EDI – the secret to supply chain control

Tina Royall of retail systems specialist Futura argues that EDI is the next big thing for mid-tier retailers. Below, she writes exclusively for the Essential Retail Innovation Blog…

Successful retail operations depend on strong supply chain control. This is especially important for lifestyle and fashion retailers, where the agility to respond rapidly to seasonal demands and changing styles is critical. But with more channels and more products, an increasingly switched on consumer and a truly global supply base, it gets more and more complex. Manual systems simply can’t keep up which is why we believe electronic data interchange (EDI) is set to become as commonplace as email.

With effective supply chain control, you can differentiate your business, control costs and deliver what customers want. The goal is stock flowing through your business, not sitting in storage. We’re back to that fundamental retail mantra – the right product, in the right place, at the right time. That way you’ll minimise expenditure and ensure happy customers.  The problem is, supply chain has become a multitude of related tasks – all of which need to work together.

Accurate purchasing and stock control, effective range and merchandise planning, improved warehouse integration and real time end-to-end stock visibility are all important factors to get right. The missing link for a huge number of retailers in the UK however is EDI.

If you’ve heard of EDI you may have thought this was too expensive, too challenging to implement, or only relevant to the very largest retailers. But, we believe it’s the right time to think again, especially if you’re importing from abroad or want to expand.

The UK is definitely behind the curve, as if you look at the German and US markets, EDI is frequently mandatory in retailer supplier relationships and in all major fashion chains in Europe too. Indeed you may already be finding that your suppliers are demanding EDI compliance and maybe your lack of EDI is restricting your choices. Certainly as UK retail success stories look to the global market, this technology will become essential and key to creating competitive advantage.

So why is EDI so important? Replacing data entry tasks and the paper trail, normally generated by buying and logistics functions with instant electronic messaging between retail and supplier systems, is obviously faster and more accurate – it virtually eliminates errors.

EDI manages the complete information flow between retailer and supplier both up and down stream, reducing order cycle times and streamlining inventory management. It also provides complete access to a supplier’s product catalogue from within your point of sale system – a huge time saving.

EDI allows your team can be more responsive and, it reduces your stock exposure. For internet-only retailers and drop shippers, it means you no longer need to hold stock at all, just have a virtual inventory. There are further important benefits if you run a franchise model as part of your business, too.

As we believe EDI is going to be much more important to UK retailers, we’ll soon be announcing Futura’s EDI module, a pre-configured, templated solution with the EDIFACT standards to ensure compliance across Europe. Check out our blog to find out when!


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