Watch the Orders Roll in with an EDI Integration into your NetSuite Platform

How an EDI integration into your NetSuite system can streamline your business processes and give you a scalable solution to support your growth

The world as we know it today is a 24/7 world. It never sleeps. As consumers, we have the option to go online and purchase anything at any time - day or night. The years of pandemic solidified that behavior, which was already a trend. Naturally, a 24/7 consumer world requires a 24/7 business environment world. To comply with requirements from major retailers such as Amazon and Walmart, small and medium size companies supporting their inventory needs increasingly have to establish presence and connect through an Electronic Data Interchange (EDI). But what starts as a matter of compliance in order to do business, becomes a strategic investment in future growth and returns.

What is EDI?

Electronic Data Interchange (EDI) is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders, advance ship notices, and invoices. (Source: Wikipedia). EDI is the computer-to-computer exchange of business documents in a standard electronic format between business partners. By moving from a paper-based exchange of business documents to one that is electronic, businesses enjoy major benefits such as reduced cost, increased speed, reduced errors, and improved relationships with business partners. (Source: EDIbasics.com).

The concept of EDI is not new. The technology has been around since the 70s and the benefits of this type of information exchange have been enjoyed by companies for decades. However, the drive for constantly increasing speed and efficiency when doing business has in recent years created the need for companies to integrate EDI with their EPR system, such as NetSuite. With that the world of exchanging business documents between two trading partners adds a whole new dimension - being able to connect and automate the entire business process chain of handling an order – from receiving the order, to acknowledging it, to shipping and invoicing it

How an EDI Integration works

To put it simply, an EDI integration can take a business running on Excel spreadsheets and a ton of daily manual effort and super charge its power by completely automating the order and fulfillment (more on that later) process. EDI integration aside, thinking about what the full cycle involves, some or all of the following operations might be part of it: initial receipt of the order from the end consumer, issuing/receipt of the purchase order from the trading partner, acknowledgment of the purchase order, creating the order in the ERP system, sending an advanced shipment notice, fulfilling the order and finally invoicing. And what about the warehouse transactions? None of this is possible without accurate inventory counts and inventory being available to fulfill an order. Behind every step of this process in any given company sits an employee, or a team of employees, whose daily job is to download orders, organize them in spreadsheets and import them into NetSuite for processing.  They often have to manually check and allocate inventory order by order. Once orders are fulfilled and shipments are on their way to the final consumer, there come more spreadsheets back into the EDI and final invoicing.

A cloud-based EDI integration with NetSuite can make that process seamless and completely automatic. There are a number of EDI providers on the market, which support direct integration into NetSuite without the use of middleware or connector software. One example is TrueCommerce, which supports a SuiteApp that can be installed in NetSuite connecting the two systems directly. Most of the functions in TrueCommerce are supported by a series of saved searches in NetSuite, which provide real time dynamic data based on specific criteria. In an example configuration, multiple saved searches can be created for various types of daily transactions (purchase orders, sales orders, invoices) based on customers and status, inventory levels by location and other business process specific information. After the technical configuration is complete, NetSuite and TrueCommerce “talk” back-and-forth and exchange information with minimal need for human involvement. In other words, imagine providing a daily feed of your current inventory levels to your trading partners, that takes into consideration inventory commitment and availability based on orders already in the system. Then imagine waking up to hundreds of orders automatically created in NetSuite, ready for your team to fulfill.

This type of automation also allows the flexibility and control to handle outlier scenarios that arise outside of the process. Perhaps a product is temporarily on hold or permanently discontinued. Perhaps your team is performing physical inventory at one of the locations and inventory at that warehouse should be excluded for a week. Adjusting the configuration to account for those outlier situations is a breeze. Simply changing the criteria in the relevant NetSuite saved searches is all you would need to do. An EDI integration makes all that a reality!

Take It a Step Further

If your business operates in the manufacturing, wholesale distribution or retail space, an EDI integration can be particularly relevant and helpful. However, providing inventory and processing orders is only part of the equation. The fulfillment process can be a beast in and of itself, especially if you are using Third-Party Logistics (3PL) partners with warehouses scattered across the country. It requires daily coordination and communicating accurate order information is key. But between providing order information manually and no control over the systems the 3PL partners are using, challenges often arise – missed orders, inaccurate quantities, wrong shipping addresses, you name it. One major difficulty is related to the fact that every 3PL partner uses a unique process and software solution for managing inventory and fulfilling orders, and let’s just say that some are definitely more sophisticated than others.

Where does that leave you? Your team has to tailor their own process to meet the requirements of each 3PL partner. That usually means time consuming manual effort to prepare spreadsheets in different formats, containing different information, transmitted at a different time – you get the picture! Automating this process via a custom 3PL integration with NetSuite can be a real time saver and a breath of fresh air for your team. The unique nuances of each 3PL partner process can be configured and automated in a way that eliminates most of the manual effort, while providing everything the 3PL partner requires to fulfill an order. And here comes the best part - the integration automatically communicates the fulfillments back into NetSuite where the EDI integration transfers them to the EDI to wait for final invoicing to the trading partners. Creating a custom 3PL integration with NetSuite does require a middleware solution, such as Celigo or Boomi, and takes time to design and build, but it can be a well justified strategic investment that will pay for itself.

Finally, as an upgrade to this automated process, it is also a great option to utilize some of NetSuite’s native features that can aid in inventory management and invoicing.

For example, with Advanced Order Management comes Automatic Location Assignment. Through a series of predetermined inventory allocation rules NetSuite can automatically assign an order to a particular inventory location. The allocation can be customer or product specific and based on current inventory levels and warehouse priority. Using the feature eliminates the need for employees to review each order and allocate it to a warehouse for fulfillment manually.

The accounting team can also enjoy the benefits of automation with a billing operation schedule. The set up is simple and can be customer specific. The billing schedule uses a saved search containing the orders to be included in the billing run and can process hundreds of invoices at the designated time and frequency.

A Client’s Perspective

I was recently a part of the FMT Consultants team, which implemented NetSuite with an EDI and custom 3PL integrations for FirsTime & Co, a retail/wholesale distribution company for home décor and furniture. The solution provided their relatively small team with a complete order-to-cash automation and a few months after taking it live the benefits are already significant.

Ali Khan, Administrative Manager of FirsTime:

“Integrating True Commerce EDI partner with Oracle NetSuite allowed us to fully automate our E-Commerce order processing system with seamless integration with our 3PL’s for daily order processing. With minimum oversight we can now process twice the recorded order volume than with our manual legacy ERP system. Without this solution FirsTime would not have been able to increase its sales revenue without adding additional resources to EDI systems team.”

If you are interested in learning more about this type of integrated solution, contact our team at at FMT Consultants.