Here’s the way we used to do it, we run low on stock, we fax or email an order through to a supplier, they send an invoice, and commence sending the stock, remittance advice goes, the invoice is paid and the stock is delivered, receipt of payment supplied. There’s a lot of manual data entry there and production of paperwork for just one order. Here’s how we now do it, an EDI ordering system.
What is an EDI Ordering System?
Let’s start with the system as a standalone system, so stock goes low, you send an EDI invoice to your client, their system responds sending an invoice and ordering the stock for you, your system automatically responds with payment and confirmation. That’s it on a basic level, and of course there’s some fail safes in there to ensure you’re paying the right price and that money doesn’t just leave your bank account without checks, but in general its now much more automated, very little human involvement and no actual exchange of paper. The EDI billing and EDI purchasing sides of the EDI ordering system work totally in synch and both parties are happy.
Now here’s where it gets even more exciting!
Integrating EDI Ordering Systems with ERP and eCommerce
The next step in the journey toward absolute efficiency is then to integrate your other systems into the EDI ordering system. Your customer orders a product online, and the minimum stock level is triggered, so the eCommerce system tells your ERP system to order more of that product, the ERP system double checks stock levels and outstanding orders, and then places a new order via the EDI ordering system. Stock is delivered, paperwork and payments carried out, ERP supply chain management system updates the inventory log, and then new stock level number is updated on the eCommerce website. That’s just one exciting way that integration of your core systems helps your business to run itself.
Add in drop ship vendors who stock and fulfill orders for you, multiple eCommerce platforms, and tracking systems to allow customers to track the progress of their order themselves, and suddenly you have a whole automated system that doesn’t require much control by you except to agree on stock levels and order thresholds based on the sales data your dashboard is informing you about.
The Future of Core System Integration
The future of this process is a fully outsourced supply chain where an eCommerce business carries no stock, it is all drop shipped by their supplier, or even the original manufacturer. AI deals with customer enquiries and decision making with regarding to sales projections. Suppliers upload their new product information onto the system and a price negotiation takes place digitally before adding the product to the inventory. Effectively the eCommerce company can sell exponential varieties and volume of products without ever handling a product. Payment is taken online through the eCommerce site and the payment is made same day to the supplier with the retailer’s margin removed. The manufacturer may not even produce the product until the order is made!