How onerous and demanding is the exchange of documents and information with suppliers?
Does your company still manually insert invoices, order confirmations, delivery notes from your suppliers? And does it also manually send orders and order changes? If the answers is yes, probably these are the results: delays or errors caused by manual data entry, slowdowns when receiving goods, too many resources used for low value-added activities.
In this article we will investigate the supplier integration or order-to-payment cycle topic: that is, how you could optimize and automate information exchange with suppliers. We will analyze the advantages and which are the aspects to be considered when assessing a supplier integration solution.
Why should my company integrate suppliers with an automatic system?
When talking about integrating document flows, usually people think about customers integration. Why don’t we think also about suppliers integration? In the context of processes optimization, if it is important to share information safely, accurately and on time with customers, it is the same towards suppliers.
Suppliers could be big or small, local or foreign companies: usually every company uses its own channel and format to exchange data. By integrating suppliers through an automated system it is possible to eliminate paper processes and receive data from all suppliers in a standard format.
The process will be automated and data of any format and type will be standardized in a single format, readable by the company ERP system.
A measurable process
Is it convenient for any company to integrate the order-to-payment cycle? Is it possible to estimate in advance costs, time line and ROI?
Suppliers integration is a measurable process, already in the planning phase.
By analyzing the suppliers type and quantity and the amount of exchanged documents, it will be clear already from a first analysis if the supplier integration process is actually convenient and when it will be possible to reach the break-even point.
Optimizing the exchange of invoices and delivery notes
As we said, when integrating suppliers through an electronic data interchange system, it is possible to standardize the receipt of both administrative and logistical data and documents. Here is how this could work.
We could take as an example the receipt of invoices from suppliers. Thanks to the automated system, all data contained in the invoices are directly acknowledged and registered inside the ERP system: without any checks or manual processes.
If we think about the logistical part, thanks to the document called DESADV – despatch advice or delivery note, the warehouse is automatically populated: manual activities of the operators are eliminated. They don’t have to check the amount and type of goods on arriving trucks and then insert them inside the IT system.
The advantages of suppliers integration
Characteristics of a supplier integration solution
So, which are the important aspects to consider when searching for and implementing a supplier integration solution?
It is important that the solution is flexible, i.e.:
- it could be integrated with any type of ERP system, without limitation. Also if the ERP system should be updated or changed in the future, the supplier integration solution shouldn’t be an obstacle. (For further info: an example where the ERP system changed, while maintaining the electronic data interchange solution)
- it could integrate any type of supplier: both if the supplier is a big structured company, or if it is a small company still using manual processes
- it could manage any type of format and transmission channel: it must not require a specific format and must support any kind of transmission channel
- it should manage transmissions both with customers and suppliers with a unique tool.
DERWID’s Business Integration solution meets all the needs mentioned above. It is indeed possible to integrate documents flows with suppliers with 3 different channels.
- Classical EDI: suitable for partners exchanging a big amount of data.
- WebEDI/suppliers portal: suitable for a small amount of documents. This solution allows to automatically manage many information, not only the classical documents exchanged via EDI: for example, it is possible to handle returns for deteriorated goods or anomalies through the portal, without picking up the phone or exchanging emails.
- Mapping tool (PDF reading): this last option allows to automatically insert inside the ERP system the information contained in a native .pdf document.
According to the number, size and characteristics of your suppliers, as well as the frequency and mode of data exchange, we will offer you the most suitable solution. All 3 solutions could be adopted at the same time, allowing you to integrate more suppliers.
Today the digitization process is not an option anymore. We could no more ask ourselves if we should or should not implement a digitization process, included suppliers integration: the right question is “when?”.
Do you need further information about suppliers integration in your company or to ask for a specific advice? Contact us.
Download the complete infographic about how to choose an automatic supplier integration solution!