Those Nasty and Evil EDI Testing Fees A Halloween Special Edition
Suppliers and most EDI providers hate them. They love to vent their frustrations on bulletin boards and blogs (reply with your thoughts). Bottom line: testing fees add value to the buyer and the entire supply chain if the buyer, seller, and EDI testing outsourcer employs best practices in executing an on-boarding event. Now for the readers who know me, you are either laughing or just in disbelief. But let me explain how testing services and fees should work and even give an example of how best practices are being employed at one of the largest retailers in North America. Many suppliers have had a bad experience. The service was bad, the support was bad, the entire process fruitless and for usually around a grand or two per retail customer. Talk about adding extra work and cost to a supply chain. A thousand dollars pays for a lot of paper purchase orders. Where is the efficiency and cost reduction gained? Many times the professionally skilled EDI seller is dealing with a EDI provider with an inexperienced staff and bad data. Talk about frustrating. It's no wonder that so many Directors and VPs of Supply Chain have suffered that black mark on their career. Previous to the testing kick-off many of these Directors and VPs repeated the sales pitch back to me, "a couple thousand dollars is a nominal fee that our suppliers have no problem paying [suppliers expect paying these types of fees to their customers]." Perhaps they should have had a Kaizen circle discussion on it. There is a way to implement EDI testing fees and service that does add value and limit cost to the supply chain. For the buyer it makes sense. they get suppliers on-boarded with the latest processes and transaction sets with added support services paid for by the supplier. For the seller it does not make sense. added work and unexpected and non-calculated cost added to the supply chain. And if the testing in not effective; worse. Many suppliers end up paying the buyers selected third party more in testing fees than the annual EDI service that handles their transactions. And sometimes the supplier is more capable then the buyer which adds insult to injury. As testing fees become more common place with big retail buyers, times the testing cost and overhead resource cost by every customer. Now figure the margin per item. How many extra items need to be sold to cover the cost? Five fundamental best practice steps for a buyer to take in implementing an EDI testing and on-boarding rollout: (1) survey the supplier base on capabilities, (2) communicate the process and manage in waves. (3) Notify and enable the EDI providers first and allow them to support their client/your suppliers. Many providers offer a common platform with validation rules that apply to groups of suppliers. (4) Lastly implement a deadline for the remaining and/or preferred EDI capable supplier for testing. (5) Everyone else goes through the testing process. There is one major retailer who has employed and is currently executing these best practices with their supplier base. I'll leave it to that particular retailer if they wish to share their results in the comments below. What suppliers can do to avoid paying EDI testing fees: Be more pervasive than your customer on EDI. Request an EDI connection from the customer before they charge you a couple grand for the privilege. Even if a supplier only gets ONE purchase order a year, many times if they are using an outsourced provider, it is just a matter of the buyer flipping a switch. Do more than just rant on a blog. Show your support below use this to petition a buyer looking to implement EDI testing fees. Rob G. Posted on: http://gtbp.org [Non-text portions of this message have been removed] ------------------------------------ ... Please use the following Message Identifiers as your subject prefix: <SALES>, <JOBS>, <LIST>, <TECH>, <MISC>, <EVENT>, <OFF-TOPIC> Job postings are welcome, but for job postings or requests for work: <JOBS> IS REQUIRED in the subject line as a prefix.Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/EDI-L/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/EDI-L/join (Yahoo! ID required) <*> To change settings via email: [email protected] [email protected] <*> To unsubscribe from this group, send an email to: [email protected] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
