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Sears Holding Corporation Transformation Case Study

Posted By RCVF Admin, Saturday, August 4, 2018
Updated: Saturday, August 4, 2018

 

Sears Holding Corporation Transformation Case Study
By Peyman Zamani, Logicbroker

Challenges

Sears Holding Corporation (SHC), the parent company to Sears, Kmart and the Shop Your Way Loyalty Program, is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve their members - wherever, whenever and however they want to shop.

Over the past several years, SHC has undergone massive transformation and was looking for new ways to engage with their members and customers. Specific challenges included the high cost of doing business for drop ship vendors and themselves, the lack of integration flexibility, and the team at Sears realized they needed to look for something that was more flexible and adaptable.

During this review, Sears carefully evaluated the lengthy onboarding time their legacy provider was taking to onboard new vendors, how Sears would be measuring vendor performance management, and how to optimize the vendor base, allowing them to work with Sears in a simple manner to bring on more assortment and do a better job of offering a wider range of products to their customers.

“Utilizing Logicbroker allows us to offer our vendors a cost effective, technologically flexible approach to the drop ship business, addressing key issues for both SHC and our vendor community. Their experience in this space and dedication of the account team is allowing for a rapid migration with negligible business impact during the transition.” -Beth Ligenza, Sr. Director, Online Operations at Sears.

Results

In working together,  Logicbroker, Sears, Kmart and their vendors were able to migrate off of Sear’s legacy EDI platform and embrace new technology. Vendors enjoy the no-cost model Loicbroker offers them as well as the flexible integration options. Due to fantastic support, both from the SHC and Logicbroker teams, all vendors were quickly migrated and up and running within a few months. This efficiency was unparalleled to the legacy provider, and much less complex than SHC having to build a new solution in house. By leveraging Logicbroker’s prebuilt connections, a seemigly painful process was made much less complex and a successful EDI migration happened in a mere 60 days. 

Solution

Logicbroker is helping to guide SHC through this transition. It has been at least 15 years since the Sears team has made any changes to their drop ship business model. Logicbroker’s ability to apply learnings from other integrations provides Sears with recommendations based on the changes in industry technology that have been key in their ability to make this a simple transition.

For Sears, one of the biggest benefits from the Logicbroker partnership, and what will help drive business, is the no-cost model to their vendors. Vendors do not need to have a separate contract or pay fees directly to Logicbroker, as all transactions are done through Sears. Logicbroker facilitates the connections and provides ongoing support for vendors.

The Logicbroker team has helped existing Sears and Kmart vendors migrate off of the legacy drop ship platform and maps them to a variety of communication standards including XML, EDI, and API based connections. In addition, Logicbroker will facilitate onboarding all new vendors that elect to do business with Sears and/or Kmart.

 

About Logicbroker

Logicbroker provides EDI & drop ship technology that unites brands, retailers, and the systems they rely on. With Logicbroker, leading retailers, including Sears, Kroger, Rite Aid, Zebit, and HiTouch can harness the latest in cloud and supply chain automation technology with unrivaled speed and integration flexibility. Our proven platform eliminates the complexity of running a successful drop ship program.

Our customers enjoy a high level of supply chain data automation, including inventory, orders, acknowledgments, shipments/advanced shipment notices (ASNs) and invoices while creating stronger partnerships with suppliers by lifting rigid technology demands. Logicbroker offers a variety of options to ensure fast supplier onboarding, including EDI, XML, CSV, JSON, and the Logicbroker vendor portal. We do not charge any additional fees for AS2, SFTP, or our API communication.

For more information, visit www.logicbroker.com or call 203.929.7633

Tags:  Drop Ship  EDI  Kmart  Sears  Transformation 

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Retail Value Chain 101: 6 Questions Suppliers Must Answer When Setting Up EDI

Posted By Administration, Thursday, August 10, 2017
Updated: Tuesday, August 8, 2017


by RVCF


Much attention is given to supplier onboarding. When a retailer begins doing business with a new merchandise supplier, the retailer must have a clearly defined onboarding process and manage that process carefully. This will set the tone for a successful, profitable trading partner relationship. The same principle applies for suppliers when setting up their EDI transactions.

When a supplier begins doing business with a new retailer, the supplier must do their due diligence to ensure that all data required by both parties flows seamlessly back and forth. Unfortunately, many suppliers take a cookie cutter approach to EDI. Because they're successfully executing EDI transactions with other retailers, sometimes suppliers cut and paste EDI programming. When this happens, you increase the risk of shipping errors, delays and deductions, all of which erode the bottom line for both suppliers and retailers.

Here are six questions you must answer when setting up EDI with a new retailer:

1) What Versions of EDI Should You Employ?
Retailers use versions such as 4050, 4030 or 4010 for EDI mapping guidelines. The lower the number, the older the version. New versions provide you and your retailer trading partners more data to help ensure that orders are filled and shipped accurately. You need to make sure you're capable of trading documents in a way that meets the retailer's expectations. If the retailer uses a more recent EDI version and has high expectations, you need to determine if your organization is capable of meeting the retailer's requirements before you start filling orders.

2) What Documents Are Mandatory, Conditional and Optional?
The retailer will always indicate in their guides what types of documents fall into these categories. For example, the purchase order, invoice and ASN are typically mandatory documents, although there may be more depending on the retailer. Some documents are conditional. If you trade document A, you'll be expected to trade document B. Optional documents aren't required but can be helpful if traded.

3) Is Mapping Programmed to the Retailer's Specifications?
Every EDI document is a roadmap that defines which types of business transaction data are mandatory, optional and conditional. Each roadmap is a mapping specification that indicates what data should and should not be provided. All retailers have sets of mapping specifications for EDI documents, or transaction sets, that they require or are capable of trading.

Suppose the retailer is expecting you to send certain information with your ASN, but you haven't mapped that information. In this case, there's no way to pull that data from the system and send it to the retailer. Either the ASN will fail and not go into the system, or it will go into the system incorrectly. Hello, chargebacks.

4) What Mediums Are Allowed – and Best – for Each Document?
EDI transmissions can be sent in different ways. If you're using a VAN, you need to make sure your retailer trading partner is using the same VAN. Otherwise, you're basically sending EDI transactions to an unmanned mailbox. Many retailers and suppliers use multiple VANs, but you want to minimize the number of VANS because you have to pay for each one you use. However, a VAN isn't a requirement. If you and the retailer are both capable of using AS2, a direct connection will enable you to exchange information more efficiently.

5) What Are the Retailer's Preferences (Timing, Frequency, etc.)?
For invoices, the retailer may not want to receive them in real time. You may prefer to send invoices in one daily batch and save money by executing fewer EDI transmissions. Inventory data, on the other hand, may need to be shared in near real time, especially in drop ship situations. Suppliers must take the time to learn the retailer's preferences so they know how often to send each type of EDI transaction and what times of day and days of week to send them.

6) Have You Agreed Upon a Grace Period for Testing Your Transactions?
Even if you plan carefully when you start doing business with a new retailer, you won't know if the EDI mapping is perfect until you test it. A lot of things can go wrong. Establish a grace period with the retailer so you can make sure mapping is programmed properly, report to each other in real time, and address any issues without chargebacks before you go live.

EDI makes it possible to automatically share data in a standard, structured format. It saves time and money and reduces errors by eliminating paper documents and the need for human intervention. However, EDI only works if transmissions are properly configured. There are no shortcuts, regardless of how long you've been using EDI. You need to go through every retailer's information and guide with a fine-tooth comb. EDI problems are very common, but they're completely preventable with proactive planning and troubleshooting.


CLICK HERE to return to the AUGUST 2017 RVCF LINK

Tags:  EDI 

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Today's Maker Movement Makes Waves in Retailing Landscape

Posted By Administration, Thursday, November 19, 2015
Updated: Saturday, November 14, 2015

by Carol Weidner, eZCom Software


These days, it pays to be creative, especially if you've got a unique product idea and a pinch of entrepreneurial knack.

According to many industry experts, today's "makers" may just reshape retailing's topography.1 These rising inventors sit at a distinctive crossroads between technological know-how and crafty prowess. Their products – ranging from smart home appliances to robots, from out of the box baby gear to clever cookies and sassy sauces – often (but not always) incorporate technology and a clever angle as part of the package.

The maker movement has picked up steam and put inventor vendors in an exceptional position. Instead of courting retailers to distribute their products, in many cases retailers are coming to them. How did a gutsy group of DIYers end up making retail industry waves?

  • Built-in PR. A myriad of popular inventor-based reality shows – over a dozen at last count, with household names like Shark Tank, Mark Cuban's American Dream, Invention Hunters, and Make Me a Millionaire Inventor – create a market for products before they launch. Many maker projects also begin on Kickstarter, which can come with its own viral buzz. Because of the positive and popular association now planted in the consumer psyche, even inventions without a media platform can ride on the coattails of their higher profile counterparts – as long as they have a compelling story and unique functionality. By entering into an exclusive or even semi-exclusive relationship with the creators of these pre-publicized products, traditional retailers entice buyers to their sites and stores – resulting in sales not only of the spotlighted inventions, but of incidental offerings as well.
  • Cost savings on research and development. With rising consumer expectations and fiercer competition, conserving resources becomes more important than ever before. Outsourcing the development of engaging, original products is a great way for vertical retailers and large manufacturers to save on the front end, but still benefit from increased sales.
  • The innovation factor. Newness sells2 and jumping on the latest and greatest brings benefits that retailers can take to the bank. With the growing popularity of Maker Faire3 events across the country, established, global manufacturers such as Intel, GE, Disney, Microsoft and Ford4 are joining retailers in the search for new ideas and applications as both Faire sponsors and exhibitors.
  • Brand enhancement. According to branding experts,5 many consumers have a latent mistrust of corporations and mass produced goods and an inherent preference for artisan and inventor-produced products. Shoppers are attracted to the individuality and the personal stories of makers, and featuring "personally-produced" goods boosts retailer legitimacy and market differentiation. On top of this, attributes of innovator narratives often strengthen and refresh core attributes of retailers' brands (e.g., pioneering spirit, American work ethic, innovation, quality, craftsmanship, etc.).
  • Quick-turn production and delivery of mass customization. 3D printers and "makerspaces"6 make it much faster and less expensive to create a prototype and bring it to market, enabling makers to pivot with today's rapid-paced changes in technology and consumer demand; these tools also enable designers to easily and efficiently fulfill consumers' desire for personalized products.

So Who's on Board?
Traditional retailers like Staples,7 Target, Home Depot, Barnes and Noble8 and many more have embraced the creative inventor movement, installing showcases of maker stories and products in their brick-and-mortar and online stores, sponsoring Maker Faires, and otherwise engaging their brands with all aspects of limitless inventing. Many large manufacturers and vertical retailers (e.g., Levi's, GE, Intel) have co-opted maker culture and inventor partners into their sales and marketing as well. Trade publications9 devoted to the niche have expanded their readerships and trade shows have added and enlarged inventor pavilions. Amazon, the nemesis of traditional retailers, has ironically given one of the strongest testaments to both the pervasiveness and growing importance of inventive products to retailing. Recently, the e-tailing giant 1) announced a new marketplace, Amazon Launchpad,10 designed to give entrepreneur inventors a way to bring their products to market online (and get Amazon in on the action11) and 2) unveiled its Amazon Exclusives12 section, showcasing unique and innovative product successes from TV shows and online.13

From the Prototype to Store Shelves
Now that the stars have aligned to bring them together, what do retailers and inventors need for a smooth and profitable collaboration? One vital tool: the right EDI provider. An inventor/retailer partnership requires high performance in key areas of order management:

  • High volume drop shipping capabilities. Direct-to-consumer shipping powers online maker sales. Partners need to move quickly and accurately to stay profitable. EDI applications should deliver automated batch processing of EDI documents for speed and compliance, custom-branded packing slips, integration with FedEx and UPS, and special drop ship pricing.
  • MTO facilitation. Maker products that follow a Made-to-Order (or MOD, Manufacturing on Demand) model require a unique suite of EDI functionalities to specifically support the customization demands of such leading edge collaborations with retail partners.
  • Ability to conserve resources. Most creator ventures are startups, short on staff and funds. As such, they benefit considerably from automated batch processing of EDI documents, automated ensured compliance to trading partner rules, and easy to use software; such features facilitate dramatic savings of both time and finances.
  • Thorough education and expert, individualized support. The majority of new product manufacturers are experts in their product lines, but usually untrained in the trading partner's process. Customized support, tailored to their experience and specific business needs, enable fast and profitable cycles with trading partners and virtually eliminates the retailer challenges of onboarding vendors unfamiliar with EDI.

[1] http://www.forbes.com/sites/oracle/2014/05/29/maker-movement-fuels-apps-robots-and-internet-of-things/  
[2] http://www.toynews-online.biz/news/read/uk-indie-retailers-look-to-local-inventors-for-innovation/045203  
[3] http://makerfaire.com/  
[4] http://makerfaire.com/new-york-2015/sponsors/  
[5] http://www.adweek.com/news/advertising-branding/which-big-brands-are-courting-maker-movement-and-why-156315  
[6] https://makerspace.com/  
[7] http://www.staples.com/Shark-Tank-Products/cat_BI979844  
[8] http://www.barnesandnoble.com/h/makerfaire/  
[9] http://makezine.com/?utm_source=makerfaire.com&utm_medium=brand+bar&utm_campaign=explore+all+of+make  
[10] http://www.amazon.com/b?ie=UTF8&node=12034488011  
[11] http://www.entrepreneur.com/article/251507  
[12] http://www.amazon.com/b?ie=UTF8&node=11024013011  
[13] http://www.entrepreneur.com/article/243835


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

CLICK HERE to return to the NOVEMBER 2015 RVCF LINK

Tags:  EDI  Entrepreneurs  Inventors  Makers 

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Integrated EDI: When Built Right, a Powerful Compliance Tool

Posted By Administration, Thursday, August 13, 2015
Updated: Wednesday, August 12, 2015

by Carol Weidner, eZCom Software


Enhanced compliance brings opportunity. Vendors who excel in this area enjoy clear advantages, such as avoiding chargebacks that may add up to hundreds, or even thousands, of dollars per year, as well as improved relationships with retail partners. A strong compliance record with retail partners can result in the following competitive gains: larger and more frequent orders, fast tracking at the distribution center, an accelerated and efficient sales cycle, better cash flow through faster payment of invoices, bargaining power, improved reputation, and increased business.

Tools, technology and partnerships are available to help vendors heighten compliance and take advantage of these clear benefits. Integration of order management ranks high on this list. More and more, vendors turn to integration of EDI with inventory, shipping, back office, ERP, and/or warehouse management as a tactic to improve performance. Many EDI integration providers promise these benefits and, if implemented successfully, integration of EDI with supply chain applications can in fact increase compliance dramatically. Through heightened automation, an integrated order management process significantly decreases chances for human error (e.g. incorrect re-keying of data), reduces order processing time and enhances speed – factors of great importance in the era of omni-channel retailing and drop ship.

A Sound Foundation
Any system, however, is only as strong as its component parts. Providers of integrated EDI solutions build those integrations in conjunction with their EDI product. If the base EDI software does not feature automated compliance safeguards, errors can occur that may result in chargebacks and damaged relationships with trading partners. Accounting and inventory inaccuracies may surface as well – leaving vendors worse off than before beginning the integration project. Prior to embarking on an integration initiative, make sure your provider's EDI application offers:

  • Automated compliance checks. Each retailer's specific trading rules should be programmed into the EDI application to ensure compliance throughout the order management process and EDI providers should update these trading rules as needed in accordance with retailer changes. EDI solutions should automatically pre-validate outgoing documents prior to sending to ensure all retailer requirements are met, catching potential errors and preventing documents from being sent until corrected.
  • Batch processing to reduce manual entry and re-keying of data. Batch processing is key to eliminating compliance issues due to human error. Choose a provider with an EDI program that enables 1) processing of multiple ASN's, invoices and other EDI documents at one time, 2) necessary updates and adjustments to EDI documents through a minimal number of steps, and 3) the ability to pack multiple ASN's with one command.
  • Ability to archive records for at least three years. This enables vendors to correct errors if a retail partner misplaces a record or incorrectly levies a chargeback.
  • Excellent customer service and educational support. Responsive support increases the value of your EDI application tenfold. Support staff should have an understanding of all retail partners' compliance specifications, expert knowledge of EDI in general, ability to respond quickly when needed, and should offer complimentary unlimited services.

Craft It Custom
In addition, review your proposed provider's track record for on-time, successful deliveries (according to studies, the majority of integration programs fail and/or launch significantly after the project deadline), and check that the proposed integration solution strikes a balance between full automation and human intervention. A customized, hybrid approach – one that balances the cost savings, ease of use and speed of automation with the validation needed to support the compliance of your supply chain – will provide:

  • Heightened accuracy. Validation leaves room for error resolution. In a fully automated solution, duplicate purchase orders and other non-validated documents can be difficult to detect and correct if passed directly to an ERP or accounting system without an oversight step.
  • Unique business needs. Customized integration solutions can accommodate specific fields, tasks, users, and intricacies of your company's supply chain.
  • Constant change. A custom, hybrid integration puts in place extensible and modular solutions that can accommodate application updates, revisions, and technology innovations as well as changes to your company's structure, size and focus.

Do it right and integration of EDI with the supply chain will do wonders to increase the compliance of your order management.


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

CLICK HERE to return to the AUGUST 2015 RVCF LINK

Tags:  EDI 

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From the Desk of Kim Zablocky: Look for a Deep Dive into EDI at the RVCF Fall Conference

Posted By Administration, Thursday, July 9, 2015
Updated: Tuesday, July 7, 2015

After the New York Herald reported that Mark Twain was "grievously ill and possibly dying" in 1897, Twain issued his famous response (which is often misquoted):

"The report of my death was an exaggeration."

Mark Twain could have been talking about EDI 20 years ago. Many thought the Electronic Data Interchange, the standard format used by trading partners to electronically exchange information, would have disappeared by now, replaced by something more "cutting edge."

Obviously, predictions of EDI's demise have been greatly exaggerated.

EDI is still alive and well, but it has become somewhat of a lost art. A number of folks in the retail industry, particularly the younger generation, don't fully understand EDI. Many companies lack in-house EDI expertise and are using very old software that can't be updated to the latest and greatest version of EDI.

That's why the RVCF Fall Conference will take a deep dive into EDI communication in a number of sessions.

Michael Kotoyan, Founder and Instructor at the EDI Academy, will lead six workshops, each focused on a different type of EDI. Michael has more than 15 years of experience in EDI and vendor compliance and has provided training in EDI fundamentals and best practices for more than 600 companies worldwide. His workshops at the Fall Conference will include:

  • EDI for Finance. This workshop will show you how to implement EDI transactions such as the 820 RA/Payment and the 823 Lockbox. Finance EDI can help you improve productivity and reduce costs and errors in your treasury and accounts receivable departments.
  • EDI for Inventory. An inventory management system is incomplete without EDI. Learn best practices for EDI transactions such as the 846 Inventory Inquiry/Advice, 947 Warehouse Inventory Adjustment Advice, and the 852 Product Activity Data. This will enable you to provide inventory visibility to your partners and optimize inventory to meet goals for product availability and ROI.
  • EDI for Sales. Studies show that the data input for about one quarter of Business Intelligence and Decision Support comes from EDI transactions. Learn best practices for implementing the 852 and other EDI-related transactions and watch your sales department reap the rewards.
  • EDI for E-Commerce. E-commerce EDI usage is exploding. This workshop will show you how to avoid common pitfalls and master transactions such as the 855 PO Acknowledgement, 869 Order Status Inquiry, 870 Order Status Report, and 846 Inventory Inquiry/Advice. Successful e-commerce EDI will help you boost productivity, reduce errors and improve trading partner relationships.
  • EDI for Transportation. Transportation EDI is very powerful but underutilized. 3PL's, freight carriers, suppliers and retailers can benefit from learning how to manage transactions such as 110 Air Freight Details and Invoice, 204 Load Tender, 210 Invoice, 214 Transportation Carrier Ship. This workshop will show you how to use this information to track shipments and optimize your transportation management system.

Kelvin Takhar, General Manager of Edisoft, will also lead a two-part session entitled 5 Key Principles for Managing EDI Costs. Edisoft is a provider of EDI solutions that are engineered to work seamlessly with the native databases of the most popular accounting systems. Kelvin will share best practices that will help retail suppliers maximize the performance of their omni-channel initiatives.

Part 1 of this session will cover the five principles and how to align them with an effective omni-channel strategy. Kelvin will also discuss tactics used by leading suppliers to manage EDI transaction costs, and how these tactics have delivered measurable results in food and beverage, apparel, electronics, consumer goods and other verticals. Part 2 of this session will be an open forum that will feature discussions about the best way to apply the five key principles for managing EDI costs, and how to overcome three common supply chain challenges.

Another highly anticipated session will show attendees how to maintain accurate data flow when doing business with two of the world's largest online retailers, Walmart.com and Amazon. Suppliers wishing to work with or improve their performance with Walmart.com and Amazon are strongly encouraged to attend this session and understand the complexities of their requirements.

Using glue, string and Band-Aids to squeeze every last drop of usage out of old EDI software won't cut it anymore. To operate more efficiently and effectively, retailers, suppliers and service providers need to understand how data flows work and how to map them.

The great part about these sessions at the RVCF Fall Conference is that we have no hidden agenda. Our only goal is to bring all trading partners to the table to collaborate and share ideas so everyone can take full advantage of EDI. To learn more about these and other sessions at the Fall Conference, please contact Susan Haupt at shaupt@rvcf.com or 646-442-3433.

Kim
kzablocky@rvcf.com
(646) 442-3473

CLICK HERE to return to the JULY 2015 RVCF LINK

Tags:  EDI  RVCF Fall Conference 2015 

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EDI on the Edge: MTO Collaborations May Be the "Next Big Thing"

Posted By Administration, Thursday, June 11, 2015
Updated: Tuesday, June 9, 2015

by Carol Weidner, eZCom Software


People like it how they like it. And although this truth rings especially true with consumers, bespoke and customized items have traditionally remained the domain of the privileged few. The recent increase in both technological possibilities and consumer expectations, however, has led to the mainstreaming of "mass customization" – the making-to-order of everything from shoes and bicycles, to DVD's and dolls.

Mass customization differs from high street hand-tailoring or made-to-order fine jewelry in that it is personalization, scaled up – making customized items affordable for consumers to buy and manufacturers to produce. Recent advances in 3-D scanning, modeling and printing; more flexible production systems; advances in enterprise and production software and sizing algorithms; and innovation in social technologies and platforms have all converged to make this improbable scenario possible. And the ever-growing consumer expectation to having demands met quickly, conveniently and inexpensively, have made it – one could argue – inevitable.

How Does MTO Work?
Made-to-order (MTO) manufacturing diverges from a traditional made-to-stock (MTS) model in that it uses a "pull" supply chain model, rather than a "push" paradigm. In MTO, the manufacturing (or assembling) process begins only after a customer places a confirmed order. The quantity to produce per product specification is one, or only a few (as opposed to traditional MTS, where manufacture of multiple items per product specification would precede defined demand). The challenge of MTO, of course, is to deliver items that fulfill production guidelines efficiently, cost-effectively, and within promised time frames. Mastery of such "lean" manufacturing techniques, however, can add up to dramatic savings through elimination of physical inventory, plus significant market opportunities and competitive advantage.

Early adopters of MTO (also referred to as "Manufacture on Demand" or MOD) have included the book publishing and DVD industries as well as Dell computers and the National Bicycle Industrial Company of Japan. Levi's and Nike also numbered among the first to join the growing personalized market, offering customized and style-your-own options online and in their flagship stores. In the shoe industry, some innovators include Ferragamo with online customization options for their Vara ballet flats and men's Driver moccasins, Jimmy Choo with "design online, pick up in store" possibilities, Converse offering customized graphics and colors, as well as others. Some notable apparel adopters include online made-to-measure suit manufacturers Black Lapel and Indochino as well as technology licensers and developers AM4U (Apparel Made for You) – a group of apparel industry luminaries providing cutting edge body scanning technology integrated with adjustable pattern software, color changes on the fly, waterless textile dying, and other novel resources. Standouts in the toy sector include AvaStars' unique flagship stores, which deliver a 3-D "selfie" experience that results in both a customized short film and a fully posable doppelganger action figure; and UK firm Makies, which recently hit the news for their 3-D printed look-alike dolls for children with disabilities.

The Next Wave: Retailer/MTO Manufacturer Partnerships
Initially, most MTO manufacturers have offered their products through a proprietary online presence and/or through their own brick-and-mortar locations. However, the MTO trend does not need to disrupt retailer-manufacturer partnerships. In fact, forward-thinking retailers and MTO manufacturers have recently created highly successful partnerships that have expanded the reach, cache, and bottom lines of both companies. Standout examples include the Manolo Blahnik design-your-own boutique for Neiman Marcus online and the in-store/online partnership between maverick MTO shoe brand Shoes of Prey and Nordstrom. In the latter, customers may shop for Shoes of Prey remotely on Nordstrom.com and enjoy interactive virtual shoe design experiences within exclusive in-store boutiques.

EDI for MTO
Such groundbreaking retailer/MTO manufacturer partnerships require EDI and since such partnerships are new and, to some degree, uncharted territory, not just any EDI will do. Some key functionalities to look for in an EDI provider facilitating an MTO collaboration include:

Drop ship performance – Since neither the manufacturer nor the retailer have physical inventory on hand, all MTO partnerships will follow a drop ship-to-consumer fulfillment model. And since profit hinges even more tightly on scalability, every opportunity for streamlining and efficiency becomes essential in the order management and fulfillment processes. Look for an EDI provider that offers the following drop ship capabilities:

  • Custom branded packing slip – To create a seamless customer experience, most retailers require that their supplier partners create a custom packing slip that includes the retailer's name, logo, address, website, and any additional required information.
  • Integrated shipping – If possible, it's best to work with a platform that can integrate with FedEx and UPS, which saves time and resources while decreasing the margin of error.
  • Extremely efficient EDI – Drop ship providers – especially those operating on an MTO business model – must be able to process many documents quickly in order to save time and money. Batch processing of ASN's, invoices and other documents is crucial. Auto-creation of invoices and other timesaving features can also preserve resources.
  • Special drop ship pricing – EDI services must be priced to ensure the high volume, low quantity model remains profitable.
  • Exceptional customer support – To successfully handle high volume, suppliers need EDI customer service teams who provide education and support whenever needed, for as long as needed, until any problems are resolved.

Integration capabilities – Successful MTO manufacturing usually necessitates close connection of multiple novel applications in the areas of production, ordering, fulfillment and back-end. Most often, the more automated and interconnected the MTO supply chain, the better. For this reason, choose an EDI application and provider with a strong facility for customized integrations and a record of on-time delivery.

Flexibility and quick rate of response to customer needs – An MTO partnership will rely on many aspects of a "typical" order management process. However, it will also require breaking new ground. Your EDI provider's customer service and implementation teams must respond quickly to requests, think out of the box, and have a strong relationship with your retailer(s).


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

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Enterprise Application Integration of EDI Data – Automate or Customize?

Posted By Administration, Thursday, August 14, 2014
Updated: Tuesday, August 12, 2014

by Carol Weidner, eZCom Software


No doubt about it, integrating the solutions that facilitate your supply chain – what analysts call "Enterprise Application Integration" -- can exponentially streamline your trading processes. Even the smartest, most automated supply chain management application loses value when it operates in a silo. Lack of communication between software solutions leads to multiple inefficiencies: replication of data in multiple locations, overinvestment of time and resources in managing processes that could be automated, and increased audits and errors.

Today's best practices prescribe linking supply chain software in an automated manner with back office, warehouse management, CRM, and other business process solutions. The goal is to simplify and automate business processes to the greatest extent possible, while at the same time preserving the integrity of existing applications and data structures.

Not only is EAI desirable, it is fast becoming an industry standard. So as you compose your own plan for implementation, should you opt for a more fully automated end result or place more value on flexibility and preservation of customized business specifications?

Automation
A more fully automated "out of the box" integration has allure. Obvious advantages include:

Time savings: Ability to manage multiple business processes from a single GUI (graphical user interface) saves time and reduces steps (and, in the case of full automation, it, at least in theory, eliminates steps, cutting out human management of processes).

Cost savings:
Fewer hours and less manpower means fewer resources applied. And, a fully automated "plug-in" solution without customized features may be priced lower.

Ease of use: Elimination of the need to remember and execute multiple steps to move data where it belongs makes day-to-day operations easier.

Speed of implementation: A fully automated "plug-in" solution without customized features may have a quicker set-up time.

Customization
Flexible, custom-built solutions also have their selling points:

Error resolution: Running a business has nuances that fully automated integration solutions may not take into account. While these automated solutions provide streamlining and speed, they may fall short on accuracy. Non-validated documents can be difficult to detect and correct if passed directly to an ERP or accounting system without a validation step. If the EDI application has strong validation capabilities, it can be more effective to load orders into the EDI application and check for compliance before transferring to the ERP. This extra step adds integrity – only documents that do not fail validation go directly into the ERP, while others can be presented for correction before uploading.

Sensitivity to particular business needs and processes: A customized solution can be set up to accommodate specific fields, tasks, users, and all the particularities of a company's supply chain.

Constant change: The very nature of EAI is dynamic – it requires a pathway for ongoing implementation to accommodate emerging requirements such as application updates, revisions, and technology innovations. Company structure, size and focus may change as well. Customized implementations can be built extensible and modular to allow for such future changes.

Consideration of "protectionism" and specifics of company culture: The applications whose data is being integrated often belong to different departments that have technical, cultural, and political reasons for not wanting to share their data with other departments. Customized solutions can be negotiated to accommodate the particular needs and preferences of user departments.

Competing standards: Since EAI is an emerging phenomenon, standards are not yet universal. This means an "out of the box" fully automated solution may likely require customization in any case.

The hybrid solution
The good news is automation and customization are not mutually exclusive. To reap the benefits of EAI and avoid the pitfalls, opt for a happy medium. Plan an implementation that allows for as much automation as possible, while still preserving validation and the custom processes that will support the success of your supply chain.


Carol Weidner, CEO of eZCom Software, is living proof of the adage, "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling homewares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or (201) 731-1800.

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Tags:  EDI  Enterprise Application Integration 

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