Digital supply chains: EDI as the backbone of change

Due to the impact of the pandemic and in some cases, Brexit, many companies face a supply chain squeeze characterised by rising input costs on logistics, labour, raw materials, parts and components. It’s no surprise that suppliers will demand earlier payments as their own cash flow comes under pressure from widespread delays in shipping and rising fuel prices.

This situation has led manufacturers, wholesalers and retailers to optimise their internal processes to reduce day-to-day running costs. Some go further, pivoting their whole business model to address new markets and supply chain requirements.

Given the massive hit to traditional high street retailing, models based around bricks and mortar stores have increasingly given way to ecommerce platforms. But procuring a ‘plug and play’ platform is no easy task especially if the user operates in a complex supply chain and needs the ability to scale quickly in the light of changes to the trading environment.

Businesses such as simplehuman, the award-winning designer and manufacturer of smart home products, have resolved scalability and complexity issues by using EDI, or Electronic Data Interchange, as their backbone of change.

EDI helps such businesses to connect their online trading platform with their full supply chain in an automated way, reducing costs and creating the scope to increase margins.

The supply chain behind an ecommerce business can involve a wholesale trading relationship, where the manufacturer bulk delivers to the retailer’s warehouse, or, increasingly, dropshipping, where stock is only shipped by the manufacturer once the sale has gone through.

simplehuman had initially found that its move into ecommerce (both direct-to-consumer and dropship) was making order handling a growing challenge. The need for more process improvement and scalability was becoming acute. The incumbent solution required too much staff time to start an order process and manage inbound and outbound files. It was also difficult to validate transactions in the event of queries.

Ian recommended that simplehuman explore a managed service solution – a digital trading platform incorporating EDI – to automate the order process. Given the wide range of processes and IT capabilities among the distributor network, a central question in the procurement exercise was whether or not an outsourced provider could enable simplehuman to connect to any data format using any connectivity method. The preferred partner would also have to guarantee a flexible working approach, ready access to data held in the service, and HMRC compliance for EDI invoicing. Any new infrastructure would also have to integrate with simplehuman’s existing back office systems.

The winner in the competitive procurement exercise was UK-based Transalis, whose cloud-based digital platform underpins billions of pounds’ worth of order processing by companies and organisations around the world. As soon as the contract was signed, Transalis started work on a series of integrations based on Ian’s analysis and his definitions of the interface files and mapping documents.

Within eight weeks, the biggest wholesale trading partner was on board. Once the wholesale model was shown to work, the next step was to automate the dropshipping side and make efficiencies there too. Success would help to position simplehuman as a recognised dropship vendor, or DSV, in the market.

Ten further partners – a mix of wholesale and DSV relationships – were swiftly added, extending to 52 connected accounts so far.

The new solution has fully automated a range of e-commerce data processes, both inbound and outbound. They include order acknowledgement, despatch advice, invoicing and inventory. Outbound files can be processed 24/7 any day of the year rather than just within office hours. A robust system of validation is now in place with simplehuman better able to manage partner pricing and carton quantities while avoiding any risk of order duplication.

Transalis’ eDI Connect and eDI Connect+ products are ideal for larger organisations such as simplehuman who need complete visibility across their supply chain to identify waste and create greater efficiencies. These customers will typically connect with multiple trading partners, require unlimited message creation and seek seamless integration with their existing ERP (Enterprise Resource Planning) system. They will also want their EDI solution to provide them with advanced analytics for performance management.