Running Better EDI with Ecommerce
Last week I wrote about EDI transactions falling well short of their vision of transferring “…structured data, by agreed message standards, from one computer system to another without human intervention” (sic). According to this Supply Chain Insights survey, fully two thirds of all EDI transactions sent to Suppliers have to be fixed by human beings. That, in turn, delays the fulfillment of those orders by a factor of two! Today I’d like to discuss how an SAP Integrated B2B eCommerce website can actually improve the hands-free throughput of those EDI sales order transactions, improve your order fulfillment performance and ultimately increase your customer satisfaction ratings. Let’s start off today’s blog post with a common refrain that has often prevented further discussions about our B2B portal solution in EDI (or fax) heavy organizations;
“If our customer creates an orders in their own purchasing system and then transmits that order to us via EDI (or fax or email), why would we make them come to a website to rekey that order? That doesn’t sound like good customer service to us”.
I must admit that it is difficult to argue with that logic. Especially if you define your goal as minimizing your customer’s time and effort to submit an order to you. But what if you redefined your goal to: the time and effort required to submit an accurate order? That changes everything. Let’s take a look at what the “state of the art” is with respect to producing accurate orders. Applying the taxonomy I introduced in my previous post, here is how I’ve seen various organizations deal with those 66% of EDI orders that can’t be processed as received:
- The Dictators reject the order and tell their customers to fix it and then resubmit. If customers are lucky, they are informed of the error quickly and given guidance about what to fix. More than likely, days pass before anyone finds out that the order is “stuck” and orders are fixed and resubmitted.
- The Supplicators fix the orders on behalf of their customers, no questions asked. I’ve literally heard Customer Service Representatives (CSRs) say things like;
- “we haven’t carried that part number for years. We know the product that the customer meant and we just fix the order”, (bad part numbers)
- “our salesperson must have given them a discount, I’ll just call her to verify and then I’ll adjust the order accordingly” (incorrect pricing),
- “we’ve had a backlog on the product for weeks now, we’ll never hit their Requested Delivery Date. We’ll just wait for them to call us” (lack of inventory),
- “they didn’t order enough product to fill a container, we’ll just up the quantity to make it work” (shipping rules not enforced)
- “yet another unrecognized ShipTo. I’ll update their Customer Master Record after lunch” (mismatched customer data)
- The Utopians schedule a meeting to fix the problem. Supply Chain groups aren’t as interested in individual orders as they are their quarterly progress towards “zero defect orders”. Either that or they call their Managed Service Provider, who’ve they’ve outsourced responsibility to, and beat them up :-). Who knows, maybe they’ll even suggest an update to the EDI standards.
- The Realists believe it takes two to tango. They know that errors are going to occur. Their response is to define a process, and provide the tools, where both parties can contribute to fixing and releasing those orders as quickly as possible. In addition, Realists strive for incremental improvement. They also try and prevent “this error type” from occurring again. Their attitude is summarized as “maybe you need to update your system or we need to update ours…or both. Let’s just get it done”.
Over the past several weeks we’ve been speaking with one “Realist” Manufacturer who actually has implemented an ingenious solution to the bad EDI orders challenge. Here is what they do:
- they immediately email their customers when they’ve received an ill-formed EDI order
- they post that order in their (disconnected from SAP) B2B portal for the customer to examine and fix
- their customer resubmits the updated order and repeats the process as required.
- if the customer wants to prevent similar delays in the future, they will fix the data in their own purchasing systems so that whatever error trapped in this particular EDI order won’t occur again.
Inspired by this solution, I polled some of our existing clients, and (surprise surprise) they all suffer from the same problem and love the pragmatic design of this solution. So…it’s now on our Product Roadmap! (I have no shame in stealing great ideas.) We already can manage all types of Orders and Quotes in our core system. Why not extend it to manage defective EDI orders? We can easily display a list of them, drill down to an individual one, edit the order header and line items and submit to SAP in real time. That last step will uncover whether you have a well formed order that SAP will accept or present you with an opportunity to continue to clean up all the errors and warnings until it is accepted by SAP. Brilliant. A very pragmatic and realistic solution. The 33% of EDI orders that can go through hands free, do. Business as usual. The 66% that don’t, can come to the portal to quickly get cleaned up…without retyping the order by the way. In short order, with this approach, those 33% hands free orders can easily become 66%. I hope this “Realist” Manufacturer becomes a client of ours. I know I’m going to love working with them. They went live with their existing B2B eCommerce platform in 2010. A mere four years later they are going to replace it because they’ve concluded that the cost to manage all of the data and business rules required to run their business in two places (SAP and their B2B platform) has grown prohibitive for them. Once again, not a big surprise to us. :-) Stay tuned. I know we’re going to evolve our platform to add value to EDI orders. I hope I get to do it with the company that turned on the light bulbs for me. Sam
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