With the advancement of online and catalog sales, drop shipping is fast becoming the preferred order fulfillment approach among a growing number of online retailers. It is basically a chain supply method in which the retailers do not keep the inventory with themselves, rather they transfer the order and shipment details to the manufacturers or other retailers or whole seller, which then deliver the goods directly to the customers. This method has considerably improved the overall supply chain efficiency since only it involves one supplier picking, packing, and shipping the product.
But handling an EDI drop-shipping supply chain can be daunting task. There should be emphasis on maintaining visibility into inventory levels, which further allows the shoppers to get real-time availability information about the item(s) they wish to purchase. Incorrect inventory data or unavailability of the same can negatively impact the customer’s purchasing experience and affect the consumer loyalty. There are some other issues, that can cause damage to the customer’s buying experience and satisfaction, include inaccurate exchange of transaction details, order status updates, poorly branded packaging slips.
Here are four ways that can help standardize EDI Drop Shipping:
- To streamline and automate vendor’s inventory levels visibility, EDI capable trading partners will collaborate with the drop-ship vendors using a unified platform to ensure on time and accurate order delivery. They will generally exchange the inventory inquiry document, which allows the vendor or supplier to notify the trading partners of on-hand inventory. The frequency of this exchange varies according to the season. This document is exchanged a number of times per day during the holiday season.
- Apart from the two primary transaction documents – Purchase Order and Invoice – another critical EDI document that is commonly requested by the retailers for drop shipping arrangements is the Purchase Order Acknowledge. The document is sent to the consumer to confirm that the seller has or will ship the merchandise in due course of time.
- For orders that include custom products or longer lead times, some retailers might look for the Order Status Report, which provides details for the order fulfillment.
- While conducting shipment of the order, the vendor will send the Advanced Ship Notice, which provides the tracking numbers and other shipment information. Using this information, retailers strive to streamline the online order status and send email notification to their customers.
Most online retailers require the packing slip which another critical non-EDI document. For their convenience,they usually standardize the packing slip, which make it difficult for suppliers. An integrated EDI solutions saves the suppliers from taking the trouble to manually log-in to each trading partner portal to print the packing slip.
EDI can streamline order management across the whole electronic retail universe, especially when EDI drop-shipping is seamlessly combined with an existing EDI capabilities. With appropriate EDI solutions, a third party vendor or manufacturer can ship direct to the customer with the same level of customer service and fulfillment efficiency as if the seller had the inventory in its own warehouse. Considering all these benefits, EDI Drop-shipping can prove to be a strategic investment for many such companies.