Last week, we shared with subscribers a fuller discussion around one of the five enduring lessons for the future of supply chain management post Covid-19 in Time To Fix What’s Broken. Where the previous installment in our series explored the pain and risks of relying on last century’s EDI and integration tools, this post will explain strategies and tools built for commerce in a century marked by sudden, sweeping disruption and changing demand patterns that demand agility and speed from companies who want to remain relevant.If you haven’t already, you can read the kickoff article here.
The Rules Have Changed
Ever since the first version of NAFTA and the advent of “Just In Time” inventory management, manufacturers and distributors have operated according to the gospel of buy from the lowest-cost supplier and keep inventory levels low. Going forward, neither may be the wisest strategy as we learned from the chaos and fallout stemming from the extended closure of offshore factories and ports.
Furthermore, while you’re re-thinking everything on the supply chain side of your business, customers may be putting you under a similar microscope. At minimum, you want to be easy to do business with. Even if you’re on firm ground with existing customers, growth going forward means being able to meet the requirements of new customers, quickly onboard new trading partners, and connect with new channels.
The challenge for many manufacturers in a recovering economy, especially for those in the CPG and the food and beverage industries, is how to modernize their integration suites without breaking the bank.
It’s A Brave New Omni-Channel World
Even before the pandemic, consumers were shifting their shopping online as Amazon Prime with free shipping on everything from triple-A batteries to hiking boots made buying these items online more convenient and often cheaper.
When Covid-19 hit and set off panic buying, brands that were already selling online had a built-in advantage when frustrated customers discovered they could buy the things they needed on Amazon, Wal-Mart.com and eBay. Companies without an online presence scrambled to reset while their sales tanked as the weeks of life under lockdown turned into months. On the other hand, some companies managed to quickly pivot and in fact, saw sales increase.
These companies (including a Remedi client) took advantage of APIs, the tool that’s building the economy of an increasingly omni-channel world.
APIs and EDI: Do You Have To Choose One Over The Other?
As life returns to normal—or new normal if you like— online buying and the stream of doorstep deliveries that have become so ingrained in the daily lives of consumers are not going away. In fact, we’re seeing a structural change in consumer behavior is radically and swiftly transforming the retail selling landscape.
As a result, the shift away from bricks and mortar retail to online marketplaces is forcing IT departments to rewrite the business rules that make it possible for the companies they work for to execute their competitive strategies.
Bottom line, the organizations who aren’t built to serve customers through online channels likely won’t be around when the next crisis hits. Also, B2B customers—having experienced the convenience, immediacy, and ease of online shopping while working from home under lockdown— are going to expect a similar customer experience in their B2B relationships.
The good news for companies who are using EDI to exchange business data is they don’t have to abandon the technology in favor of APIs to acquire the agility that e-commerce in the 21st Century requires. EDI continues to anchor supply chains because of its ability to process large volumes of disparate business documents and standards-based formats efficiently and safely. APIs, on the other hand, bring real-time connectivity and more communication flexibility than EDI.
The easiest way to leverage the best of what each has to offer and deliver the experience consumers expect is to build the API layer on top of your existing EDI infrastructure. In practice, this allows the data sent via API by a partner to be converted into EDI and exchanged with the other parts of your business such as finance or shipping.
The Only Constant Is Change
To help non-IT colleagues and financial decision makers get their heads around the key elements in your current environment as well as the deficiencies that may be limiting your ability to pivot to and connect with new trading partners and selling channels, start with our free B2B Integration and Architecture Documentation Template.
By the way, if you’re hesitant about the number of gaps that may come to light in the analysis of your environment, don’t be. If you’d like assistance from folks that do this on a regular basis, ask about our integration health checks and audit assessments.
Modernizing your integration architecture doesn’t mean replacing EDI with APIs. In truth the two technologies complement each other and offer the potential to leverage the investment in and amplify the value of existing infrastructure.