For Villa Maria Estate, the impetus to put EDI in place was coming from both internal and external pressures. Prior to rolling out its first EDI integration with Flow Software, Villa Maria was doing everything manually. Brett Harvey, Technology Solutions Manager at Villa Maria Estate, says the manual processing was seriously impacting the business.
“It was literally killing the business. Every single order was being keyed in manually. The business was faced with either hiring a lot more staff to handle the manual processing or turning to automation.”
At the same time, Villa Maria was under pressure from its major supermarket customers to switch to EDI. It felt like the perfect time to start the journey to integration and digital transformation.
Villa Maria’s first EDI integration was with its third party logistics (3PL) partner in Australia, with orders sent via Flow and confirmations on fulfilment coming back. That first project soon led to more and along the way, Villa Maria learned plenty of lessons, some of them unexpected, about how to do EDI well and how it can deliver more benefits than you were expecting.
1. Prove the value – then accelerate the benefits
Villa Maria’s first EDI integration with Flow showed the business that there was real value waiting to be unlocked. Brett Harvey says that with any business, the initial EDI project will always be the hardest, both in terms of delivery and in making the business case in the first place. But a crucial thing to remember is your first project will unlock value that makes subsequent projects easier and cheaper to do. With each one, the benefits to the business in speed, reduction in errors and improved efficiency compound.
“Building all the master data feeds is a huge part of the job. We did that for our first project and then when we next did a full EDI integration with Foodstuffs we were able to reuse probably 70% of the code. Our next supermarket projects became almost a lift and shift. Then our Australian supermarket customers wanted the same. Once we’d enabled EDI with all our big supermarket customers we started looking around for other customers where EDI could scale benefits.”
“We just kept building on work that was already done, so that initial project unlocked a chain of value that is ongoing and consistently delivers value.”
2. Integrating business rules reduces complexity
EDI integration isn’t just about removing bottlenecks in order fulfilment. Many businesses have unique situations that complicate their ordering and fulfilment process and the business rules built around these situations can create complex scenarios. Complex pricing and inventory management rules add to the mix. But building your rules into your EDI and integration processes can reduce those complex interactions to simple processes.
“In the wine industry we have the concept of allocations, which means we have certain products that are scarce and need to be allocated to customers in limited amounts. We need to ensure these allocations are adhered to. Flow was able to automate the rules around this as orders came in, comparing the order price to the ERP price, checking stock availability and checking that the customer hasn’t exceeded their allocation for that particular product.”
If any validation fails, only then does customer service need to get involved, to drill down to see if there’s action they need to take,” says Harvey.
3. EDI can be internal, not just external
One thing Villa Maria discovered, says Harvey, is that it could treat its own systems in the same way it treated customer systems.
“We realised we could use the same approach we’d been taking with our partners and apply it to our CRM. Previously, there had been no integration between our CRM and our ERP. The CRM would email orders to customer service who’d key them into the ERP. But you can treat your CRM like any other partner. It has the same data points; prices, stock and so on. We just turned those into EDI messages that get fed into Flow’s validation routine and then into the ERP.”
The CRM wasn’t the only system that benefited from the EDI approach. Harvey says the business had other manual processes taking time and resources that people didn’t realise were happening.
“We had a manual data entry process that was happening at the end of each bottle run. At the end of a run there’s information that needs to be pushed into the ERP system. The people doing this were using a spreadsheet to collate the information. I had a chat with Flow and we figured out we could convert this into an XML structure and feed it straight into the ERP.”
“That eliminates 30 minutes of work at the end of each packaging run.”
4. Not all benefits are planned
Once you’re dealing with connected data, there are ways it can be used that may not have been immediately obvious when you first set out to do EDI. Harvey says Villa Maria learned to discover ways to improve their process by applying EDI to processes that weren’t originally considered.
“After we’d implemented the validation process we understood from looking at several months of reports that a significant number of those orders were passing validation without any red flags, which meant we didn’t actually need Customer Services to be involved at all. We could pass those orders directly to the warehouse. So we put that rule in place, tagging orders for auto-release to warehousing if they pass all validation checks, which has further reduced the time to fulfilment.”
“Another example is vintages. Not all wines age well, and for those that don’t you want to ensure you’re sending out the oldest bottles first. Our general rule is first in, first out. So we put that rule into the validation routine. The system looks up the oldest SKU and loads that against the order by default, which was one less thing our customer services team even had to think about.”
Other benefits were less time to onboard staff and importantly, less frustrations and disruptions due to incorrectly keyed orders or because inventory levels were not checked.
Ultimately taking away these frictions results in happier customers and a better customer experience.
5. Avoid traps with a bit of pre-planning
EDI projects will take time to bed down, and chasing down errors is part of the process. But, says Harvey, you can make that process much easier with a bit of planning beforehand.
“It might sound simple, but ensuring you’ve got a good file naming convention can save you a lot of pain. Whether it’s a purchase order number, or a sales order number, it makes it so much easier to troubleshoot if you know exactly what you’re looking for. And in the same vein, we avoid batch processing messages. If there’s a problem, and you’re batching your messages, then all the messages in the batch are affected. Where possible we try to keep our messages as discrete units, so each is a single transaction. That way any error only affects a single transaction.”
6. Chase errors aggressively
When it comes to errors, Harvey says it’s easy to fall into the trap of tolerating a bit of noise, without realising the implications of that noise.
“With our first integration, it was working and saving time but the hidden cost was sitting with the IT team. We were getting errors which the IT team had to attempt to resolve and they were struggling to keep on top of it. So we analysed a week’s worth of issues and realised there were four key problems accounting for the bulk of these errors. We aggressively went after those and solved them all within a couple of weeks. The noise went away and the IT team could focus on other issues.”
Harvey says resolving that problem had bigger implications than the IT team’s workload.
“If you live with that noise, it erodes your ability to build more integrations. It erodes the value you’re getting from the whole process. So track them down and kill them.”
7. Make the business case for each integration
Finally, Harvey warns that no matter how appealing a new EDI project might appear, it is important to be critical and make a strong business case for each project.
“It’s important to challenge the business on new projects. Your sales team will naturally be very keen to do EDI integration with new customers, but you’ve got to prove the value is there before doing that.”
“Each project has both a financial and an opportunity cost and not every customer will end up doing business with you at the scale where EDI delivers the highest value.”
Learn more about EDI integrations with Flow Software
Connecting with your customers and partners in real-time via Electronic Data Interchange (EDI), allows you to automate your data entry, improve data accuracy, streamline transactions, increase productivity, reduce costs, improve customer and supplier relationships and get paid faster! Make your business smarter, faster and more efficient by integrating your existing business applications and automating EDI with trading partners of all sizes.