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SIX QUESTIONS TO ASK WHEN YOU NEED A 3PL AND SEAMLESS EDI

Warehouse

Meeting retailer EDI standards.

As your revenues grow, your retail footprint usually expands. That’s typically good news—more outlets should mean more sales. Products will be more widespread, and brand awareness increases as you reach new audiences.

Along the way, you’ll encounter some demanding retailer compliance standards. As frustrating as they can be, it’s also fair to note that retailing isn’t exactly an easy business these days. Margins are tight, affordable real estate is a challenge, consumers are fickle—it’s hard to fault stores for taking steps to ensure their supply chains are as efficient as possible. It only takes a quick scan of business news to see the demise of former juggernauts—Forever 21, Toys R Us, even CVS is closing stores next year—and realize that nothing can be taken for granted in today’s hyper-competitive retail landscape.

Of course, that’s small comfort when you’re faced with paying a chargeback because your order did not match the standards of the retailer. Or dealing with the expense of returned merchandise because of miscommunication or an administrative error. Rack up enough of these mistakes and you’ll start to wonder if the cost of doing business with some retailers is worth the effort.

Maybe you have decided chargebacks are an inevitable cost of doing business. Trust us—it doesn’t have to be that way. Here are six steps that will help you build relationships and work flows that prevent expensive mistakes.

Step #1: Start off on the right foot when you add a new retailer.

Retailers want to do business with brands they are confident will be consistent, accurate, and reliable. When you begin working with a new retailer, make every effort to ensure that your first transactions are error-free—they can set the tone for the future relationship. Many will ask you to complete EDI testing—a knowledgeable, expert EDI provider can help you navigate this phase successfully. Once you begin trading, make sure your EDI company has completed the necessary mapping for the retailer. Bottom line: you only get one chance to make a first impression. Work with someone who can help you make it a good one.

Step #2: Make sure your EDI and order management software is tailored for your company.

Man holding up a sign that says there are no rules

An off-the-rack software solution will probably fit your company about as well as a cheap polyester suit. After all, every business is different and your EDI application should reflect that.

Without the ability to customize your solution, you wind up using workarounds that increase the chance of error. Or your staff members elect to follow a process of their own creation, resulting in confusion, uneven work flow, and a lack of consistency.

When your software can be tailored for your specific needs, it is adopted easily by your organization and will function well with your trading partners. What’s more, ask about the customer support that’s behind the application. Even the most thoughtful software needs experts who can help you quickly resolve issues.

Step #3: Take the time to identify chargeback issues and tackle the EDI errors causing them.

Before you can fix a chargeback problem, you need to find out exactly what’s causing it. Chances are, if you’re dealing with issues when working with a retailer, many of them have the same root cause. Working with an expert EDI software provider should help you avoid most of them. Here are some of the most common reasons suppliers end up dealing with the sting of a chargeback:

  • You sent an incorrect or incomplete Advance Ship Notice (ASN or EDI 856). You can also face a chargeback if the ASN doesn’t arrive—but the delivery does.
  • You missed the delivery window. In this era of Just-in-Time shipping, an order that arrives too late or too early is a problem. You need to deliver within those windows, and sometimes they are tight.
  • You failed to communicate the receipt of a Purchase Order (850/875) with a Functional Acknowledgment (997). Or you missed the window for sending the 997.
  • You shipped packages without the correct inner and outer pack quantities.
  • You missed some important details. UPC codes, pedigrees, serial numbers or lot IDs were not properly traced or embedded in product labels.
  • You sent the packing slip in the wrong format. Ugh.
  • Your retailer-specific GS1 barcode label failed to provide required data.
  • The routing instructions were not followed exactly.
  • Your invoice documents (810/888) bounced back because they were incomplete or missing required information. Nothing worse than making an error on the document that gets you paid.

Step #4: Know your retail trading partners.

Make sure you have consistent communication with your trading partners. Rather than ignore a problem, tackle it head-on to find out if the issue is systemic or a one-off. Once you have established that, go forward with a plan that will prevent problems in the future. If you’re working with an expert, experienced EDI provider, they should be able to both keep you compliant and quickly address any issues.

Step #5: Always keep improving your EDI and order management.

Man doing a kicking workout

EDI compliance is an ongoing process. Improvement needs to be a part of that.

As you begin to work with new retailers, use the experience you have gained to inform your path forward. That will help you avoid issues that may have led to chargebacks in the past.

You should also be tracking your success. Is the ratio of chargebacks to transactions improving? Is there a certain retailer that is challenging for you? Are you getting repeated chargebacks for the same error? When you track it, you can fix it.

6) How do they handle EDI?

 Some 3PL providers will claim they can handle your EDI needs themselves. But few will manage it as well as an EDI specialist. Here at eZCom, we work with numerous 3PLs, often at the request of our clients. What’s important is that the 3PL can fully integrate with the EDI provider. Or, to put it another way, make sure your EDI provider can integrate with your 3PL. Our in-house integration team embarks on a Discovery phase, and builds an integration solution that helps create a seamless supply chain. After all, when you’re hiring a 3PL, you are looking to add simplicity — not complexity. If EDI becomes a challenge with your 3PL, it’s time to consider another 3PL or an EDI provider that makes the process as straightforward and automated as it should be. Here at eZCom, we are proud of our ability to provide integration solutions, and we work with some excellent 3PL providers to help our clients gain the efficiencies they want.

Build a supply chain for success.

Highway lights at night

Orders are what keeps your business going. But turning those orders into satisfied customers is how you build lasting, repeat business.

Throughout your supply chain, there are all kinds of places where the process can break down. You can prevent that from happening by choosing your providers carefully. Start with cloud-based EDI software that is backed by experts and a customer support team that can troubleshoot problems — and resolve them. Make sure that your EDI provider can work well with your 3PL provider. Demand that your 3PL not only has industry experience but the category expertise you need. Finally, make sure that both your EDI provider and your 3PL will offer ways to automate the exchange of data so errors are eliminated and time-consuming manual entry is eradicated.

Finally, take a moment to congratulate yourself. If you have built a business that demands the services of a 3PL, you’re doing things right. Toast your success for a moment — then keep pushing forward.