for doing business with Amazon or any truly customer-centric trading partner, continue to prepare your business for real-time, lights out trading, specifically:

  • Integrate EDI or other B2B transactions directly with your systems for Order Entry / Inventory / Fulfillment
  • Adhere to DWIAD “A Day’s Work In A Day” for realizing all other aspects of transactional activity in your systems
  • Implement daily, accurate Inventory Advice Feeds like EDI 846s while incorporating reasonable calculations for safety stock
  • Involve operations and sales to relentlessly incorporate processes and policies that support eliminating Chargebacks
  • Leverage your hard-won learnings and hard-spent initial investments across the organization with as many partners as possible

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Tags: EDI ROI, chargebacks, EDI integration, amazon, electronic data interchange, EDI document, supply chain

McAna EDI Welcomes Michael Barnhouse

Posted by Shandra Locken on Fri, Sep 09, 2016 @ 06:11 PM

4344878104_e537b0248b_z.jpgPhoto appears courtesy of Nathan.  The newest superstar to join the Aurora EDI Alliance team (via McAna EDI) is Michael Barnhouse! We had the opportunity to learn more about him recently and here is what we found.  After a 15-year career as CFO in international construction, Michael Barnhouse was approached by a Chicago based consultancy to lead a new practice area focused around Business Process Management.  As this was 1996, working with organizations in all areas of Supply Chain Management quickly became the primary focus for the better part of the next 15 years.  During this period Michael helped both public and private clients in the areas of Banking, Governmental, Insurance, Medical, Logistics, Manufacturing and Retail achieve demonstrable ROI from improvements to their respective operations and delivery channels. EDI and business process automation were a key focus for the majority of the many engagements.  Michael quickly earned the confidence of his clients and established a niche for providing a proven big picture perspective that helped him lead his clients in developing the Strategic and Tactical plans necessary to achieve their goals. 

Michael also enjoyed engaging in the technical aspects of the projects.  With no formal IT education, Michael learned the tools and technologies that his clients would and did deploy, becoming a highly respected domain expert with software vendors like IBM, Microsoft, Mercator and others.  He has always believed that you cannot ensure success on any project if you do not know what or whom you are working with intimately. 

In 2010 Michael left consulting to take on a new challenge as COO for a late stage start-up.  Over the next 4 years the goals for growth and probability were achieved resulting in the sale of the organization to a larger industry player.  Michael is excited to return to consulting and has joined David McAlister at McAna EDI, focused again toward assisting organizations in achieving measurable ROI within their EDI and business process automation channels.  While Michael is new to Delta/ECS technologies, he has quickly come up to speed and likes the mapping language, the business process flow control, the flexibility, and the bundling of virtually everything you need in one package.  We couldn't agree more!  We want to give Michael a very warm welcome and are looking forward to working with him!

Click below to read a whitepaper on what getting data integration right can do for your business.

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Tags: supply chain, Liaison Delta/ECS, EDI provider