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A supply chain is only as good as the data that drives it. In today’s marketplace, automated data flow is critical, particularly with the recent explosion of omnichannel retailing. Therefore, it is imperative to find the right platform to meet communication needs throughout the supply chain and to final customer. The ultimate goal is a seamless experience.
EDI is Mainstream
EDI is the most common electronic communication platform in use today–valued for its ability to improve efficiency and accuracy over manual processes. The transportation industry was among the first to adopt EDI, and the platform is now widely used. In fact, an eyefortransport survey of supply chain and logistics executives revealed that 85 percent of the industry is using EDI.
“It is important to look for flexibility and customization capabilities to ensure optimal speed, accuracy and visibility”
With such mainstream usage, EDI proficiency is table stakes for reputable third-party logistics companies (3PLs). At Saddle Creek, for example, we have been using EDI to support our customers for decades. To ensure a seamless experience, we customize standard protocols to accommodate customers’ unique needs, apply best practices, and stay abreast of new developments.
Over the years, EDI has evolved to meet the needs of the marketplace. The biggest change we’ve observed is in regard to timeliness. Data continues to be pushed out regularly at agreed-upon intervals, but companies are asking that those intervals become more frequent. They’ve moved away from once-a-day batch communication to more timely data interchanges in order to provide more responsive customer service.
Moving Toward Web Services
For companies seeking greater visibility and control than EDI can provide, Web services can be a viable alternative. Built on a service-oriented architecture (SOA), the platform allows users to pull data whenever they want instead of pushing it to them on a scheduled basis.
With Web services, retailers know in real time if they have product “available to promise,” so they can make commitments to their customers. It also gives end consumers the ability to track their order all the way through to delivery. Web services also supports movement toward a number of technological advances on the horizon, including the Internet of Things, 3D printing, artificial intelligence, self-driving trucks, and more.
In the eyefortransport survey mentioned earlier, 55 percent of respondents said that they are considering a Web service application program interface (API) as an alternative to EDI. Forward-thinking 3PLs are moving toward Web services as well.
Saddle Creek has invested in Web services technology and now offers a comprehensive omnichannel management system which includes order management, warehouse management, and transportation management. On the front end, our distributed order management system (DOM) can help customers identify where to fill orders from and optimize inventory to ensure cost effectiveness. We can manage order processing through to the end customer, yet allow our customer to maintain the relationship with the consumer (unlike Amazon). This allows our customers to focus on their core competency, avoid the overhead investment and build their brand.
Choosing the Right Platform
At Saddle Creek, we have the flexibility to support customers’ needs for EDI and Web services, so we can work with each company to determine which platform is the best fit for their business. We analyze their information needs and desired transaction frequency, assess their level of technological sophistication, and consider their business goals.
Eventually, we expect that all companies will aspire to move toward Web services, but often it is a matter of near-term practicality. EDI is expensive to implement, and, naturally, those who have made such a significant investment are inclined to continue using the platform. Converting older system architecture to accommodate SOA is a major investment and may not deliver the necessary ROI if they are able to meet customer requirements with EDI. However, companies such as start-ups, that do not yet have an automated data flow solution, may choose to implement their systems based on SOA.
We work with each customer in the manner that is most convenient for them. Some of our customers use both EDI and Web services. Omnichannel retailers sometimes opt for this approach, using EDI for orders from Big Box retailers and Web services for ecommerce sales.
Every company has its own unique needs when it comes to electronic communication. The key is to work with third-party partners that can accommodate these requirements today–and in the future. It is important to look for flexibility and customization capabilities to ensure optimal speed, accuracy and visibility. After all, the goal of a digital ecosystem is to make it easier to do business in the supply chain.