EDI improves customer relationship because it speeds up processes between companies and improves the accuracy of the information they exchange. Large customers know from decades of experience with thousands of suppliers that by using EDI documents both parties save time and money.
If large customers only ordered once or twice per year from suppliers then EDI’s benefits would not be so great. But in today’s hyper-competitive environment, inventory levels must be carefully managed and that dictates frequent order cycles with each supplier.
Most large customers require EDI compliance from suppliers as a condition for doing business with them. Large customers have sophisticated systems for efficiently managing all phases of the order cycle. They like EDI because their systems for ordering, receiving, warehousing and payment can be set up to automatically interact with EDI capable suppliers.
Let’s take a look at the major phases of the order cycle from the supplier’s perspective of their relationship with their customers.
EDI purchase Orders and the associated acknowledgments let your customer know you have their order. You get the orders quickly and with precise information for exactly what your customer wants and when they want it. Misunderstanding are minimized. Getting orders sooner enables you to ship faster if your customer wants it. And it gives you more lead time to plan production, packing, and shipping.
Some large customers may want you to ship directly to end consumers. An electronic order cycle is the only way to meet the timeliness of delivery that today’s consumers demand.
Shipping and Receiving
EDI Advance Ship Notices (ASN’s) let customers know your shipment is on the way so they can plan their receiving labor and logistics. The ASN tells them how your products are packed so they can receive them quickly and accurately. Bar code labels on your shipping cartons speed up their receiving process and inventory update accuracy.
Billing and Payment
Not getting paid accurately and on time can put a strain on any relationship. EDI invoices give your customer precise information about your bills which speeds up their accounts payable process. Billing disputes and delays are minimized and you get paid faster. Lost invoices are greatly reduced because EDI acknowledgments let you know your customer has your bills.
Just Say “Yes”
Although your large customers will most likely require EDI capability of your company, you can begin building your relationship with them by telling them from the beginning “yes, we are EDI compliant and can meet your specific requirements.“ “Yes, we can receive EDI orders, send EDI ASN’s, bar code label our cartons, send you EDI invoices, and exchange any other EDI document types you require.” “Yes, we can do branded packing slips if needed.”
CovalentWorks takes care of EDI headaches for thousands of small businesses so they can say “yes” to their customers’ demanding EDI compliance requirements. Contact us anytime to find out more.How EDI Improves Customer Relationships by Steve Brewer