The Benefits of EDI for 3 Grocery Suppliers
If you want to know how profoundly an efficient technology solution can impact a business, just ask a grocery supplier. To compete, food and beverage suppliers need to operate with accuracy and speed, quickly fulfilling high-volume orders from retailers while managing complicating factors such as limited shelf-life and traceability requirements. There is little room for error in the grocery business because errors mean delays, frayed partnerships, and product and sales losses.
In such a fast-paced industry, the last place you want to be in is the back office entering data manually.
Three grocery suppliers met these challenges by implementing TrueCommerce food and beverage solutions in their businesses. For cactus water producer ¡Cactus!, natural food provider Carrington Farms, and The Little Potato Company, electronic data interchange (EDI) was a game-changer in several key ways.
Order Processing Simplified
At some point in their journey, every grocery supplier is faced with the need to enable EDI in their business. For ¡Cactus!, a young company, the catalyst was a new partnership with Texas grocery giant H-E-B. Founder Sarita Lopez discovered that to seize the opportunity to reach a larger market by becoming an H-E-B supplier, EDI compliance was table stakes. “Everyone is switching over to EDI,” said Lopez. “That’s the wave: people are trying to cut out all the paper and emails going back and forth.”
Lopez found that deploying a TrueCommerce EDI solution was a huge competitive advantage that came at a lower cost than she expected. “At first, I thought EDI was going to be so much more expensive,” she said. But after only a few months, ¡Cactus! is happy to report that “TrueCommerce EDI has already paid for itself in my business.”
When larger businesses implement a robust EDI solution, they tend to see time savings as one of its greatest benefits. As Carrington Farms grew, they saw an opportunity to streamline their order processing with TrueCommerce. “We used to process each sales order individually, by hand,” recalls Bill McGuire, Business Systems Analyst at Carrington Farms. “Major customers like Walmart send orders in batches of 50 or more at a time, so this took a lot of effort.”
Today, Carrington Farms is efficiently processing 500 to 700 sales orders via EDI each week from partners such as Walmart, Target, Costco, and Amazon. They are also taking advantage of grocery-specific transaction forms such as EDI 875, EDI 876, EDI 880, and others. “Now we can import any number of sales orders and purchase order change requests directly into SAP,” says McGuire. “We also turn sales orders around into EDI invoices within SAP and send those back out automatically.”
Supporting Business Growth
By enabling automated, paperless ordering and fulfillment, EDI can also support grocery suppliers through times of high demand and growth. When an EDI solution integrates seamlessly with an accounting or ERP solution, the effects are magnified.
The Little Potato Company once used a complicated array of web portals to manage its EDI requirements from retailers, but when a large chain began requiring detailed information like advanced shipping notices, they took the opportunity to eliminate their portals and deploy a TrueCommerce solution that integrates directly with their Microsoft Dynamics NAV system. Prior to this, information was always transferred between systems manually, which Director of IT Doug Howell felt was unsustainable.
Howell was somewhat surprised that the right solution existed. “We watched this demo of TrueCommerce’s solution that snapped right into NAV, and it just made so much sense because it would fit into and improve our existing processes,” he said. “We’ve probably grown our business 20% since we started with TrueCommerce EDI. It’s allowed us to scale our business without growing headcount.”
Carrington Farms’ EDI solution also integrates with its ERP, SAP Business One. Bill McGuire credits EDI for enabling the business to handle sustained business growth and steadily increasing order volumes, reducing order processing time “from hours to minutes.”
In a time where supply chain disruptions and volatile customer demand are the rule, not the exception, rapid communication between trading partners is vital. EDI enables grocery retailers to quickly alert their supplier to changes in customer behavior. On the supplier side, the automation provided by EDI allows for faster responses and shorter lead times, helping to keep shelves full when it’s needed most.
As a produce brand, The Little Potato Company saw a significant influx in demand for their potatoes at the beginning of the COVID-19 pandemic. Our sales went up during those early days when everyone was stockpiling,” says Mr. Howell, “So, we needed orders in quicker and more accurately than ever. Having [EDI] in place let us react at scale, even under less-than-ideal conditions.”
On the other end of the spectrum was ¡Cactus!, which had to manage a worldwide aluminum shortage that made it near impossible to fulfill incoming orders. “I couldn’t get cans fast enough,” remembers Ms. Lopez. But thanks to her EDI software, she says, “I didn’t need to do any messy paperwork; I just needed to let my customer know, and the system handled the documents when we were able to fulfill the purchase order.” In a time of heightened stress, having EDI meant that customer communication was one less thing to worry about.
Enabling Product Traceability
Another benefit of implementing an EDI solution optimized for the food and beverage industry is that it can help businesses prepare for the FDA’s proposed new traceability rule, which is likely to soon become a permanent part of the Food and Safety Modernization Act (FSMA). When this rule is made law, it will establish event tracking requirements for specific foods and ingredients throughout grocery supply chains. The rule is crafted to quickly identify foods that cause foodborne illness and keeping up with the new recordkeeping requirements will be a challenge for suppliers who enter data manually.
When the rule is enacted, The Little Potato Company will be ready. It already voluntarily participates in the Product Traceability Initiative (PTI) and uses TrueCommerce’s advance shipping notice (ASN) automation to meet that initiative’s strict requirements. The company can track and trace its products while increasing its supply chain efficiencies. “Each case of product is labeled with the GTIN, lot code, and pack date, and every pallet is assigned a unique, scannable code,” said Doug Howell. “Within minutes of a truck leaving our dock, we send all that information on an ASN to customers. They scan one code and know everything that is on the pallet.”
Having this capability gives Howell confidence in the company’s readiness to serve future customers who want food producers to be more accountable. “Improved, whole-chain traceability will increase consumer confidence in the produce they eat. This is not only reducing risk to our business, but it should also help grow it.”
For these and many other grocery suppliers, eliminating manual data entry and processing through EDI is more of a must-have than a nice-to-have. It has become the gold standard for large food retailers and it makes order processing easier by several orders of magnitude. The fact that it curbs employee stress is an added benefit. As Bill McGuire put it, “From an efficiency standpoint, EDI is a godsend—the time savings are huge.”
If you think it might be time to implement a food and beverage EDI solution in your business, TrueCommerce would love to help. Feel free to reach out to one of our EDI specialists.
About the Author: Kristen Puluso has been with TrueCommerce since 2007. She is responsible for the implementation teams of TrueCommerce. Kristen joined the team as a Technical Support Representative after graduating from Robert Morris University with her Bachelors in Information System Management. After several years, she moved into leadership. Since then, Kristen has held various positions in the organization, most recently the Director of Implementations. She is passionate about great customer service and focused on metric driven results with her team. Kristen has two children, Aubrey 2 and Cameron 6. She appreciates the time she gets to spend with her family, boating at their family lake house and all of the exciting new adventures they get to do together.