Using EDI with your transportation providers or 3PL's is an element of business that is often overlooked, although it shouldn't be. Even business owners who are already utilizing EDI for other aspects of their business, might not be using it with their transportation providers. There are many benefits of using EDI with your 3PL's, and today we are going to focus on a few of those.
With the maturity and prevalence of technology in the market today, the benefits of migrating from a paper based system to communicating business documents via some electronic platform are well documented. Gains in the order to cash cycle, keying accuracy, as well as the ability to seamlessly communicate with your supplier/customer communities are just some of the points regularly mentioned when asked about the benefits of EDI.
My first horror story is about a company much like any other. A mid sized supplier; not at all out of the ordinary. The company had (or at least THOUGHT they had) a great EDI program that they had implemented, and things were going well. They were ahead of the game, using EDI when many other companies hadn't yet taken the leap. At first glance, things seemed to be going well. Customer demand was high, orders were coming in left and right, and shipments were up from the previous year. It was a time of great celebration, especially in such a rough economy. Things were looking good for these folks.
Last year we talked about how a Fourth-party logistics provider (abbreviated 4PL) PLUS a Third-party logistics provider (3PL) might be regarded as a Seventh-Party logistics provider. But what is a LEAD LOGISTICS PROVIDER? Do we have too many layers, or does each add value? Is anybody, other than supply chain theory people embracing the 7PL concept?
If you're reading this you already know that EDI is no longer an option, it is an integral part of doing business with your trading partners. Besides that, if it weren't practically required, I would have been out of work a long time ago. Even so, not every participant in the supply chain believes that the days of paper invoices, phone orders, and human interaction to complete daily tasks has been relegated to the 8-track tape days. In the best environments, everything is automated, and computer to computer transmission of information is commonplace.
Please hold for a scene from the movie The Office “What would you say ya do here?” Tom: “Well look, I already told you! I deal with the goddamn customers so the engineers don't have to! I have people skills! I am good at dealing with people! Can't you understand that? What the hell is wrong with you people?”
Those of you in the EDI (or Data Transformation, Partner Integration, or whatever you want to call it) arena know what I mean when I say you’re in the middle of things. You have ‘customers’ both upstream and downstream, and those people are very demanding. When something goes wrong, you hear about it. Nothing good can result from that, right? Wrong!
Business owners have been using analytics to analyze their business data for many years. The real question is, what do we do with that data? Up until recently, there really hasn't been much guidance when it comes to interpreting and utilizing that data to meet your business needs. However, in today's highly competitive supply chain it is more important than ever to know how to utilize those analytics to solve problems in your supply chain. Think about it: If you can't use that analytical data to solve real world problems for your business, what is the point of the analytics in the first place?
Your first thought might be: “I know already or I wouldn't be reading this publication”. Yes, we will give you the “schoolbook” definition. We will even tell you a brief history of EDI (Electronic Data Interchange), but our real purpose is to give you the Year 2013 definition of EDI; and back it up with an expert opinion.Developed in the United States in the mid-1960s, the idea of what became known as EDI today originated with a group of railroad companies.
A new term is appearing in the supply chain arena: "Supply Chain Control Tower". Just as an airport control tower coordinates airplanes landing and taking off, a Supply Chain Control Tower coordinates inbound and outbound distribution flows. Sure sounds more professional than a "dashboard".