What’s the best EDI solution for food & beverage businesses?

Many businesses in the food & beverage sector, whether they are a manufacturer, distributor or retailer, already use EDI software to digitally send and receive invoices, orders, dispatch notes and other documents required when they buy, sell and ship products.

In fact, most large retailers mandate EDI compliance with their suppliers.

Producers who don’t use EDI software to exchange digital documents may find themselves unable to trade with some of the larger retailers. Ocado, for example, has recently notified all its suppliers that within the next two months, all invoices must be received digitally, via EDI software.

If your business needs to start using EDI software for the first time, or you’re unhappy with your current provider and are looking to switch, you want to make sure you choose the best EDI solution for the food & beverage sector.

Realising the benefits

At soft drinks manufacturer AG Barr, the decision to find the best EDI solution followed a project to compare the error rates in documentation between partners who used EDI software and those who didn’t.

John Thompson, AG Barr, Integrated Systems Manager, said: “We found there were far more human errors where the customer was relying on sending us PDFs and email attachments. Rectifying errors typically entails issuing credit notes for returns and fulfilling mistaken orders. We confirmed that the proportion of credit notes issued to those not using EDI software was much higher than for the rest of our customer base. The industry average for raising a credit note is £25. To rectify a mistaken order, you have to take into account the lorry journeys there and back and the time involved in double-picking. It obviously adds cost.”

Projected annual savings with just the priority partners were put at £15,000. In the whole period since implementation, savings have reached £200,000 with 572 working hours freed up annually for higher-value operations.

The benefits of rolling out Transalis eDI™ with priority trading partners became clear straight after implementation: dramatically fewer credit notes needed and a huge process improvement more than covering the investment spend on the project.

John said: “Our contact with Transalis came at exactly the right time as we looked to improve our processes, do some business process engineering and upgrade our EDI capabilities. The benefits have gone beyond our original business case about the cost of credit notes. Being able to put orders automatically into the system is a big timesaver for all aspects of operational correspondence. The platform has made life easier for our customer service team. It really has made a positive difference. We are seeing ROI by having people focused on more value-added activity. Customer ratings and feedback also show we have improved customer satisfaction levels.”

You need the best EDI software

The annual food bill for UK consumers is set to reach £211 billion by 2022, with online grocery shopping the fastest-growing part of the market.

But there is a problem for online retailers: moving and delivering perishable items around the country generates relatively small profit margins compared to in-store sales. Online margins typically account for just three to five per cent of earnings before interest and tax, meaning the more delivery you do, the greater the potential to erode your net profit. That’s why it’s essential to optimise the efficiency of internal and external processes, including supply chain management. And that’s where choosing the best EDI solution comes in.

EDI, standing for electronic data interchange, is the preferred solution for ensuring different trading partner’s systems can speak to each other.

EDI managed service

The best EDI solution is an EDI managed service that meets all the formatting and translation requirements of your supply chain.

Built-in integration means all your business documents, including structured and unstructured data, can be exchanged without you having to learn the technical ins and outs.

A cloud-based EDI solution from Transalis achieves this. In a nutshell, it maps the required data output from the source file into the relevant EDI format for you. As soon as it is up and running, you and your partner or partners can be trading electronically secure in the knowledge that you have a robust, agile, scalable and high-performance platform supporting you.

Thanks to process digitisation and automation, EDI paper-to-digital solutions take fluctuating workflows and orders in their stride. New trading partners can be onboarded in a fraction of the time taken using paper processes.

Key considerations when choosing an EDI provider

Go for a solution that is easy to buy and simple to switch to.

That means choosing an EDI provider that doesn’t bamboozle you with complexity.

If you require a simple EDI solution to share digital documents with just one or two trading partners, Transalis offers eDI Essential, an online service that you can sign up for today. Just choose the companies you want to start trading with and we’ll do the rest.

Choose a provider that will handle the onboarding of your trading network.

Transalis will contact the businesses in your network, map and test documents, and train your trading partner’s staff so they can start exchanging documents with you electronically without any hiccups.

Look for a self-service solution without the complexities…

Gain the freedom of a self-service EDI solution via an SaaS platform whilst also benefitting from an EDI managed service, removing all complexity. Rather than settling for an outdated and inflexible EDI solution with a hefty price-tag.

You don’t want to pay an extra charge every time you add a trading partner, map a new document or make any changes.

Avoid EDI providers that still operate under an old-fashioned VAN pricing system.

VAN costs are based on the number of characters within each message, and the number of messages sent. It’s very easy for the costs to ratchet up, especially as your business becomes more successful and you start to process more orders, meaning you exceed the limit of your contract. There are no VAN charges with Transalis. Instead you have flexible pricing plans that enable your EDI software to expand as your business grows, without incurring penalties.

Choose an EDI provider that offers a transparent and up-front pricing plan.

If you need to manage a high volume of incoming orders or invoices you are likely to need to integrate your EDI solution with your existing in-house systems. Make sure your provider has confirmed the costs before you sign, otherwise you may find they suddenly spiral once you’re tied into a contract.

Make sure you choose a provider that offers a range of support levels depending on the needs of your businesses.

If your IT and internal teams are new to EDI software, you may need an extra level of support, especially during set-up and in the early stages of use. Or if you have experience of EDI software, you will need a lighter touch support service.

Transalis has a range of service levels that can be upgraded or reduced at any time within the contract depending on your internal resource.

The cost of an overly complex supply chain

Supply chain complexity carries a real cost beyond credit notes and rejected orders. Marks & Spencer once blamed an overly complex supply chain for keeping festive stock in the delivery system rather than on the shelves, leading to a surplus that had to be discounted and eating into profit margins.

More ways EDI speeds up trading

Beyond cutting errors, EDI accelerates the order-to-cash cycle and shortens order lead times, helping strengthen cashflow for food and beverage businesses. It also automatically flags up rejected invoices, so issues are caught and resolved early rather than discovered further down the line.