How does EDI work for retailers?
Electronic Data Interchange (EDI) is a crucial component in the retail industry. EDI provides a standard format for electronic communication between trading partners. Retailers and their trading partners use EDI to exchange business documents, such as purchase orders, invoices, and shipping notices, in a standardised structure.
Taking EDI one step further, retailers can opt for an integrated approach, allowing for the automation of many business processes, reducing the need for manual data entry and improving efficiency and accuracy. EDI technology has revolutionised the way retailers conduct their businesses.
What is a trading partner in retail?
In retail, a trading partner refers to any party with whom a retailer conducts business, such as suppliers, distributors, manufacturers, or logistics providers. EDI helps retailers to
communicate and exchange business documents with their trading partners seamlessly.
Here are some reasons why EDI matters in retailers:
1. Efficiency: EDI automates the exchange of business documents, eliminating the need for manual entry of data. This results in faster processing times and fewer errors. Retailers can quickly process orders, invoices, and other documents, improving their operational efficiency.
2. Cost savings: Implementing EDI can help retailers save money by reducing paper-based processes, such as printing, mailing, and storage of documents. This reduction in manual administration in tasks like data entry, sorting and filing will enable faster processing times which will help save businesses time and money.
3. Accuracy: EDI eliminates the need for manual data entry, which reduces the possibility of errors. Retailers can be confident that their data is accurate with no discrepancies across all documents within an order process, reducing the risk of costly mistakes, such as incorrect orders or payments.
4. Improved relationships with trading partners: EDI helps retailers to communicate seamlessly with their trading partners. By trading electronically, there is no need for paper-based management, reducing the risk of errors within documents such as invoices and purchase orders. This results in improved relationships, as it fosters transparency and trust between partners.
5. Competitive advantage: Retailers implementing EDI can gain a competitive advantage by improving operational efficiency, reducing costs, and improving customer satisfaction.
What changes are retailers making to their EDI messages?
Retailers are placing precedence on digital transformation to optimise trading partner relationships. In this year alone, we’ve seen retailers like Asda, Aldi, House of Fraser, M&S, John Lewis, Sports Direct, Robert Dyas and Ryman make changes to their EDI messaging. All retailers make changes that are suitable to their eco-system to optimise their business’s processes. However, a common trend we have observed within the retail industry is the adoption of Advanced Shipping Notices (ASNs).
How do retailers use ASNs?
Retailers use Advance Shipping Notices (ASNs) as a way to communicate important information about incoming shipments of products from their suppliers. Here are just some of the ways in which retailers typically use ASNs:
Inventory Management: ASNs provide retailers with important information about what products are being shipped, how many of each product is in the shipment, and when the shipment is expected to arrive. This information is crucial for retailers to manage their inventory levels and ensure that they have enough stock on hand to meet customer demand. The use of SSCC barcodes (generated from ASNs) help control inventory level in warehouses as it allows retailers to allocate appropriate space.
Quality control: ASNs can include information about the condition of the products being shipped, such as whether there are any defects or damages. This information can help retailers quickly identify any potential quality issues and take appropriate action to address them.
Receiving and processing: ASNs allow retailers to prepare for incoming shipments by ensuring that they have the necessary resources in place to process the shipment quickly and efficiently. This can help to reduce the amount of time it takes to get products onto store shelves or into the hands of customers who order online.
Transportation planning: ASNs may include information about the mode of transportation being used, the expected delivery date and time, and the carrier responsible for delivering the shipment. This information can help retailers to plan their transportation routes and schedules more effectively, which can result in cost savings and improved efficiency.
What changes are M&S making to their EDI?
From purchase orders to payments and everything else in between, UK giants such as Marks and Spencer are increasingly expecting their suppliers to exchange all types of business documents via EDI. This year, M&S announced they are shifting to a self-billing model – this is where M&S will generate a self-billing invoice to the supplier on the receipt of an Advanced Shipping Note (ASN) transmission. Therefore, in order for suppliers to receive payments, they must adopt an ASN module on their EDI solution.
What changes are Morrisons making to their EDI?
One of the UK’s largest retailers Morrisons has also been streamlining its operation processes. While previously trading documents in the TRADACOMS format, they now operate using the EDIFACT standard. In 2020, Morrisons extended their EDI message requirements to include the exchange of PORs (Purchase Order Response) and EPODs (Electronic Proof of Delivery). Now, they are mandating the use of Advanced Shipping Notices (ASNs), meaning businesses that supply their products to Morrisons must adopt ASNs to transact with Morrisons.
What changes are Lidl making to their EDI?
Lidl is another multinational supermarket chain that is making changes to improve efficiency and supply chain visibility. Like Morrisons, Lidl is making the use of Advance Shipping Notices mandatory, asking suppliers to create SSCC (Serial Shipping Container Codes) barcodes to apply to pallets allowing for a quicker goods-in process.
What changes are Asda making to their EDI?
After stepping away from Walmart, Asda is consolidating its EDI strategy. From establishing a new AS2 connection and changing their Global Location Numbers (GLNs), to altering their message types, removing Returned Claims and introducing Proof of Delivery. Asda has concluded that by July 2023, all testing of the changes and new implementations should be completed, supporting Asda as they reinvent the way they trade with their supply chain through EDI.
What changes are Aldi making to their EDI?
To improve supplier relationships, Aldi has implemented a new IT system landscape and updated their business processes to adjust their EDI messages, specifically orders and invoices. Additionally, by August 2023, all new suppliers trading with Aldi must implement ASNs, preferably via EDI. This continues the trend we’re seeing of companies introducing ASNs and wanting to enable faster, more efficient and accurate transactions while improving their supply chain visibility and management.
How can businesses combat all these changes?
Other EDI providers have a rigid pricing model that doesn’t allow for further growth. When a company initially approaches their EDI providers about changes like the above, this company will pay for all the upfront development costs meaning they are left with an extortionate bill. Once the development work has been carried out, other customers that ask for the same change will pay a fraction of the cost making it an unfair and unequal pricing model.
Our pricing structure is fairer, allowing us to spread any development costs across all our customers. As well as being more flexible, it enables businesses to become proactive against retailers’ changes. These alterations to combat the changes retailers make to their EDI messages are included in the price, meaning you have peace of mind, and can expect no additional monthly charges.
With Cegedim e-business UK, you’re offered a future-proof pricing model.