Q: As a supplier to a very large retailer we are being required to trade electronically. What are my options?

A: Small suppliers have several choices in this scenario.

1. Use a service bureau, for example SPS Commerce.
2. Buy your own EDI software and maintain it.
3. See if your customer has a web-based eCommerce system. If you choose any of these options, you should consider integrating your business applications with the eCommerce system to eliminate errors, reduce time and cost.

Q: Our manufacturing facility supplies bolts to a larger manufacturer. We are being asked to be a part of demand\pull manufacturing. What steps should we take?

A: First, in a demand\pull manufacturing environment the technology priorities shift from planning and sequencing under the older push-driven method, to event management, supply chain optimization, and customer management under demand/pull.

An April column in Manufacturing Systems by Roddy Martin listed several characteristics of the demand\pull system that suppliers should implement; they are:

• Real-time demand and supply visibility among all trading partners, which calls for the bidirectional exchange of cross-functional information; In other words, each trading partner should be able to see via the web the rate of inventory being consumed at the retail level and the amount of inventory that is Capable to Promise on the supplier level.
• Collaborative supply/demand-chain planning among trading partners on both the buy and sell side;
• The ability to execute against plans and quickly respond to all changes to supply/demand conditions. For example, manufacturing operations will need to build "same-day planning" capabilities; and
• The use of inter- and intra-enterprise key performance indicators to track the performance of internal operations and trading partners, and enable more effective decision-making. For example, Enterprise Performance Management initiatives link cross-functional data with enterprise metrics and measures.

Read the full article: The World Class Supply Chain

Q: Once I meet my trading partner’s requirements for electronic trading, I still need to re-key the data like invoices, shipments, and inventory. Where’s the benefit to me?

A: Well part of the benefit is you get to keep your large customer. But you are right, just meeting the requirement for electronic trading in many ways may increase your work.

That’s why small manufacturers should take the next step toward integrating their business applications such as Quick Books, ALCIE, Solomon, or Peachtree with their eCommerce capabilities. Then suppliers will gain the same reduced costs and automated processes as their large customers.

Q: How can I justify the cost for high priced consultants when I only send 10 documents per week electronically?

A: There is a paper napkin formula. It takes a person 5 minutes to enter a typical purchase order with an average of 30 fields of data entry. At an error rate of 1 percent, that’s nearly 5 wrong purchase orders per week. This is in addition to the total cost of salary and benefits of that employee.

This is not just an issue of less labor. It is an issue of the proper place for labor to be used in your operation. If something can be automated for cost and quality reasons, then businesses should consider the alternatives.