Recently, we described how distribution companies can streamline operations and improve customer satisfaction by integrating their ERP and eCommerce systems. We also discussed how EDI dramatically improves the accuracy of information exchanges between trading partners, particularly between distributors and 3PL providers.
In this post, we explain how orchestrating information exchanges via integrated ERP, eCommerce, EDI, and warehousing eliminates errors and makes your end-to-end operations work in unison.
When a distribution company integrates these systems and functions, it prevents errors that slow operations, add costs and penalties, and hurt the company with lost revenue, profitability, and brand image.
When bringing them all together, distributors realize three significant benefits:
eCommerce orders can appear as sales orders without anyone manually entering the data. Because the ERP system connects to warehouse data, ERP-to-eCommerce workflows can allow/disallow a sales order, revise its delivery time, and kick off a new material purchasing workflow if the order causes inventory to reach a reorder threshold.
Having EDI flows from the upstream suppliers to the distributor’s ERP system means the distributor gains knowledge of interruptions earlier in the supply chain. From there, it’s easy for the distributor to use automated workflows that notify the eCommerce site about anticipated levels of product availability, and rules in the eCommerce system can prevent the displaying of unavailable products under ERP notification statuses. This makes stockouts rare.
Having automated data exchanges with one’s warehouse is simple and should occur almost entirely within the distributor’s ERP system. However, many distributors leverage third-party logistics (3PL) providers, many of which perform more than mere drop shipping (e.g., warehousing, kitting, packaging, etc.). When a distributor uses the right workflows, eCommerce orders can flow into ERP (as described above), then continue to a 3PL provider via EDI.
With this process flow, the distributor gains both speed and control – speed because they never have to enter data manually, whether it comes from the eCommerce system or goes to the 3PL provider or warehouse, and control because the ERP system receives data along the way from both the front and back ends. As a result, the distributor maintains complete visibility across sales, finance, purchasing, procurement, and production.
In terms of fulfillment, EDI between the distributor and warehousing/3PL partners improves shipping performance. First, all data is captured electronically, making it far more accurate and traceable. Secondly, with established norms around communicating ship dates, due dates, expedite rules, and qualitative data, there are fewer miscommunications, preventing incorrect shipments.
Many small and midsized distribution companies recognize the need to use EDI more often, and many are being pushed to do so by B2B customers. Optimizing your use of EDI can only happen if you view it in the context of unifying your ERP, eCommerce, and warehousing operations. At Sapphire, we’ve helped many distribution companies modernize and integrate their systems to streamline operations and increase accuracy across the demand and supply chain.
Contact us today – we’re happy to help you prepare to modernize your distribution business.
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