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How EDI Streamlines Supply Chain Management

Companies are constantly looking for ways to optimize their supply chain, ensuring they can quickly adapt to market changes and meet customer demands on time.

In this blog post, let’s explore how EDI streamlines supply chain management and why it’s essential for businesses today, and the benefits it brings to modern businesses.

Introduction: Electronic Data Interchange (EDI) and Supply Chain Management

The evolution of technology, standards and protocols, revolutionized this field. Electronic Data Interchange (EDI) stands is one of the main facilitators at the level of supply chain innovation.

EDI (or Electronic Data Interchange) is a standard that allows the exchange of business documents between business partners. It is based on structured format and follows some EDI standards (i.e. X12, EDIFACT…). By automating EDI exchange, business partners will be able to transform most of the manual processes into efficient, real-time tasks, increasing efficiency and eliminating human errors.

What is EDI?

Electronic Data Interchange (EDI) is a technology that allows companies to exchange standard business documents—such as purchase orders, invoices, shipping notifications, and inventory updates—in a standardized electronic format.

I’m not going to go further on this topic, since we already published extensive articles about EDI and its use, which I recommend reading for more information about EDI.

For a more detailed guide on how EDI works and its common use cases, check out our articles:

What is Supply Chain Management?

Supply Chain Management (SCM) refers to complete coordination of the different elements and partners involved in the production flow of any good or service. This flow starts from its initial stages of purchasing and buying raw materials to its final delivery of the finished good to the end-consumer.

It SCM includes the phases of planning, executing, monitoring, and optimizing of all processes involved in transforming a product from being a raw material until it becomes a finished good, and delivered to the end-user.

The goal of SCM is to enhance the efficiency, reduce costs, improve quality, and deliver products faster.

SCM requires a major collaboration between suppliers, manufacturers, warehouses, transportation services, and retailers, ensuring that each step in the chain is executed on-time in a very optimal manner.

Useful: Download the Guide – EDI for Transportation and Logistics

Key Components of Supply Chain Management

For a successful supply chain management cycle, there are important key components that should be considered, planned and implemented.

  1. Planning: This is the strategic phase where companies do their research on how to meet the demand for their products or services.
  2. Sourcing: Sourcing involves selecting one or multiple suppliers who will provide the raw materials, components, or services necessary for production, for a certain product or service.
  3. Manufacturing: In this phase, raw materials are transformed into finished products.
  4. Logistics and Distribution: Once products are manufactured, they must be stored and distributed to consumers. This involves all logistical processes such as warehousing, inventory management, and transportation.
  5. Returns Management: Also known as reverse logistics, this component deals with the return of defective or excess products from consumers. Managing returns efficiently is important to minimize losses and maintaining customer satisfaction.
  6. Information Flow: Throughout the supply chain, there must be a seamless flow of information to ensure that all parties are aware of demand, inventory levels, production schedules, and shipping timelines. This helps to coordinate efforts across the supply chain, reducing delays and errors.

EDI and Logistics

Importance of Supply Chain Management

Supply chain management (SCM) is very important in today’s business landscape, to be able to deliver on-time, low-cost products and services and at a reduced risk. Here are some of the important elements:

  • Reduce Cost: SCM helps reduce costs by improving efficiencies in procurement, minimizing waste, and optimizing transportation.
  • Increase of Customer Satisfaction: Supply chain can enhance customer experience and promote loyalty. Being able to deliver to customers on time and in good condition, will improve customer loyalty.
  • Increase Company’s Agility: SCM helps companies respond to changes in demand or disruptions in the market quickly.
  • Improve of Collaboration: Better communication means better collaboration across suppliers, manufacturers, and distributors all working towards the same objective.
  • Disruption: Disruption of a Supply chain is a risk that is substantial. Such disruption can be due to different reasons (i.e. natural disasters, political instability, or other factors). Such disruptions can significantly impact a business. SCM helps mitigate risks by allowing companies to create and execute contingency plans based on maintaining relationships with multiple suppliers and monitoring global trends.

How EDI Works in the Supply Chain

As described in the above paragraph, Supply chain management (SCM), relies on several parameters to be as efficient as expected, and deliver as per business expectations. EDI has a role to play in every key component of a successful SCM.

a) Planning: during the planning phase, companies part of the SCM exchange their forecast and based on customer demands and historical sales data via EDI; as an example a distribution company will share via an EDI transaction 830 (Productions forecast and scheduling) its production planning.

b) Sourcing and manufacturing: during the sourcing and manufacturing phase within a SCM, companies will exchange via EDI all kinds of transactions to complete these cycles:

    1. Inventory feeds (EDI 846): Ral-time inventory feeds and updates, are sent periodically by suppliers and manufacturers, to their own customers, via EDI 846 transaction. This allows to update them with accurate inventory levels track stock movements.
    2. Orders (EDI 850): When a customer places an order it goes via EDI 850 transaction to the supplier, this process, would eliminate the need for manual order entry and speeds up the order processing time.
    3. Shipping and Receiving: this process in SCM uses a substantial number of EDI transactions, from EDI transactions that concerns the logistics and transportation companies (i.e. EDI 204, EDI 210, EDI 214…) to the actual shipping and receiving transaction (i.e. ASN 856).
    4. Invoicing: After the goods are delivered, the supplier sends an electronic invoice EDI 810 to the customer. The customer can then process the invoice and make the payment electronically, streamlining the entire billing and payment process.

c) Logistics, distribution and returns: again, EDI is present in all of these components in the supply chain:

  1. Logistics and distribution: lots of EDI transactions come to play, when it comes to logistics, and return, EDI 204, 210, 214…
  2. Returns: EDI 180, EDI 894 and EDI 895 are typical EDI transaction for merchandise return.

 

How EDI Works in the Supply Chain

Useful Reading: EDI for Third-Party Logistics providers (3PL)

How EDI Streamlines Supply Chain Management

Following are some EDI attributes, that have an impact on the Supply Chain management SCM:

Faster Communication

When exchanging EDI documents, companies part of the same SCM, are opting for a full automation which means, a real-time exchange of business documents, along with automated flows to process those documents.

Eliminating bottlenecks and human errors. Orders, confirmations, and invoices flow automatically between systems, reducing lead times and allowing businesses to respond faster to changes in demand, inventory levels, or production schedules.

Reduce human errors

Manual data entry is equivalent to human errors. Errors in purchase orders, inventory levels, or shipment details can lead to costly mistakes such as overstocking, missed shipments, or payment delays. Using EDI minimizes these risks by automating data transfers.

Improve data quality and integrity

Standardized formats of data, ensure that information is accurately communicated, which will certainly improve data integrity and quality. No more human errors.

Improve Efficiency

Automating supply chain transactions with EDI leads to significant cost savings, where the most important expense is labor. Typically, the labor cost of manually entering data and correcting errors is substantial.

Exchanging EDI reduces these costs by allowing businesses to process large volumes of transactions automatically.

Improve Inventory Management

Companies exchanging EDI transactions will have a much better inventory visibility to their supplier’s inventory. It will eventually enable JIT (Just-in-time) inventory strategies and control of costs.

Improve Data Security

By exchanging EDI transactions, based on standardized protocols and encrypting the data using EDI communication protocols such as AS2, sFTP, AS3 and other protocols, business partners enhance their compliance and security footprints, ensuring secured data exchange.

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The Advantages of Business Automation through EDI

Today, there are still decision-makers who are debating whether to invest in EDI integration projects or to hire a few new employees to manually enter and process data from trading partners.

Since EDI is still a difficult topic for non-technical people to understand, hiring data entry administrators may seem like a reasonable choice. It is commonly believed that EDI requires a significant initial investment.

Let’s take a look at what EDI automation is and how companies can find the most cost-effective solution.

What is EDI Automation?

EDI (electronic data interchange) is a technology used by business partners to exchange business electronic documents in standard formats without requiring human intervention.

These exchanged documents are called – EDI Transaction Set. If you want to see the full list of documents that can be exchanged in EDI format check our Complete List of EDI X12 Codes.
What is EDI

How Does EDI Benefit Businesses?

The use of EDI greatly improves the overall state of the business as it has many benefits.

– Reducing costs. Saving time for employees to process documents and enter them into databases. EDI reduces an enterprise’s printing, shipping, and storage costs.

– Speed. Documents can be exchanged instantly with a business partner. You won’t lose documents along the way or among the papers on your desk.

– Automation. EDI significantly improves the business because it automates processes and reduces the time delays associated with manual data entry.

– Accuracy.  Elimination of errors associated with manual data entry.

Useful: Download our free Guide “Introduction to EDI Communication” to learn more about EDI

What Documents are Used in EDI?

As mentioned above, you can exchange almost any type of document using EDI, but the most common ones are:

Purchase Order – EDI 850

Useful Reading: All You Need to Know About EDI ANSI X12 Transaction Set 850 Purchase Order

Invoice – EDI 810

Useful Reading: What is an ANSI ASC X12 EDI 810 Invoice?

Purchase Order Acknowledgment – EDI 855

Useful Reading: What is EDI 855 Purchase Order Acknowledgment?

Inventory Inquiry/Advice – EDI 846

Useful Reading: What is EDI 846 document?

Advanced Ship Notice (ASN)– EDI 856

Useful Reading: What is Advanced Ship Notice (ASN) 856 Transaction Set?

Below is an example of an EDI flow between trading partners.

Types of EDI (Electronic Data Interchange) Solutions

Currently, many EDI providers offer various EDI solutions. There is no one-size-fits-all EDI solution for every company. A company should evaluate which option will be most cost-effective for its business model. Thus, the main offers on the EDI market are:

Our company offers all three named EDI solutions. If you don’t know which solution is right for you, contact our experts for a free consultation.

EDI Document Business Flow

1. One business partner (generally the buyer) generates a document (i.e. Purchase Order) in his internal ERP system (i.e. SAP, Microsoft Dynamics, JD Edwards, etc.). Depending on the company’s business process, the document can be generated automatically or manually.

2. EDI providers can either pick up the generated document directly from the company’s ERP system, or they can transfer it to them.

3. The EDI provider converts the document into an X12 EDI transaction set. After conversion, suppliers receive an EDI X12 document.

What is the Fastest Way to Connect to EDI?

With EDI2XML and its “HTTP EDI Web Service (REST API)” model, companies can connect their EDI partners in less than one hour! EDI web services reduce the cost of EDI integration projects and improve efficiency and accuracy in a short amount of time.

As a result of using the EDI Web Service from EDI2XML, a company can quickly and efficiently exchange business documents with its business partner.

Learn more about EDI2XML Web Service its advantages and how it works.

Request EDI2XML Web Service Price List

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All You Need to Know About EDI 812 Credit/Debit Adjustment

Modern businesses are constantly striving to improve and automate their business processes, especially when it comes to supply chains. However, even the best-run supply chains can face situations where adjustments need to be made. If a problem arises with a purchase order, the trading partner uses EDI 812.

What is an EDI 812?

EDI 812, formally known as an EDI X12 812 Credit/Debit Adjustment Transaction Set, is an EDI document used by trading partners (buyer and seller) in B2B communication to indicate that adjustments have been made to a specific payment or to demand an adjustment or bill-back.

Using EDI 812 transaction, trading partners can reconcile payments with invoices and eliminate the need for paper credit or debit memos.

Who Uses The EDI 812 Debit/Credit Adjustment?

EDI 812 is used to automate B2B communications in all industries. This EDI document can be used by various companies such as:
  • Retailers/ grocers
  • suppliers of goods and services
  • manufacturers of goods
  • wholesalers
  • warehouses
  • 3 PL Logistics
  • transport companies (providing road, rail, sea (river) and air transportation) and many others.

When is The EDI 812 Document Used?

Trading partners use EDI 812 Credit/Debit Adjustment in various cases, the most common examples are:
  • The products that were ordered were not delivered.
  • There was a mistake in sending the products.
  • A defective, damaged, or spoiled item was received.
  • The manufacturer’s discount or retailer’s markup needs to be adjusted.
  • In the original purchase order or invoice, there was an error in the pricing.
  • There is an inconsistency in the quantity of goods delivered. For instance, when more or less goods are delivered than ordered.
  • Consumers are returning the goods to the retailer

What Information is Included in EDI 812 Debit/Credit Adjustment?

Generally, an EDI 812 document refers to a specific Purchase Order or Invoice and contains detailed information such as:
  • The number of the original PO or Invoice.
  • The total amount of the adjustment.
  • The items that are being adjusted.
  • Identification of the items.
  • Quantity of the items.
  • Credit, debit, or adjustment justification.
  • Debit/Credit Memo

EDI X12 812 Transaction Set Specification

EDI X12 812 Credit/Debit Adjustment Transaction Set is an electronic document used in the context of EDI where:

EDI – Electronic Data Interchange is a technology used to exchange commercial data between companies in a structured digital form based on regulated message formats and standards.

X12 – is a cross-industry standard for electronic exchange of business documents between business partners. In the United States, it is the most commonly used EDI standard.

812 – is a unique three-digit number to identify an EDI transaction. A three-digit code is assigned to each type of EDI document that is used in the X12 standard.

Transaction Set – is an electronic document that is the equivalent of a paper document.

The following is an example of the specification for the EDI 812 Transaction Set. The 812 contains mandatory and optional data, as with any other EDI document. Depending on the field of activity and the requirements of the trading partner, additional data may be required.

A typical structure for this document would be as follows:

EDI 812 Transaction Set Heading:
Segment IDNamePurpose:
ST Transaction Set HeaderIndicating the start of a transaction set and assigning a control number
BCD Beginning Credit/Debit AdjustmentProvide the receiver with the identifying date and number for the transaction set and the monetary value of the transaction
N9 Extended Reference InformationTransmit identifying information as specified by the Reference Identification Qualifier
PER Administrative Communications ContactIdentification of the individual or office to whom administrative communications should be addressed
SHD Shipment DetailTo specify shipment details, such as weight, quantity, and routing instructions regarding crediting or debiting returned products
N1 Party IdentificationIdentification of a party based on type of organization, name, and code

EDI 812 Transaction Set Detail:

Segment IDNamePurpose:
CDD Credit/Debit Adjustment DetailProvide information concerning a line item adjustment 
LIN Item IdentificationIdentifying basic information about an item 
PO4 Item Physical DetailsTo describe the physical characteristics, packaging, weights, and dimensions of an item 
N9 Extended Reference InformationTtransmit identifying information as specified by the Reference Identification Qualifier 
SE Transaction Set TrailerTo specify the end of a transaction set and report the number of segments transferred (including beginning (ST) and ending (SE) segments). SE represents the final segment of a transaction set. 

What Communication Protocol is Used to Send and Receive EDI 812?

At present, most companies that use EDI to communicate with their business partners do so over the Internet using FTP, sFTP, or AS2 communication protocols. For a variety of reasons, some companies may opt to use VAN, which is a more expensive solution.

Learn more about EDI communication protocols in the free EDI guide: Introduction to EDI Communication

EDI B2B Automation Through 812 Translation

The information transmitted by EDI 812 needs to be translated into a functional format for further processing or for integration into the company’s business system. Many companies use the Fully Managed EDI Services from EDI2XML. Through this service, EDI 812 information can be synchronized with an internal system, such as an ERP/CRM or accounting system, eliminating the need for manual data entry. In this way, the data received from trading partners via EDI is immediately pushed into the business system and can be processed quickly.

Learn more about the Fully Managed EDI Service

As an alternative to fully managed EDI, to transmit and translate an EDI 812 or any other EDI document, company can use low-cost and flexible EDI solution from EDI2XML – the HTTP EDI Web Service (REST API).

EDI2XML Web service is a web-based HTTP service that runs over the Internet and converts EDI messages into XML and XML messages into EDI (based on EDI2XML’s proprietary XML schema).

Learn more about this EDI service in the article: How to Become EDI Compliant in Under 60 Minutes (Yes, Really)

Benefits of Using the EDI 812 Credit /Debit Adjustment

Both the seller and the buyer benefit from EDI 812 credit/debit adjustment by automating the transaction process. Below are some of the advantages that can be realized by both trading partners:
  • Sending and receiving credits/debits can be done more quickly and with less effort
  • Gain operational efficiencies by reducing paperwork
  • Automated data entry reduces errors
  • Maintains documentation for deductions and credits

Conclusion: All You Need to Know About EDI 812 Credit/Debit Adjustment

For more information on how to implement EDI 812 in your company, contact us for a free consultation with one of our EDI experts.

You can also gain a lot of useful knowledge about business and e-commerce automation and integration of EDI, ERP, and CRM by exploring our Blog
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What is the Internet of Things (IoT): How It Works and Some Examples Use Cases

Previously, the Internet of Things was a complex to understand term and rarely being implemented. Currently, it is becoming very popular in the industrial and consumer world, and literally implemented everywhere, from private homes with robot vacuums to large manufacturing enterprises with huge systems of sensors, actuators, and devices. Every year, the demand for IoT technologies continues to grow very strongly.

What is IoT?

The Internet of Things (IoT) is a network of computers, sensors, and actuators that communicate through the Internet Protocol (IP). In other words, IoT is a network of physical objects communicating with each other over the Internet. PCs, tablets, and smartphones that are connected to the Internet are not considered IoT, although they may be part of an IoT solution.

Where, How, and Why is IoT Used?

The Internet of Things is used in various fields: from the well-known smart home, which controls “things” within the same network of a house, to the industrial Internet of Things (IIoT), which automates production machines and streamline business processes. The Internet of Things (IoT) can be used to solve global problems in various industries for example:

IoT in Manufacturing

The Internet of Things (IoT) makes it possible to improve production processes and receive information about the state of production in real-time. Using data taken from the equipment, the overall efficiency is determined – average load, uptime, and production efficiency, which helps preventing downtime and equipment breakdowns.

IoT in Agriculture

IoT improves product quality and boosts production in agriculture. By using sensors on drones and agricultural machinery, you can monitor soil changes and composition. These sensors can signal when the soil needs watering or fertilizing.

Animal collars with built-in sensors can track the location of the animal and collect health data.

Using IoT in greenhouses allows to maintain the desired temperature, lighting, humidity, and air circulation.

IoT in an Urban Environment

The use of traffic lights and cameras with IoT sensors and traffic detectors make it possible to manage traffic more effectively on the roads, and increase safety.

IoT in Healthcare

Diagnostics, rehabilitation, and disease prediction are all facilitated by the Internet of Things. You can use IoT devices to monitor blood sugar levels, set reminders for taking medications, and share the results with doctors.

IoT in the Electric Power Industry

The Internet of Things allows for a more efficient allocation of resources and monitoring of complex equipments. Using IoT wire sag sensors, you can remotely monitor the condition of power lines, which helps prevent power outages.

Latest IoT Technologies

According to the leading provider of market insights for the Internet of Things (IoT), AI, cloud, and Industry 4.0 – IoT Analytics, there are several best IoT technologies, (IoT software, IoT hardware, and IoT connectivity) that people working on IoT projects should keep an eye on.

Source: IoT Analytics Research April 2022

If we compare the results of a similar IoT study for 2019, we notice three IoT technologies that have developed most rapidly over the past three years.

1.      Wi-Fi 6

The Wi-Fi 6 standard refers to the next generation of Wi-Fi technology. Wi-Fi 6 doubles the channel width and creates a faster connection between a router and the connected devices. There are several improvements in WI-FI 6 that are designed to increase efficiency speed and reduce congestion in scenarios where heavy bandwidth usage occurs.  Sometimes Wi-Fi 6 is also called AX Wi-Fi or 802.11ax Wi-Fi.

2.      Graphics Processing Unit (GPU)

The graphics processing unit (GPU) is a specialized processor used to accelerate graphics rendering. The latest GPUs are very powerful at processing and displaying computer graphics. This is because they have parallel processing capabilities, they are much more efficient at processing graphics information than a typical CPU. Moreover, GPUs can perform multiple computations simultaneously. It’s a very effective way to distribute training processes and speed up machine learning. That is why GPUs are actively used to train AI deep learning for IoT applications.

3.      Intelligent Sensors

The Internet of Things is a major driver of sensor technology development.

Sensors are designed to solve the problems associated with the monitoring and control of technological processes for various peripheral devices and applications, especially in conveyor production.

Modern sensors can process information closer to the device and interact with the user interface or actuators.

Intelligent sensors allow efficient control of continuous conveyor production.

Industry 4.0 and IoT Technologies Benefits

The IoT technologies listed above are part of the concept of Industry 4.0. Industry 4.0 also named The Fourth Industrial Revolution (4IR) is a new phase of industrial development that focuses on interconnectivity, automation, machine learning, and real-time data.

Automation and the Internet of Things technologies provide the highest mobility, data transparency, and energy efficiency, they have had a significant positive impact on the manufacturing industry. The benefits include:

1. data collection, accumulation, and analysis from sensors, production equipment, and enterprise information systems to increase business transparency and receive full reports at any time.

2. Capacity to anticipate possible failures in the operation of equipment and minimize the consequences of emergencies.

3. Automation of food production processes using IoT technologies significantly reduces the costs associated with food spoilage.

4. Receiving immediate signals in force majeure and emergency situations.

5. Direct exchange of data between equipment and management and accounting systems, which eliminates the “human factor” and related errors and inaccuracies.

6. Simplify the business processes of production and achieve greater efficiency.

IoT: How Does It Work?

A typical IoT system includes devices with sensors, actuators, controllers, and processors, and is connected to a cloud platform via Wi-Fi, Bluetooth, or LAN.

The collected data is sent to the cloud for further analysis or analyzed locally. IoT applications can control connected devices, visualize data, and monitor equipment performance.

Additionally, IoT devices can exchange sensor data with each other and take further actions based on the information received.

In most cases, a well-established IoT system runs without human intervention.

In IoT systems, automation is provided by sending data to the device. Sensors and actuators in the IoT represent two endpoints of the system.

Main Elements of IoT Systems

Like any other technology, the Internet of Things has some main and vital elements. At the same time, the Internet of Things integrates a wide range of modern and complex technologies.

IoT Analytics

Analytics – all received data must be analyzed and visualized. The volume of continuously incoming data (such as from conveyor equipment) requires special IoT analytics platforms since such a volume of data cannot be handled by standard analytics tools.

IoT Cloud services

Providing services related to data storage, servers, databases, networks, and software. Cloud managed services consist of outsourcing IT/IoT infrastructure along with its support to a Cloud Service Provider.

The cloud service provider monitor, secure, and maintain the company’s cloud environment.

IoT BigData

BigData refers to structured and unstructured data of enormous volumes, which are typically stored in the cloud. Moreover, there are different tools, approaches, and methods for processing them to use them for specific purposes.

IoT Connection

Connection. For the IoT infrastructure to work, it is necessary to establish a connection between IoT devices so that the devices communicate. This includes both exchanging information with each other and transferring it to the cloud. There are different types of connectivity in IoT infrastructure, it could be:
  • cellular connectivity with a regular SIM card.
  • IoT eSIM with a capacity to switch profiles from MNO (mobile network operator) to (OTA) over-the-air.
  •  Satellite. Provides communication with IoT devices and applications via satellite networks.
  • Wi-Fi.
  • LPWAN (Low Power Wide Area Network) or its variation such LTE-M, NB-IoT, LoRa.
  • Bluetooth. With medium-to-low bandwidth, to exchange data across short distances.
  • RFID (radio frequency identification)
  • NFC. Near Field Communication allows the exchange of information between devices that are only a few centimeters apart.

IoT Sensors

Sensors – A sensor is a device that detects changes. Data can be gathered from various sources including temperature, motion, light, and pressure. Sensors play a major role in IoT technologies since they are the source of IoT data.

A huge number of sensors exist and for a specific task, for each IoT project, the right sensor must be chosen and configured.

The most used sensors in IoT technology are:
  • Temperature Sensors
  • Humidity Sensors
  • Pressure Sensors
  • Proximity Sensors
  • Level Sensors
  • Accelerometers
  • Gyroscope
  • Gas Sensors
  • Infrared Sensors
  • Optical Sensors

Conclusion: IoT – How it Works and Some Examples Use Cases

The Internet of Things is becoming more and more popular in various industries. It allows you to automate business processes as much as possible, increase the profitability of the enterprise, and reduce labor costs.

Interested in learning more about IoT technologies? Contact us for a free consultation with one of our experts.
IoT automation
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Why Automation of Inventory Management is Critical for E-commerce

The ability to quickly complete all e-commerce processes, from ordering to updating stock levels, is vital for any business that wants to make a profit and provide a high-quality customer experience, all of which cannot be achieved without process automation. Thus, automation of an online store is one of the main pre-requisites for operating a successful online business.

What Processes Should be Automated in an Online E-Commerce Store?

Almost all processes can be partially or completely automated in e-commerce. But first, let’s understand the concepts, what is automation in general?

AUTOMATION is a technology by which a process is carried out quickly, error-free, and with little or no human intervention.

E-COMMERCE AUTOMATION is a process that converts manual, repetitive, and labor-intensive tasks in an online store into automatic execution, that is, it performs tasks automatically instead of manually.

E-commerce automation and system integration is an “automatic program” unlike a human, does not get tired, does not make mistakes; it works efficiently and reliably around the clock.

So, back to the question: when it comes to automating processes in an online store, what should be automated first?

We recommend automating some of the labor-intensive tasks that are currently performed manually in your e-commerce store.

Inventory update is the first and most important stage of automating an online store.

Automation of inventory update will allow you to get accurate information about the availability of goods in stock and will avoid problematic situations with customers.

E-commerce Inventory Management

Adding and updating information about products in an online store is one of the most important and time-consuming tasks when done manually.

E-commerce online stores constantly need to receive information about stock balances from their own warehouses, either from suppliers’ warehouses or from drop shipper partners. There may be more than a dozen such partners. Most often, suppliers send information about stock balances in various formats, so you can receive many files in different formats that you have to work with daily.

Loading information about the availability of goods in the online store each time requires special data preparation. This process takes quite a long time.

That is why, first, it is necessary to automate the process of updating availability statuses in an online store.

Inventory management is an essential part of a successful e-commerce store, so automating product update is necessary and it is considered the initial task to be start with when automating an e-commerce business.

What is Inventory Management?

Inventory management in general is a complex process that includes tracking inventory levels (in the company’s warehouse or at a drop shipper’s partner), orders, sales, deliveries, replenishing stocks, storing, and forecasting inventory.

Inventory management in an e-commerce store, most often refers to the process of updating inventory levels and, accordingly, automatically hide the publication of products that are out of stock, and republish when these products are back in stock.

Why is Inventory Update Important in E-commerce?

Prompt updating of inventory is necessary so that online buyers do not place an order for goods that are out of stock. In such a case, the company has to make a refund or delay delivery, which negatively affects the company’s reputation and leads to financial losses.

By automating your inventory updates, you can save time, increase product visibility, achieve reliable and accurate inventory control, and provide your customers with the best possible service.

Benefits of Automated E-commerce Inventory Management

Improving the Quality of Customer Service

Customer experience largely depends not only on the product itself but primarily on service. Having the right products in your online store affects a positive customer experience. With automated inventory update, you can keep your website up to date.

This is especially important if you sell your products through different channels, such as Shopify, Magento, or BigCommerce online store and a marketplace like Amazon and eBay.

E-commerce Stock Availability

By automating inventory updates, you are practically offering a guarantee that the right product is in stock for your consumer.

The lack of goods in the online store due to wrong inventory management can have a big impact on the business. Missed sales opportunities, especially during the high sales season, can cause you to lose customers and profits.

According to research, when a customer doesn’t find the right product from you, 43% of consumers will go to another online store to buy the same product.

The Internet Retailer magazine found that more than 52 % of online shoppers abandon their entire shopping cart when one or more items they ordered are not in stock.

Automation of E-commerce Through Integration with ERP / CRM Systems

E-commerce automation involves the integration and synchronization of data between an e-commerce online store based on one of the platforms such as Shopify, WooCommerce, BigCommerce, Magento, etc., and an enterprise ERP/CRM system (for example, SAP, Oracle JDE, NetSuite, Microsoft Dynamics)…

Most often, companies synchronize e-commerce platforms with the following business systems:

  • Shopify, BigCommerce, Magento to Salesforce
  • Shopify, BigCommerce, Magento to NetSuite
  • Shopify, BigCommerce, Magento to Microsoft Dynamics
  • Shopify, BigCommerce, Magento to Oracle JDE

Automating E-commerce Through a Private or Public Application, Which One to Choose?

In order to automate the process in your e-commerce online store running on any platform Shopify, BigCommerce, WooCommerce, Magento, and so on you have to integrate your site with other third-party systems, thus you can subscribe to a private application, which is usually available on a monthly or yearly subscription basis.

Based on our proven expertise in e-commerce automation the best option is to use a reliable custom-made private application because the more your business grows, the more orders and more products you will have to keep track of. If you don’t have a reliable automated inventory management system, you can lose money and opportunities.

If you’re interested in learning more about using public and private applications in e-commerce integration and automation, check out this expert blog:

Shopify Private or Public app: What’s Best for ERP Integration

Conclusion: Streamline Your E-Commerce Business with EDI2XML

Process automation is a must for any e-commerce business. At some point, managing an e-commerce store becomes simply impossible without automating at least basic processes such as e-commerce inventory management and processing orders.

Would you like to learn more about automating your e-commerce, or see how one of the EDI2XML clients gets inventory data updates in near real-time? Contact us to schedule a call or demo with one of our integration experts.

Supporting Links:

Free, informative guides on e-commerce integration and EDI Communication

Fully Managed E-commerce Integration Service Pricing Plans

The Key Factor That Influences e-Commerce Website’s Revenue
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Amazon Seller Data Automation and Integration: Tips and Tricks

This post was updated to reflect current trends and information.

Today, I would like to address a few of the most important aspects of Amazon Seller integration and automation, and why companies selling on Amazon Marketplace have no choice other than adopting the path of “Automation and integration” to their internal software business systems (ERP / CRM), to stay competitive and profitable on Amazon.

Before I start addressing my points, let me start with some definitions for terms that are often used in this article, even though, I already detailed those definitions in previous articles.

What is Amazon Marketplace?

Amazon Marketplace is a Web-based platform owned by Amazon, where buyers and sellers can engage into commercial transactions.
Amazon Integration

Amazon offers access to Sellers and buyers globally, which is why there are different “Amazon Marketplaces”; Clients from different parts of the world can buy directly from that platform. Each marketplace refers to a region or country.

As an example, in North America, there are 3 Amazon Marketplaces:

1. Amazon.com: primarily to service the US market.

2. Amazon.ca: To service the Canadian market.

3. Amazon.mx: To service the Mexican market.

The same thing in Europe where you can find an Amazon Marketplace for the UK, another one for Germany, and so on…

Amazon Seller Account

Amazon allows any entity (being a person or an enterprise), to sell their products and services in Amazon one on multiple Amazon Marketplaces; in return for the service, Amazon bills a monthly subscription fee, in addition to some other fees paid per transaction, obviously depending on the subscription plan.

An entity or person who owns an Account on Amazon Marketplace to sell its products or services, is considered an “Amazon Seller”, or owns an “Amazon Seller Account”.

Amazon Vendor Central

In contrast to Amazon Seller Accounts, Amazon Vendor Central is the total opposite of the “Seller Account”. In this case, Amazon themselves buy from the Company, and they sell the products in Amazon Marketplaces.

Managing Amazon Seller Account

Managing a store for Amazon Seller Account – is the responsibility of the “Account owner” on Amazon (or the subscriber). It is the responsibility of the account owner, to feed the Amazon Store with the products catalog, pricing, specs, images… and all aspects of the store management.

Amazon Seller Account Inventory and Fulfillment

In terms of Inventory and fulfillment, there are few options offered by Amazon for shipping and fulfillment. I will expand on this topic in a separate article. But for now, let’s keep it simple; an Amazon Seller account owner has the option to manage the inventory and fulfillment of his Seller account, or pay amazon for such a service, under the FBA (Fulfilled by Amazon) program.

Useful Reading: What Is Amazon Integration & How Does It Work?

Integration with Amazon Seller Account

Amazon offers several ways to read and write data into a Seller Partner account. while all the offers are publicly documented, they require a certain level of expertise to implement, quickly and efficiently.

Amazon Options for Data Integration

In addition to the Amazon portal to manually manage the store, Amazon offers two options for an Amazon Seller Account owner, to build integrations and automation:

1. MWS (Marketplace Web Service): which is the first legacy integration door with the Amazon seller store.

2. SP-API (Seller Partner API): which is a new REST API service launched in September 2020 to replace the MWS.

Amazon MWS vs SP-API

In this paragraph, I will address some technical differences between both services.

Although MWS and SP-API of Amazon are both web services that enable programmatic access to seller data, there are major differences; following are some of those differences, extracted from Amazon website:
  • SP-API treats data as REST-compliant resources that can be accessed and modified via standard HTTP methods. At the opposite, Amazon MWS exposes data using operations that are very proprietary to Amazon MWS.
  • SP-API authorization leverages LWA and OAuth 2.0. This model eliminates the need for the manual exchange of auth tokens, as required by MWS.
  • The authorization process of Developers is much different between both; With Amazon MWS, sellers authorize developers. With SP-API, sellers authorize applications. This makes it safer for the Seller to Authorize an application of a developer, that was revised and approved by Amazon.
  • SP-API provides finer grain data access control than Amazon MWS. Developers can request access to only the data they need, and sellers can grant permissions at the API section, operation, or data resource level.
  • SP-API uses AWS Signature Version 4 for authentication. Amazon MWS uses Signature Version 2

To learn more about Amazon SP-API read our blog: Why You Should Migrate Amazon MWS to Amazon Selling API (SP-API)

Data Automation and Integration: Why Integration and Automation Are a Must

When operating eCommerce transactions on Amazon, and selling on multiple Marketplaces, companies find themselves in a situation where they cannot avoid such automation and integration with their own ERP or CRM, and this is for multiple reasons; I will list a few of the important ones:

1. Amazon is by far one of the biggest eCommerce platforms in the world, with the most items sold; Selling on Amazon, will certainly increase the sales of any company with the right product. This creates the first urgent reason automate and integrate the sales on Amazon Seller Account, into the Company’s ERP/CRM system. Companies would like to keep their books up to date, with less human interaction, and near real-time.

2. Companies who are successfully selling on more than one Amazon marketplace, see the need for automation faster. It is not an option for any company to manage multiple systems for orders and fulfillment.
e-commerce Integration


3. To compete in this tight eCommerce marketplace, faster fulfillment and shipping is expected from consumers. The fastest they get the goods the better it for the seller. To meet those fulfillment expectations, automation and integration should be in place.

4. The new reality created by COVID-19 disturbance of the economy worldwide, forced companies to adjust to the new reality if they want to stay the course, and remain competitive. Hiring more employees to produce the same result that can be achieved efficiently and quickly by machines is not an option today. Investing on automation and integration is the only way companies can achieve quick results and a quick measurable ROI.

“Do It Yourself” vs Outsourcing the Service?

Someone might say, well, cannot we do it ourselves? it is not that difficult, we have enough IT resources in-house, that can certainly handle such projects and get off the ground quickly.

My answer to this point is, of course, any company with sufficient time, resources and expertise can go into the project, and certainly deliver. However, there are some aspects of this approach should be highlighted and taken into consideration:

1. When doing it yourself, without enough internal resources, such projects can fall of the crack quickly.

2. At the technical level, although it seems straight forward to build such integration and automation projects, it requires lots of expertise and lots of learning. MWS is scheduled to be phased out by Amazon, we do not know when, and SP-API is taking over, but it is new, lots of security elements added and things can take time to learn and build.

3. Since a company is going to build it itself, it will be one and only one time to do the implementation; it does not pay off for this company, especially when it takes lots of time and effort.

4. Maintaining and managing the automation of Amazon Seller account data, at long term takes a lot of time and resources to keep it up and running; it certainly takes out of the staff’s internal efforts and would stretch them thin.

Useful Reading: EDI2XML integration for Amazon Seller Partners

The above points are the most important points and challenges I have noted from previous Amazon integration projects, where customers were frustrated and lost lots of time prior to decide to outsource their Amazon integration to our team at EDI2XML. Some of them they lost a valuable resources and money prior to seeing the light at the end of the tunnel.

Trust Our Experts For a Fully Managed Amazon Integration

To find out more about our Amazon integration expertise, and evaluate how we can help you, you can reach us by phone: (450) 681-3009 or use the form below to speak to our integration specialist!

The Following is a List of Additional Helpful Information:

What is Dropshipping on Amazon?

Amazon Business: How to increase B2B sales on Amazon?

Integration with Amazon Web Services (MWS): Things you should know

Integration with Amazon Seller or Vendor account: Things you should know

Free Amazon Integration Whitepaper