Avoid Unnecessary Chargebacks and Become a Preferred Vendor for Retailers with Compliant EDI
Staying compliant with your retail trading partners’ EDI requirements is crucial to a positive customer relationship. However, managing ever-evolving mandates across dozens or hundreds of customers is a struggle for many suppliers. Unfortunately, the difficulty is only increasing as retailers grow both in store locations, as well as online through eCommerce storefronts and drop ship programs.
To stay ahead, you need to understand how EDI compliance works, why it’s important, and how to become EDI compliant without stretching your resources too thin.
What is EDI Compliance?
EDI compliance mandates are requirements created by individual retailers who want to standardize communications with their supplier community. Each retailer’s guidelines are unique, according to the EDI documents they use, timelines they require, and other factors. By using one EDI standard with all their suppliers, retailers can drive down costs and reduce supply chain inefficiencies.
It’s imperative that suppliers remain compliant with their partners’ EDI guidelines. Failure to do so can result in costly chargebacks, delays in payments, and/or negatively impact your vendor scorecard performance.
Common Compliance Challenges
EDI mandates are complex and vary from retailer to retailer. They can also be different for the same retailer depending on specific programs, such as store deliveries vs. drop ship deliveries. Common issues suppliers run into include:
- The Advance Shipping Notice (EDI 856) was incorrect, incomplete, or did not arrive in the specified timeframe
- EDI Invoices (EDI 810 and 880) were rejected for missing or incomplete data
- Purchase Order Acknowledgement (EDI 855) were not sent within the required timeframe
- Functional Acknowledgements (EDI 997) to orders failed to send
Benefits of EDI Compliance
The number one reason to focus on EDI compliance is to reduce unbudgeted cost offsets incurred by non-performance. But there are other EDI benefits as well:
- Retailers prefer high-performing suppliers and may favor you over the competition.
- Compliant suppliers can more easily get new products on shelves.
- Following compliance standards can increase your internal efficiencies, leading to even more cost savings.
10 Best Practices for Retail EDI Compliance
An effective approach to compliance includes innovative technology, communication,
efficient internal workflows, and continuous improvement. You’ll need to:
Get to Know Your Customers.
Make sure to read any vendor guidelines and documentation from your retail partners. Many retailers update their vendor guidelines regularly, so it’s important to review any changes to make sure you stay compliant.
Cross-functional teams make it easy to implement changes based on customer needs. Make sure these teams include subject matter experts from each core operational area, to provide a full view of your processes and areas for improvement.
Streamline Compliance into Your Operations.
Rather than checking for EDI compliance at the end of order processes, integrate compliance standards into your daily operations. This can help avoid compliance mistakes at each step in your supply chain. Make sure your processes are built to support compliance, and any technologies (WMS, EDI, OMS) are properly configured.
Ensure Endless Process Enhancement.
Changing EDI mandates are the perfect opportunity to re-evaluate business practices and find new efficiencies. This can help transform EDI compliance from a business cost to an added value. Make sure your team members are empowered to submit suggestions; often those in the day-to-day work have valuable insights into process improvement.
Measure, Measure, Measure.
Create benchmarks for key supply chain processes, so you can sell where you are underperforming. By using an EDI platform with analytics, you can quickly pinpoint specific EDI areas that need improvement, and make strategic decisions on how to do so.
Learn from the Best.
Take a cue from retailers, who work hand-in-hand with suppliers to find efficiencies throughout the supply chain. Many trading partner requirement changes are made to help retailers stay competitive in evolving markets, which means you can take advantage of their insights to make changes in your own business.
Choose Technology that Works for You.
Often, businesses are held back by overly complex and disjointed systems that require significant effort to manage. To master retail compliance, invest in EDI integrations and other connected solutions that support compliance for all your trading partners.
Many retailers offer vendor compliance workshops; attending these can help improve your scores and prove your commitment to your partners. These workshops are also an opportunity to get the “inside scoop” on upcoming compliance changes, giving you extra time to prepare and make any necessary changes to your processes.
Stay in Touch.
Keep in contact with retail partners to make sure you’re in tune with their needs. Not only does this help with EDI compliance; it also ensures that your retail partners stay invested in (and therefore, committed to) your business.
Invest in Your Sales Team.
Make sure your sales team understands the value of the efficiencies you are building through your compliance efforts, so they can use these to make new sales. One great way to do this is by offering training from operational teams. By connecting with the team members that understand your capabilities first-hand, the sales team receives valuable information they can leverage during the sales process.
Compliant EDI Solutions
TrueCommerce’s integrated, web-based EDI solution includes initial trading partner mapping, as well as proactive monitoring and automatic mapping updates. You’ll be able to:
- Automate the exchange of EDI documents to meet document sending/receiving timeframes.
- Receive automatic alerts on incomplete or incorrect documents, before they send.
- Track your team’s performance by retailer with advanced analytics.
- Reduce the compliance burden on your internal resources.