Achieve Operational Excellence through Your B 2 B
Achieve Operational Excellence through Your B 2 B Exchange Presented by Michael Hurley NEECOM Spring Conference – May 11 th & 12 th
My background • Nearly 20 years of technology and consulting experience • B 2 B software, enterprise IT and custom software development • Responsible for 1 EDI Source’s product development and marketing
Overview • The Promise of EDI • 5 Levels of EDI Enablement • Considerations
Best in Class Results • 50% reduction in shipment cycle time 1 • 30% fewer invoices requiring manual intervention • 27% fewer disputed invoices 2 • 20% reduction in order to cash cycle time • • • 1 “EDI: Workhorse of the Value Chain”, Supply Chain Insights, 2013 2 “The Order-to-Cash Cycle”, Aberdeen Group, 2011 3 “The Future of EDI” Forrester, 2011 3 2
Doing EDI well is NOT EASY IT Complexity • Different Standards • Standards Versions • Trading Partners Specifications • Data Mapping • Data Integration Business Complexity • Timeliness Requirements • Data Accuracy • Changing Business Requirements • Financial Implication of Non-Compliance
Neither is the Value Understood Lack of understanding of the potential business impact of EDI Perceived Impact • Low • Just a Commodity • Merely File Transfer and Communications Actual Impact • Very High • Tailored Solution • Value Added Business Process and System Every EDI error represents unnecessary cost!
Common EDI Enablement Themes • Developed an EDI Enablement framework to guide companies through their EDI journey – Supporting thousands of companies – 25 years of experiences • Representing common patterns and opportunities to impact business performance Relevant Actionable
5 Levels to Achieve Operational Excellence Level of EDI Impact Collaborate Manage Optimize Automate Operational Excellence Data Exchange Comply Operational Excellence
Questions to Consider • How are you operating in each of the different levels? • Do you support different trading partners at different levels? • Do key business stakeholders understand the impact and opportunity of EDI? • Are you experiencing the challenges that will prompt you to consider moving to the next level?
LEVEL 1: COMPLY
Value of EDI Enablement • Enables companies to serve high volume customers • Satisfies critical business requirements of new or existing customers
Requires Quick Action • Quickly become EDI capable • Only basic EDI documents • Typical Characteristics – Few trading partners – Low document volume – No ability to integrate Two Options Option 1 Customer Provided Portal Option 2 Web Based EDI Forms Solution
Only a Fraction of the Value • Benefits focus on compliance • Processes remain manual • Customer reaps most all of the benefits of full EDI enablement
Why to Consider Level 2 • Increased document volume • Overwhelmed by manual processes • Complexity of multiple customer portals • ERP investments now support integration • New trading partners increases workload Recognize the value of an integrated B 2 B exchange
LEVEL 2: AUTOMATE
The Time to Automate 100+ Number of documents exchanged per month Automation Checklist üEDI Translator üData Mapping üERP Integration 5+ Number of Trading Partners engaged in the B 2 B exchange üProcess Monitoring üBusiness Process Change
Includes EDI Process Checks • An automated B 2 B exchange should monitor for EDI process compliance – EDI standards validation – Functional Acknowledgment Reconciliation – Duplicate documents
Value of Automation Decrease Costs Enhance Customer Satisfaction Increase Speed Improve Scalability Eliminate manual data entry and costly rekeying mistakes Improve data accuracy and accurately fulfill client orders Streamline processes and create efficiencies Support higher document volumes and additional trading partners
Why to Consider Level 3 • Fail to realize process efficiencies as EDI documents continue to need manual review • Too many errors get through the process • ERP lacks checks to warn of non-compliance • Lack of predictability when onboarding new trading partners The flow of data is anything but seamless
LEVEL 3: OPTIMIZE
Illusive Benefits of Automation of documents has eliminated errors due to manual entry …but errors persist that increase costs and impact business performance and customer relationships …the solution is to leverage custom business rule alerts so you can manage by exception.
Value When EDI is Optimized Remove Customer Friction Identify exceptions before they snowball into larger problems Achieve ‘Smoother’ Interactions Transactions are fully automated without manual intervention Shorten Order to Cash Cycle Quicker order turnaround cycles by loading the right orders faster Scale Your B 2 B Exchange Manage by exception rather than reviewing each and every document
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound 2 Accurate 3 Complete 4 Timely 5 Consistent
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound Documents are internally sound and consistent within themselves 2 Accurate Example Scenarios 3 Complete • • 4 Timely • 5 Consistent ASNs line items and totals balance Invoices line items and totals balance Discounts and allowances properly calculated
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound Trading Partner data aligns with your internal data 2 Accurate Example Scenarios 3 Complete • • 4 Timely • 5 Consistent • Incorrect mapping (ship dates) Missing setup data for ship to locations or new items Pricing violations when customer price does not match internal prices Unit of measure inconsistencies
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound Documents may be missing key required information 2 Accurate Example Scenarios 3 Complete 4 Timely 5 Consistent • • Missing carrier tracking number on an outbound ASN Discount information at the header or item level Freight charges on Invoice Customer part numbers in lieu of internal numbers
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound 2 Accurate 3 Complete 4 Timely 5 Consistent Documents are timely based on your trading partner’s requirements Example Scenarios • • PO Acknowledgments Processing of PO changes ASNs are sent on time per the correct dates Invoices are sent promptly
Optimize Your B 2 B Exchange Validate that your documents are: 1 Sound 2 Accurate 3 Complete 4 Timely 5 Consistent Data is consistent between documents in a business transaction Example Scenarios • • • Item Pricing Quantity Shipped UPC or Item Numbers Invoice line item numbers Unit of Measures
Why to Consider Level 4 • Functional teams struggle having lost visibility of key business documents when the process became automated – – Limits their ability to advocate for a customer Results in continued requests to perform “EDI research” Must be trained to read EDI syntax Customer relationships suffer when information is not readily accessible Despite improvements, management remains within IT
LEVEL 4: MANAGE
Implications of Automation • Automation with business rules provides incredible business value E • But automation conceals the documents from those who need it most
To Manage Requires Visibility Right Information to the Right Person 1 Orders Change 2 View the Source Data 3 Non-Integrated Documents 4 Related Documents 5 In a Format they can Understand
The Need for Visibility Right Information to the Right Person 1 Order Changes 2 Source Data 3 Non-Integrated 4 Related Docs 5 Understand Duplicate POs • Identify when a PO is received more than once • How will you plan to handle a duplicate PO? PO Change Requests • Does your ERP support Purchase Order Change Requests (860)
The Need for Visibility Right Information to the Right Person 1 Order Changes 2 Source Data 3 Non-Integrated 4 Related Docs 5 Understand Exact Data Received • Prices provided by your customer • Shipment date expectations on the PO • Text notes in a PO • Rounding on Invoice line items and totals
The Need for Visibility Right Information to the Right Person 1 Order Changes 2 Source Data 3 Non-Integrated 4 Related Docs 5 Understand Some documents have no home in your ERP • Text Messages (864) • Application Advice (824) Who should review them • Are documents getting to the right people in your organization? • How are they being delivered? • Do they know how to read them?
The Need for Visibility Right Information to the Right Person 1 Order Changes 2 Source Data 3 Non-Integrated 4 Related Docs 5 Understand Provide all related documents together • The full picture of the business transaction • Eliminates follow up research for missing information • Identifies documents that may not be in the ERP • Empowers stakeholders with the information they need
The Need for Visibility Right Information to the Right Person 1 Order Changes 2 Source Data 3 Non-Integrated 4 Related Docs 5 Understand Display EDI data in a way that can be understood • EDI syntax was designed for computers • Your accountants are real people • Avoid needing to train business stakeholder on how to read EDI
Manage Your B 2 B Exchange ü Avoid new issues when business practices change ü Avoid errors before they happen (late or missing) ü Manage trends in operating performance ü Implement processes to improve performance
Value of Broader Engagement Visibility To measure and manage your B 2 B exchange Critical Insights Into the health of your most important business relationships Proactively Address Issues Before they snowball into more costly issues with Actionable Intelligence Improve your customers’ experience and by extension improve your brand
Why to Consider Level 5 • Even with visibility, customer issues persist • Chargebacks remain a “cost of doing business” • Difficulties persist in realizing the supply chain efficiencies through EDI automation Improve relationships through improved collaboration
LEVEL 5: COLLABORATE
Internal Collaboration Sales Fulfillment Customer Service Connect the Dots Accounting
External Collaboration Customers 3 PL Warehouse Suppliers Fulfillment Sales Customer Service Accounting Change the Conversation
Engaging our Trading Partners • Get on the same page • See the same information • Build the relationships • Improve issue resolution • Enhance the supply chain • Reduce costs and improve customer relationships
CONSIDERATIONS
Self Assessment Against the EDI Enablement Framework 1 Comply 2 Automate • Are there customers or suppliers you are still managing over email or fax? Do you have opportunities to digitize these exchanges? • • Do you have opportunities to automate more trading partners? Customers, suppliers, import orders or even 3 PL/warehouses? • Are you incorporating business rules in your automated data integration? Do you experience the issues with bad data in and out of your B 2 B exchange? • 3 Optimize • 4 Manage • • What kind of visibility do your business teams have of their EDI data? Do you understand the trends in your B 2 B exchange? • How are you empowering your business stakeholders to collaborate with your customers? How do your business stakeholders share information with your customers? 5 Collaborate •
Thank You Michael Hurley Director of Product Management 1. 877. 334. 1334 mhurley@1 edisource. com
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