Slash Receiving Time & Chargebacks With EDI
March 2013 Integrated Solutions For Retailers
By Matt Pillar, editor in chief
Outsourcing electronic data interchange (EDI) enabled specialty retailer Retail Concepts to reduce shipment receipt activity from hours to minutes and minimize vendor chargebacks.
Houston-based Retail Concepts is the parent company of Sun & Ski Sports, an outdoor outfitter with 25 locations across the nation. Retail Concepts also owns and operates five other retail stores, including Patio Place and Ski Stop.
As Retail Concepts grew its sales, store counts, and brands, the number of suppliers it dealt with mushroomed in corollary fashion. Throughout that growth, the company was aware that the increasingly frenetic pace of warehouse activity and resulting management effort was leading to the need for a comprehensive approach to electronic data interchange (EDI). Heading into 2010, company executives knew something had to be done. The company’s first inclination was to tackle the project in-house; it had a programmer on staff who had a smattering of EDI experience. When that programmer suggested a meeting with EDI solutions provider DiCentral — just for conversation’s sake, mind you — Retail Concepts’ VP of IT Shelly Nixon agreed to entertain the idea. “To sum it up, DiCentral came in, did a presentation, and changed our minds. They sold us on outsourcing the effort,” she says. “It was a matter of ROI. We realized it would come more quickly and be stronger if we put it on a third party to make it happen, as opposed to struggling through it ourselves.”
Change Management: Behind-The-Scenes Work Lays Foundation For EDI
The next several months were spent in the trenches, with on-site support from DiCentral helping the EDI team at Retail Concepts, first effectively define the specific EDI documents required to more effectively communicate with their vendor community, then develop the specifications and mapping for the EDI X12 documents that would be sent to and from the supplier community within the Retail Concepts ERP (enterprise resource planning) system. Additionally, DiCentral set up a compliance-testing platform to perform document testing for those vendors that had in-house EDI capabilities or those using other third-party services.
Soon, it was time to communicate the initiative to Retail Concepts’ vendor community. The retailer and DiCentral worked together on that effort, informing the supplier community that new processes were being implemented and compliance testing would soon follow. Many of the vendors the retailer does business with were already familiar with DiCentral and had experienced the benefits of EDI firsthand.
Others balked, requiring some coaxing and hand-holding through the process. “EDI vendor testing was one area where we felt absolutely confident in our decision to outsource,” says Nixon. “I can’t imagine any retailer who really has the manpower to handle that. It’s very tedious, very time-consuming, and takes a lot of effort. You need to dedicate a team of people to it, and we couldn’t have done that part without DiCentral.”
Assessing The Impact Of EDI
All transactions to and from Retail Concepts and its vendor community now move through DiCentral’s communications environment and are tested for accuracy, tracked, and reported to the retailer. While some might assume that adding a management/control layer to vendor communication might have negative repercussions on efficiency, Retail Concepts experienced the opposite. “After the implementation, thanks in large part to the advance ship notice (ASN) requirements in the new system, shipments that would have taken four to six hours to receive were being completed in 30 minutes,” says Nixon. She also says vendor chargebacks have decreased dramatically with EDI due to the improved accuracy of orders, and that EDI is enabling more efficient direct store delivery (DSD) activity among its vendors.
For More Information On DiCentral Go To www.dicentral.com