In the efficient supply chain, “Perfect Orders” can perhaps be described as those which pass seamlessly from the point at which they are received, through all stages of processing, checking and verification to dispatch and finally delivery, on time and in full without error or human intervention resulting in the end customer being fully satisfied with both the products and service that they have received. This can only be achieved with accurate data that is fit for purpose across all IT systems and business applications that touch and process it.
It could be argued that every company aims to deliver the “Perfect Order”, every time and to every customer. However, the possibility of making mistakes exists at almost any point throughout the fulfilment process. Generally, errors are caused by incorrect data and/or data mismatches, where information passing through computerised systems is not synchronised and results in errors and workflow failures. This most often occurs when data is passed unchecked from machine to machine or relies on manual input and intervention.
Data accuracy is therefore crucial at every step throughout the fulfilment process. Even the smallest of errors can lead to failures, loss of control and disproportionate consequential loss for all concerned. Notwithstanding that, surprisingly not many companies we speak to have the slightest awareness of how important it is to track the reasons for such failures or the effect that can have on their average “cost per order”, that is the cost to fulfil an order from point of receipt to receiving payment.
To illustrate the point, consider the example where an order was placed by the central buying function of a large national grocery retailer for delivery to one of its small convenience stores. The order was for 26 cases of a popular breakfast cereal but due to a human wrongly transcribing the Unit of Measure (UOM) the consignment resulted in 26 pallets (a full truck load) being despatched – much to the bewilderment of the shop owner witnessing a fully ladened truck attempting to make its way down a narrow village high street to unload.
Implementing simple business logic checks to validate data within the payload of the message could have easily flagged the error by identifying an unusual quantity or triggering a finance check if the order was over an agreed credit limit. This would have alerted the person entering the order to a potential problem before the order entered the system leading to a costly failure. Instead, the supplier incurred the cost of returning the consignment to its DC – which may not always be possible with perishable or short shelf life items. As the order was invoiced on dispatch it also created work and additional costs for the finance team to raise a credit and required reassurance from the customer on the competence of the supplier.
There are numerous methods by which supply chain partners exchange transactional data. EDI, for example, has been around since the mid 1980’s. However, these are limited in the main to format translation and message routing. Admittedly, they help to remove manual transcription errors but the only way to have a fully automated system and ensure close to 100% data accuracy is with an EDI system that has embedded business logic and intelligence to validate and check every piece of data in the message before they propagate into IT systems and amplify through the fulfilment process. It is natural, therefore, that EDI needed to evolve to support businesses achieve stringent quality metrics imposed upon them by their customers and drive down the average cost per order by removing risks leading to order failure.
The technology has indeed evolved and exists through AdvanceFirst’s intelligent, managed EDI services. With some 250 man-years of practical experience and innovation in EDI, AdvanceFirst focus on developing intelligence and business logic in the EDI process for every company with whom we work. By building EDI solutions with embedded intelligence, we strive to ensure data in EDI business transactions is fit for purpose and promotes full end-to-end automation, avoids delays, risks and unnecessary costs which ultimately impact operational efficiency.
“EDI alone is simply the means to transfer electronic data in agreed formats between one party’s IT system and those of its trading partners. It does not ensure data is operationally efficient and fit for purpose in the receiver’s business processes.”
– Nick Garner, Director of Operations at AdvanceFirst Technologies.
Most quality conscious organisations should already have quality management controls and methodologies to reduce costs and operational risk. These help to actively monitor their average cost per order, meet even the strictest of SLA commitments, track past and present errors and the reasons for order failure.
Being able to deliver the “Perfect Order” is the utopia of creating a straight-through process whereby data passes automatically from one IT system to another with no manual checks or human touch points. Many companies fall short of this but combined with an intelligent, business focused, EDI solution it is possible to achieve as close to perfect as possible.
Ask yourself the question about how efficient the fulfilment process is within your own organisation? How do you monitor risks? Reduce order failures? Meet your SLA commitments? Reduce your average costs per order? Have you got the right systems and processes in place to support your business objectives? If these remain areas of concern and you feel a conversation with AdvanceFirst would benefit you then we would be delighted to talk to you without obligation to advise where Intelligent EDI can really make a difference.
For more information email firstname.lastname@example.org briefly explaining an issues you may have or call us on 01932 230024. We can then arrange a free no obligation session on TEAMS or SKYPE.