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Why Do Successful Retail Chains Use EDI Extensively?

The difficulty of traditional channel brick&mortars to respond to the diversifying needs of today's people, has led to the emergence of a modern and new channel, which we call chain markets.

Initially, retailers with a high variety of products and therefore growing in large formats over time, became direct competitors to traditional grocery stores in small formats within the city, with products often specific to their region.

These developments have increased the number of suppliers along with the number of products. The increasing number of products and suppliers have increased the importance of order and inventory management.

Operating the supply chain process, error-free, fast and making it traceable, has become one of the sine qua non of high sales and profitability.

EDI systems, which came into play at this point, allowed retailers to manage the entire procurement process by cooperating with their suppliers.

Furthermore, it also guided retailers to track the supplier performance, to guide them or to find the most suitable suppliers when necessary.

Retailers using EDI systems effectively;

1. By sending their Orders via EDI, they make sure that their orders reach their suppliers in a complete, error-free and timely manner.

2. They are informed about how much of the orders they send from their suppliers will be met, with the Order Confirmation document, before the products arrive in their warehouses. They can quickly order new products for missing products. In this way, they do not lose sales.

3. Retailers, who have received the Despatch Advice information regarding the products shipped from their suppliers via EDI in advance, can make the warehouse preparations according to the upcoming products, and could operate a planning and a reservation process.

4. Warehouse/store managements, which have knowledge of the details of the products shipped with the EDI Despatch Advice prepared, can complete the goods acceptance process in a short time with hand terminals. They can share the Receiving Advice document for the products they accept with their suppliers.

5. They can prepare an error-free Invoice by using the price information in the Order and the quantity information in the Receiving Advice.

6. With the EDI Sales Report, they can track the products that are sold on a store basis on the relevant day.

7. Similarly, with the EDI Inventory Report, they can follow up daily the products that are moving on the relevant day, that is, they are shelved from the store's warehouse.

8. Thanks to the automatic progress of this whole process through EDI, suppliers,

a. Using the order information, they received;

i. They can follow the fulfilment rates and update their production or import plans accordingly.

ii. They can see the breakdowns on a store or warehouse basis and follow the increasing/decreasing product sales on a point basis.

iii. They can make their new campaign planning according to this data. In this way, the Retailer earns together with its business partners.

b. They may prepare their invoices according to the quantity accepted by the Retailer, not the quantity of products ordered or shipped. In this way, they do not waste time with the difference invoice processes.

c. They can support the retailer's purchasing unit by tracking their products on a point basis with Stock and Sales reports. They can minimize sales losses caused by missing stock or improper shelf management.

9. All these automation efforts make it easier for the Retailer to switch to VMI (Vendor Managed Inventory) common stock management with its preferred suppliers.


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