In the wake of Covid-19’s disruption, we’ve been hearing (and contributing to) a lot of conversations about the need for supply chains to be flexible. In fact, in last week’s post about the five lessons for supply chains in the wake of Covid-19 pandemic, lesson number one was “Stay Flexible”.
This week, we’re taking a deeper dive into what that means from an integration perspective—specifically how modern EDI and integration tools allow businesses like manufacturers and distributors to be agile.
The Potential (and Limitations) of Modern EDI
To be clear, we are not claiming that having current generation EDI, EAI, and MFT capabilities will cause new customers or opportunities to materialize out of thin air in what’s likely to be a challenging second half to 2020.
At the same time—having those capabilities will make it easier for your company to pivot swiftly and respond to the opportunities that present themselves. Especially when you layer in the ability to consume APIs.
For example, as the coronavirus began to spread across the globe, a major challenge for organizations with links to global trading partners in their supply chains was a lack of alternate suppliers when pandemic containment measures closed factories and ports in China and elsewhere.
A Blended Strategy
One Remedi client was able to transition from relying on bricks and mortar retail distribution to selling on Amazon, eBay, and Wal-Mart by adding the ability to consume APIs within their IBM Sterling B2B Integrator environment leveraging an already built integration pipeline to their ERP and fulfillment systems.
Having an agile and scalable integration platform provided business processes, web services, and protocols that allowed our client to pivot to online marketplaces in a matter of a few weeks. So instead of being dead in the water, they saw modest growth while similar companies saw steep declines.
For this client use case, it wasn’t a matter of replacing EDI with APIs but rather recognizing the role each technology plays in their business ecosystem. For example, due to its standardized format, EDI continues to anchor their supply and demand chain transactions and communications.
While it’s true that new trading partners may have unique EDI requirements that can add complexity to onboarding, the ability to choose from a range of proven standards that include ANSI ASC X12, UN/EDIFACT and ODETTE when deploying EDI solutions allows organizations the flexibility to transact with domestic and global supply chain partners and customers.
APIs on the other hand bring more communication flexibility than standard exchanges like EDI, in addition to their real-time connectivity advantages as noted above. As both EDI and APIs transfer data from one system to another, clients who are new to APIs as an integration tool are often puzzled about which one to use.
The simplest answer is that you’ll likely need to support both mechanisms on a single integration platform if your business intends to rebound quickly from the most recent downturn and be agile enough to weather the next one. Which is why healthcare networks and hospitals found themselves unable to procure adequate supplies of personal protective equipment (PPE) just as patients with Covid-19 symptoms began to show up in ERs and waiting rooms.
Once companies found other suppliers to meet demand, or in the case of seller transitioned to new and even non-traditional customers, many had difficulty electronically exchanging the business documents like purchase orders, invoices, and advance shipping notices necessary to keep goods and revenue flowing through their supply chains.
In ordinary times, delays stemming from the usual onboarding back and forth might be acceptable. During the pandemic, however, intense competition for available inventory put organizations with less advanced integration capabilities at a disadvantage. Likewise, distributors and manufacturers with no supply issues were faced with customers who were shut down. The question for them was how to adjust to decreasing demand and avoid getting stuck with excess inventory.
Traditional B2B technologies such as EDI and MFT provide seamless document exchange between entities. At the same time, EDI relies on batch processing. New business channels such as today’s online marketplaces require real-time integration capabilities from trading partners to manage inventory, shipping, and payment processes at the speed of online commerce.