The whole concept of EDI (Electronic Data Interchange) emerged properly for the first time in the early 80’s and due to some very clear and sizeable benefits was very quickly adopted by retailers in the earlier days, specifically food retailers. What exactly were those benefits I hear you say? Well they are the now fully accepted benefits of exchanging business documents electronically… Just some of these are:
- Speeding the flow of order/invoice information up and down the supply chain, giving all companies who make up that supply chain faster and more accurate information on how consumer demand is changing.
- This in turn allows retailers to give suppliers more up to date information on (amongst other things) stock replenishment requirements.
- Retailers can then reduce the amount of stock and hence money invested in the supply chain by very sizeable amounts.
You may remember those days when the likes of Tesco used to make profits of around £100 million per year. Very healthy and respectable, but those profits then became billions in the space of a few years. When asked how they had managed to do this, the then head of Tesco Sir Ian MacLaurin pointed at the implementation of EDI as the major contributor to improving stock turns for their entire supply chain from 7 to 17 per year and all that money saved was delivered as profit to the bottom line. These somewhat enormous financial savings were duplicated across all retail supply chains. There are many more examples where benefits accrue. More accurate data and less rekeying of data being just two.
The wide adoption of EDI operations has no doubt delivered billions of pounds of benefits to both retailers and suppliers and in 2020 continues to do so.
For all the above reasons growth of EDI in the retail sector was rapid and decisions to invest in EDI technology were all made at Board level. At that time I was presenting to the Boards of companies at a rate of about five per week these were either to retailers or manufacturers or the first tier suppliers to both.Thirty years on and EDI along with the benefits that come with its adoption are now well accepted and these days the Board rarely get involved in how that technology is now adopted. Invariably the responsibility for operating this business critical technology has now been passed down mainly to the IT department and treated as a very important operational activity… This has inevitably slowed down the adoption of EDI as the potential benefits of expanding its use further have become less visible to people like the FD and MD.
After moving away from EDI and into eProcurement for 4 years (heading up GE’s European eProcurement team) it was surprising for me to see upon returning to EDI (to set up AdvanceFirst Technologies) that implementation across the supply chains had not at that time really gone much further than orders and invoices with first tier suppliers. Disappointingly very little effort had gone into driving the adoption of EDI to all document types, and fell well short of including all their first and second tier suppliers further up the supply chain. Thus reducing the full benefits of the adoption of EDI considerably.
As EDI has now become an operational activity, this in turn has meant that it has become very difficult to get Boards of companies to refocus on driving those benefits through to all the suppliers that make up their entire supply chains.
As the technology evolved to include more document types this has meant that some EDI departments have had to deal with an increasing complexity of document types which sometimes require complex intelligence built into them and a huge variety of communication methods to an increasing diversity of trading partners and market places.
It also required more secure systems with 24×7 backup and a larger workforce to provide the new skills required and to cover for holidays and sickness. It has always been the objective of any business to be the best supplier possible to its clients so companies must always be sure they can be as responsive as possible to what their trading partners require.
This is where the opportunity for AdvanceFirst Technologies arose. Once the technology was being run at an operational level and the complexity of EDI operations required more complex skills than the average company would have available, then that technology had become a very suitable candidate for outsourcing.
AdvanceFirst very quickly became one of the leading providers of outsourced EDI solutions. In effect we operate as the EDI department for the vast majority of our clients. They tell us who they wish to trade with and we set up the required document types and formats that enable full integration with business documents being exchanged from application to application, retailer to supplier and back again.
We would normally manage any client requirements as a project with an agreed project plan and provide a fully tested and operational solution to our clients.
AMOS (Advance Managed Outsourced Solutions) running on a secure 24×7 fully resilient platform has now become the core business of AdvanceFirst Technologies.
Please call us on 01932 230024 to arrange a conference call with me or one of our experienced consultants. We would love to discuss your EDI and supply chain requirements and present you with a project plan to deliver all the benefits to your company as soon as possible. Alternatively email us at enquiries@advancefirst.com. We would enjoy the challenge of delivering a full EDI project plan for your company during this quieter period for us all.
