The Retail Industry
While the retail sector has been at the forefront of EDI adoption for more than 30 years and has replaced many paper-based processes with electronic documents, there is still a great deal of potential for EDI to deliver even more value.
The retail sector has enjoyed the benefits of EDI for decades. Yet, many companies still use some form of paper-based processes within their order, invoice and dispatch advices. This shows that there is still a great deal of potential for EDI to deliver more to the retail industry, a fact that has not escaped the attention of many retail business managers who see EDI as pivotal to creating competitive value for their organizations.
Pioneered by the likes of Walmart and Proctor & Gamble in the 1980s, vendor managed inventory (VMI) has become a driving force for the industry to cut costs while increasing customer service. It is the concept at the core of the grocery industry’s “quick response” approach to product flow across the supply chain.
In VMI, the supplier makes the main inventory replenishment decisions for the consuming organization. The result is that the supplier has much greater control of inventory, leading to less waste or over-supply and the replenishment cycle often moves from monthly to weekly or daily, increasing customer service. This, of course, is especially important for promotions where increased demand puts more strain on the supplier’s ability to restock.
Other key roles for EDI in retail are in the streamlining of direct store delivery (DSD) procedures and the drive towards global data synchronization (GDS). From Forrester’s research survey of more than 20 vendor companies, the results showed that 41% of organizations use an EDI message format, sending over 20 billion messages every year.
