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Best Practices

From Shark Tank to Walmart: Tackling the Supply Chain Challenges of Getting a Product to Market

by Peter Edlund

Getting a big box retailer to sell your product can be a huge achievement. It can grow the business and put the brand on a national stage. But once the store accepts the product, the hard part isn’t over. In fact it has just begun. The organization needs to communicate with the retailer and get your products packaged correctly and delivered on time - to the store, warehouse or end consumer - to avoid costly penalties.

In order to gain success with a big box retailer partnership, here are a few of the challenges that you are likely facing.   

Tackling Complex EDI Compliance Requirements

After securing your contract, the retailer requires you to meet its electronic data interchange (EDI) compliance requirements. This computer-to-computer exchange of data is how you and the retailer will share information from purchase orders to invoices to shipping documents. But this is a whole new technology for you. Before this partnership, you may have handled all of these processes manually keeping track on a spreadsheet.

First, you will have to decide whether to handle EDI in-house or outsource it to a provider. With limited staff and resources, handling EDI in-house can be costly. It requires you to purchase all of the software needed and hire a specialist who can implement the technology. Outsourcing EDI to a provider gives you access to the software and expertise at a fraction of the cost. It also gives you support to assist in the setup and to troubleshoot any problems that might arise.

So let's say you decide to hire an EDI provider. How do you choose the right one? Wanting to expand your enterprise, you need a solution that can be scaled to fit your business and integrate it with your back-office systems. You will also want a provider that can give you global support, since supply chains are rarely local anymore. And with a constantly fluctuating marketplace, it has to be adaptable to keep up with the changes to standards, trading partners, and documents.

The Constant Concern of Chargebacks & Invoice Offsets

Next, you have to modify your supply chain to comply with the retailer’s specific business rules and avoid penalties. Incorrect labeling such as address or UPC code position require extra handling by the retailer resulting in assessment fees which the retailer turns back on you. The retailer may also implement chargebacks due to incomplete data transmissions, improperly attached hang tags, unscannable products due to cut off barcodes, and late delivery – just to name a few. These fees can be thousands of dollars of invoice offsets of already razor thin margins.

To reduce errors due to manual entry and ensure timely accurate and complete orders and shipping data, you implement a warehouse management system (WMS) and integrate it with your enterprise resource planning (ERP) platform. This enables you to synchronize automated data transmissions and streamline the handling process so you can process more orders in less time with less staff.

You can also implement a business rules management and analytics tool to monitors your EDI transactions and sends proactive alerts to help you avoid violations. 

The Finish Line – Delivering the Product to the Stores

Demands for purchase order turnaround time is quick. Often products have to be delivered in 48 hours. Handling your own packaging, distribution, and shipping is too costly and cuts into your margins. You may decide to enlist a third party logistics (3PL) provider which helps you with shipping, warehousing, and transportation. The 3PL will save you money providing adjustable warehousing space for when your inventory fluctuates and competitive pricing for transportation services.

But you can’t hire a 3PL and entrust it completely with your company’s logistics. You need the right warehouse management software solution that will give you complete visibility into the warehousing, transportation and delivery of your product, so you know at all times where it is in the shipping process.

You implement a solution, such as DiCentral’s SmartTurn solution, that gives you access to accurate, real-time inventory information, centralizes the inbound order, receipt of order, and payment processes to speed up transactions and reduce duplicate entry, and manages the flow of inventory from sales order, to packaging, to shipping, to invoice.

If called up to the pros, are you ready to handle the demands of supplying a big box retailer? in-house-versus-hosted-edi-integration