Any consumer goods distributor that works with large retailers knows what it’s like to receive that dreaded chargeback or notice of non-compliance. These compliance requirements help retailers stay competitive while meeting their customers’ demands and are intended to reduce costs, build value, and improve supply chain efficiencies.
In theory, these requirements make sense. In the real world, however, they often find distributors out of compliance, dealing with chargebacks, paying penalties, and receiving poor performance marks. To avoid these profit-cutting problems while keeping customers happy, distributors need technology systems that are fast, accurate, and connected.
“There’s a need across the board to be able to exchange documents quickly and accurately, all while adapting to changing retailer requirements as they come about,” says Ken Weygand, Solutions Architect for Aptean’s Apprise ERP. “This should take place without the need for third-party consultants or bolt-on software solutions.”
Often required by major industry players, EDI has become the primary way that retailers and suppliers communicate electronically. There are some key challenges that distributors are grappling with in the retail environment, and an ERP system that includes built-in EDI functionality can help companies meet their customers’ demands, improve their own operational performance, and improve their bottom lines.
Managing Customer Expectations
As the speed of e-commerce and the complexities of omni-channel retail continue to grow — and as retailers hone their compliance policies in order to keep up with these shifts — these compliance issues are becoming more and more common.
Avoiding them means going directly to the root cause of the problem, which is usually a lack of reliable information-sharing across the distributor’s suppliers and customers. “The moment you talk about using disparate applications, and once you start having to bolt different systems onto one another, you lose data integrity,” says Weygand. “You’re also losing time and introducing inaccuracies as the data moves from one system to the next.”
With no single person or system to blame for those errors, a lot of finger pointing goes on both internally and externally as everyone tries to determine what caused the problem. “Having everything integrated into a single ERP,” says Weygand, “eradicates that uncertainty and finger-pointing and ensures that distributors maintain good scorecard ratings with their retail customers.”
Making the Direct EDI-ERP Connection
An ERP with built-in EDI integrated eliminates the need for third-party service providers, bolt-on applications, and manual processes. “Because there’s just one source coming into one system, the whole transaction is handled on the spot,” says Weygand, “including all communications, compliance, and outbound activity.”
Giving distributors full EDI control from a central location, the ERP ensures that those companies can receive orders at noon and get them out the door by 5 p.m.—versus the “batch” processing of orders that many other systems use.
Going a step further, these offerings help distributors quickly onboard new customers from the EDI perspective, and shepherds them through the testing and validation processes. It also serves as the “eyes and ears” on daily activities for distributors, which need to know the answers to questions like: Did any issues arise? Were there any pricing discrepancies? Were any PRO numbers missing?
Playing by the Rules
Retailers are putting a lot of pressure on their suppliers right now. In a world where data errors, disparate systems, and poor communications can lead to margin-eroding penalties and chargebacks, more companies are turning to solutions that directly integrate with EDI to deliver a single, streamlined platform for consumer product sellers.
“We have one customer who reduced chargebacks by 98% since implementing Apprise ERP,” says Weygand. “Retailers look for ‘soft targets’ with their chargeback processes, and once our customer had the evidence to dispute the retailer’s claims over and over, they stopped penalizing them.”
Ken Weygand is a Senior Solutions Consultant with Aptean Apprise ERP. An all-in-one system designed to handle everything consumer goods importers and distributors need to run and grow their businesses, Aptean’s Apprise ERP creates efficiencies across the enterprise through automated distribution resource planning, collaborative forecasting, retailer compliance management, and direct-to-consumer shipping functionality, among other capabilities. Visit www.aptean.com for more information.