The supply chain, whether driven by wholesalers or distributors, is only as efficient as the data that is shared between businesses, ranging from purchase orders to payments to parts (and inventory) availability.
Data flows thick and fast and ever more so as firms across all manner of verticals become increasingly global in scope, with data stretching across languages and currencies. The movement toward automation and away from manual data entry is a crucial one, which then leads to streamlined order management and cash flow.
In one recent announcement, ecmarket, which markets the Conexiom Sales Order and Invoice Automation platforms, said it linked up with Comparatio, which makes customized business development software, to serve the wholesale distribution and manufacturing markets, with an eye on simplifying business processes and also communications between far-flung firms. The combination of the two companies’ efforts on document exchange means that emailed and non-electronic documents (think paper faxes) are able to be fed and maintained directly by enterprise resource planning systems, with conversion to electronic documents, which the companies maintain will help shorten cash flow cycles by up to 30 percent.
In an interview with PYMNTS, Brent Halverson, CEO of ecmarket, said that, within the manufacturing and distribution verticals, “we find that there is continued emphasis on manual entry, of everything from purchase orders to invoices” — a process that has not much to recommend it in terms of efficiency, with the possibility for mistakes in data maintenance.
One antidote to that has been the emergence of Electronic Data Interchange (EDI), where business documents have been translated into data that is formatted, standardized and read across all parties in a transaction. The EDI document itself ties into strict formatting rules that allow both buyers and sellers to immediately understand what the transaction is about, from buyer and seller ID to goods bought and sold, via price and quantity. All of this is fed into order entry systems on the back end without manual input.
Investing in EDI infrastructure, said Halverson, may be such an undertaking in terms of cash, time and staffing efforts that manufacturers and wholesalers may balk at the price, which opens the door for cloud-based services, such as those offered by the newly announced partnership between Comparatio and ecmarket. Larger firms with EDI systems in place may have trouble convincing smaller players with whom they partner throughout the supply chain to adopt EDI. But through software platforms, said the executive, incoming and outgoing data is communicated with speed and accuracy across B2B transactions, as he noted that “in distribution, the cycle is critical.” Thus, the ability to standardize data reading and, for example, convert metrics that are staples in supply chain communications, such as measurements and especially quantity, feed directly into efficient supply chain management.
By way of example, the distributor or wholesale model, said Halverson, can especially benefit from EDI functionality as “it is crucial to get the right part at the right time” to customers in “just-in-time fashion.” That can benefit retailers who need wares on an almost on-demand basis as inventory may wax and wane according to consumer preferences. The growing incidence of cross-border transactions also is benefitted by EDI, as data across languages and countries can be mined to capture quantity, price and timing of deliveries, without necessarily having to know the languages used by the parties involved in the transaction. The manufacturing model, continued Halverson, may have longer lead times, but mobile functionality can help manage parts and replacements (and thus production and order fulfillment) that can help cash flow. In mobile, said Halverson, the user can enter orders into systems with files, then upload to devices and then automatically push onto workflow systems.