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Death, Taxes...Amazon? Using EDI to Combat Today's New Retail Reality

by Peter Edlund

Roughly a week ago, Amazon announced plans to acquire Whole Foods in a blockbuster deal worth a whopping $13.7 billion. While the deal undoubtedly excited shareholders of those companies, competing grocery chains took a hit at the stock market.

The uncertain landscape these mega-deals and mergers cause is just part of the changing world for suppliers. Retail is also struggling. The Los Angeles Times reported earlier this month that shopping malls and retailers are being dismantled by Internet businesses that can service customers quickly and efficiently with little overhead.

Slow Adoption Rates of Major Retailers

The retail industry remakes itself every few decades to adjust to new models, new channels and new shopping behavior. But retailers simply can't do business in today's complicated world like they could even five years ago. Consumers accustomed to choice, convenience and speed now rule the world.

We've sketched out a few steps you need to take to make sure you are prepared for this changing market. The businesses that don't just survive but thrive are the ones that embrace change. As you look to succeed in today's dynamic market, B2B integration represents an untapped source of competitive advantage.

B2Bi and EDI Supports Lean and Agile Business

The industry is shifting away from mass retailing to specialized and digital commerce—a sector Amazon has led since their days as an online bookseller in the late 90s.

Shopping in an Omni-channel world

 

Manufacturers who once shipped massive orders to storefronts now need to deal with individual consumers.

Preparing for this changed landscape is one of the crucial challenges for business today. There is, however, a significant upside to evolution: a leaner and more agile business.

An executive who talked to the University of Tennessee for a recent DiCentral/SAP study said they saved an average of 50 hours of labor per month after adopting B2Bi Managed Services. Among the other benefits: 30% of the study participants indicated that their organizations reallocated existing IT personnel to other projects as a result of using B2Bi Managed Services. Cost Savings were realized by B2Bi use across the board.

The end result? As executives equip and prepare their business for the changing world, they position their business partners for more success and help them create an efficient, more flexible operation.

How to Compete in Today's Evolving Marketplace

Adopting full B2B integration can be a lifeline for your business and even help partners that are slow to embrace change. Consider just one fact: Suppliers that process orders electronically were able to save almost 25 percent from previous processing costs. Here are three things to do from the get-go:

1. Move beyond traditional EDI.

Review your EDI capability and look for B2Bi features that use data more intelligently to make your business more agile including:

  • > Add network-based alerts to notify your team of order changes
  • Use cloud-based analytics to measure on-time delivery performance
  • Monitor compliance to retailer standards using customized business-rules in your B2Bi network

 

2. Prepare for ecommerce fulfillment.

Build ecommerce order management and shipping capabilities including:

  • Implement retail-time messaging to receive and process orders quickly
  • Implement EDI 855 order acknowledgement document to notify retailers of ecommerce order acceptance
  • Add customer drop-ship address to ASN processing validation

 

3. Plan for inventory to move between channels.

Combine demand planning for ecommerce, bulk and drop shipment distribution channels including:

    • Gain complete demand visibility by requesting EDI 852 sales data from both retail store POS and ecommerce sales channels
    • Include on-hand inventory in your EDI 852 document request to gain visibility into how retailers are moving inventory between channels

 

The market will continue to evolve and cope with uncertainty and proposed mega-deals like Amazon and Whole Foods, it's best to be prepared. Take the next step and give your business an overhaul. The benefits you reap will soon be realized across your entire business network.

New Supply Chain Research to Get You Started

For more information about the benefits of B2Bi and how you can prepare your organization for success in a lean and agile environment, download our latest report, Proactive Partnerships: Creating Supply Chain Value in the Digital Era.

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