Estimated reading time: 3 minutes, 34 seconds

Is Supplier Portal really Electronic Trading

portalMore and more, I’m hearing about Retailers or other buying organizations that either have, are in the process of implementing, or are looking at investing in a supplier portal service for electronic trading. Certainly there may be some need for something like this, however I would caution those organizations to truly look at the value that you as the Retailer or Sponsor of this technology are gaining with this investment. I’ve addressed this topic a few times in the past but wanted to make sure that those companies going down this path are making an informed decision. Below are reasons for thinking about Supplier portal –

 

Retailers will create a supplier portal for Supplier usage

o   Suppliers that don’t have EDI – In the age of “Cloud Computing” its surprises me that a suppliers is even allowed to state they do not have EDI capabilities. Companies like SPS Commerce, DI Central, GXS, Sterling, and others have low cost tools to support suppliers' Electronic Trading for all or some portion of data needed to support a retailer's business requirements

o   Low volume suppliers - 100% EDI compliance – some Retailers are shooting to have all of their trading partner exchange EDI, which unfortunately is unrealistic. At some point the effort to support 100% of a trading community ends up a value of diminishing returns. It takes more to support and train than the value provided.

o   No Cost to the supplier - If you plan is to offer a “free” method for suppliers trading business transactions electronically, be aware that “free” means no upfront (hard dollar) investment on the supplier's behalf. However the resources that it takes for a supplier to manage access to you and any other customer orders through each of the various portal sites is not always without cost.

o   Need a tool to provide data feeds or system updates -

§  Inventory Availability – the 846 EDI transaction can be use for this.

§  Order Status – the 855 PO Acknowledgment or the 870 Order Status Report can be used for this.

§  Shipment Advice – the 856 Advance Ship Notice can be used for this.

§  Branded Packing Slips – With technology capabilities these days along with the fact that more and more retailers are moving to the Branded experience for the customers shipments so those suppliers not supporting this internally or through another 3rd Party provider are likely seeing their business with the customer erode.

§  Status of Suppliers Invoices in Payables – This is the 820 remittance or I’ve even seen the reverse 821 (statement) of activity used

§  Transportation pickup requests – With more and more retailers taking control of their Freight expenses, many have implemented a Transportation Management System (TMS) and with that comes the need for the suppliers to provide the information needed about the shipments. Companies like Belk, Cabela’s, JC Penney, Home Depot and Fastenal CPN – Will Call were have invested in this process Cabela’s, JC Penney, Home Depot and Fastenal are all now allowing 753/754 EDI transaction for this information

§  POS (sales or inventory on hand) – This one I see being a cost factor because of the size of files. In addition, Retailers are concerned about the suppliers ability to utilize the information. Again, there is an 852 EDI transaction for this information and there are many companies that provide Intelligence tools that can manage the information at fairly low monthly rates

Retailers will create for Internal usage

o   Management of  Exceptions

o   Order Visibility

o   Supplier performance

Similar to 3rd Party EDI providers, there are many companies that offer Business Intelligence tools that can manage this data, some as SaaS models. You may do well to consider that option

If after reviewing the information above you’re still moving forward, I’d make one request on behalf of your suppliers; do not make the portal the only means of access for suppliers trading with you. Allow them to use what they already have rather than forcing them to use your portal. And consider your cost  to build and maintain, is it worth it?

So,  Is providing a Supplier Portal really Electronic Trading?

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