How Electronic Data Interchange (EDI), Santa's Little Secret, Gets Toys To Shelves
Oct 09, 2008 (BUSINESS WIRE) -- The magic that brings the hottest, most sought-after toys, dolls, and electronic games to store shelves come holiday time doesn't spring from Santa's sleigh; rather, EDI, or Electronic Data Interchange, ensures that stockings get stuffed in a timely manner.
"This vital business function--most frequently used for purchase orders, remittance advice, invoices, advance shipping notices, hang tags, UPC labels, and catalogue updates--is almost impossible to perform internally without enormous expenditures of money and manpower," says Thomas J. Stallings, CEO for EasyLink Services International Corporation, a leading provider of business messaging solutions and services worldwide.
How does this Santa insurance work? Let's say a major toy retailer has relationships with one thousand unique vendors. And let's say each of those vendors has one hundred unique products to sell. Were each vendor to have a separate format for its POs, acknowledgments, shipping notifications, invoices, and remittances, a paperwork nightmare would quickly ensue.
Moreover, suppliers that fail to submit automated business transactions according to retailer specifications are faced with pricey penalties known as "charge backs." For the supplier, these can result in fines in the tens or even hundreds of thousands of dollars, along with irrevocably damaged business relationships. For the consumer, this botched paperwork could mean that gaming systems go MIA and cherub-faced dolls remain in the cabbage patch this Christmas. In short, botched B2B paperwork can mean your family's holiday season gets Scrooged.
That's where EDI comes in, sleigh-bells ringing. EDI requirements prevent this paperwork nightmare by standardizing and automating vital business processes and reducing the manual labor, red tape, and cost involved in getting goods onto shelves. Retail EDI requirements, however, aren't really standard: retailers use fields in different documents in different ways. These individual templates, called "maps," are what differentiate automated business documents between retailers. Therefore, when choosing an outsourced EDI provider, small and mid-sized businesses would be wise to learn about the depth and breadth of the provider's relationships, and the number of pre-existing maps they maintain.
"During the holiday season, it is imperative that supply chain logistics are working flawlessly," says Mr. Stallings, "so at the end of the day, suppliers, vendors, and customers have a happy holiday."
For more information, visit www.easylink.com.
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