Multi-channel inventory management has become a commonly heard term in business. But what is it, and how can it help your business? Simply put, multi-channel inventory management--also sometimes referred to as multi-source or cross-channel inventory management--is the process by which companies keep track of orders coming from various sales sources and locations, including e-commerce stores, wholesale avenues and retailers.
Despite its inherent complexity, having multichannel inventory has become a necessity for businesses hoping to succeed in the current marketplace. Luckily, it can be ably handled with the implementation of an electronic data interchange (EDI) package.
In the sections that follow, we detail the many benefits of using EDI to manage multichannel inventory.
What Are EDI Solutions?
EDI solutions can be a game changer for a seller trying to juggle the numerous painstaking, detailed tasks involved in the retail business. It's best to think of EDI as its own digital language, a method of communication that allows you to quickly and easily exchange documents with your trading partners. Because EDI solutions are scalable, they can grow with you--so no matter how many partners you have at any given time, EDI will handle your documentation transmission needs.
EDI solutions are used every day to automate many of the otherwise time-consuming tasks involved in business: purchase order writing, manufacturer communication, new-partner onboarding and more.
Why Use Multi-Channel EDI?
There are many excellent reasons to use EDI technology for multichannel inventory management. Replacing paper-based communication methods with the faster, more accurate EDI standardizes the transaction format across the supply chain. This enables all players--retailers, manufacturers, logistics organizations and others-- to better, more seamlessly collaborate, increasing efficiencies across the board.
Benefits of EDI in Multi-Channel Inventory Management
The main benefits of using EDI technology in cross-channel inventory management are as follows:
Benefit #1: Save time and money
Among the most popular boons to using an EDI solution to handle inventory across channels in the long term are the savings it can bring, both in work hours and in costs. One of the chief reasons for this is the lack of paper involved in the new processes. Paper costs add up quickly, and the more a business grows, the more paper it tends to use. What's more, keeping paper files means you need storage space; and that's another high, recurring cost. Because EDI solutions are paperless, they let you put a stop to this spending.
And when it comes to time, EDI technology can give you back quite a lot of it. Much of these savings come from the automation of tasks you might previously have done by hand. With EDI, no longer will every order form need to be processed by a human being. Nor will individual phone calls need to be made to clarify or correct shipping details. These tasks and many more are easily and quickly done using EDI technology so you can keep your staff engaged on the other, higher-level work they truly enjoy.
In addition, using EDI saves time and money often associated with time-zone differences. With inventory spread out across the globe, a company can find itself dealing with a variety of business hours and schedules, and losing money while it waits for documentation to arrive and staff to be available to receive it. EDI solutions' near-instantaneous documentation transmission means you can eliminate the delays that frequently come with working internationally.
Benefit #2: Speed up processes
EDI for cross-channel inventory management speeds up all the processes along the supply chain. By enabling real-time communication, awaiting replies from partners becomes a thing of the past. Incoming orders are created automatically, moving them to the fulfillment stage without staff involvement and the lag time it can create.
An EDI solution automatically picks up incoming documentation from your email inbox or File Transfer Protocol (FTP) server, then sends them to the correct destination, streamlining operations at that point and on down the line. Ultimately, with EDI all processes will take significantly less time than they did before, leading to shorter buy-sell cycles and lead times.
Benefit #3: Improve the customer experience
Your customers are the heart of your company, and they are your best source for increased business. Making their journey with you as pleasant as possible will pay dividends.
Following the global COVID-19 pandemic, during which shipping times were considerably lengthened and consumers were routinely faced with product shortages, speed and availability of goods is of the utmost importance to customers. In fact, in a 2021 survey from Digital Commerce 360/Bizrate Insights, 68% of consumer respondents said the promise of fast shipping would lead them to place an order with a particular retailer.
Make customers even more likely to order from you when you use EDI solutions. EDI streamlines the ordering process, improves order accuracy and bolsters transparency, which allows for better and easier communication between you and your customers. When that communication includes accurate, frequent updates on the status and location of their orders, you can expect to see high levels of customer satisfaction and loyalty, as well as increased word-of-mouth recommendations to purchase from your business.
Benefit #4: Reduce errors
Using manual processes to fulfill orders is not just time-consuming and expensive up-front, it's also prone to error, and thus costly on the back end, too. EDI technology replaces the work of a human being in many tasks, making it many times more accurate.
Knowing they can rely on the veracity of the information being exchanged boosts partners' confidence in you and your business. Customer confidence is boosted, too, when there are no more errors involving pricing, shipping times or order status.
In addition, when you reduce errors you slash the amount of time taken to correct mistakes, further lowering your costs and upping your efficiency.
Benefit #5: Bolster security
Employing EDI solutions makes your operations more secure, too. Because they're set up to be accessible only to authorized users and come equipped with archives and audit trails, EDI solutions allow you to track use and ensure the security of your system. EDI technology also gives you electronic confirmations of transactions, increasing transparency among all trading partners. And transparency is a cornerstone of security assurance.
Conclusion
Using a top-of-the-line EDI technology solution for your multichannel inventory management needs will save you time, money, operations headaches and more. With smart automation that takes manual work off your and your employees' plates, EDI will help you see more accurate orders, increased transparency with partners across the supply chain and a better customer experience--which will lead to more business.
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