How to save money on EDI (Electronic Data Interchange) fees with Minotaur

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If you sell to major retailers and ship your product to their warehouses, as opposed to DSD (Direct to Store Delivery), you may be asked to transact with that customer using EDI. Similarly, if you sell to major food service distributors such as Sysco or GFS, you may similarly be asked to use EDI.

EDI stands for Electronic Data Interchange and it is an electronic method many larger companies use to send their PO’s to you and to receive and process invoices from you. It allows two parties with different computer systems to nonetheless exchange information electronically, often through the use of a VAN, or Value Added Network Partner.

A VAN can serve two purposes. One is they act as a mailbox service, or repository where you leave documents for your customers and they leave documents for you; a place where you both have access to pick up and deposit documents at your convenience. The second service a VAN can provide is to act as a document translator, where they actually open your ‘mail’, decode the document and either email the information to you and/or offer an online portal where you can collect that information, as well as input other information to respond. For example, you might use an EDI portal to enter invoice details for your customers where the VAN’s translator will create the electronic version of your invoice and place it in your customers mailbox. Similarly, the VAN’s translator program can receive an order for you from your customer, decode it and send you that information in an email.

If you have a Minotaur system, you can continue to use a VAN mailbox service, but you won’t need their online program decoder/translator because Minotaur can do the decoding and document creation for you. That also means no duplicate redundant data entry for your staff. Your Minotaur program can receive and interpret standard EDI documents like PO’s directly and also generate EDI outgoing documents such as invoices already mapped to your customers’ requirements. Minotaur comes EDI ready with all the EDI menu options, so if your customers ask, you can begin using EDI with Minotaur quite quickly.

Every EDI document has a number. For example, an invoice is an 810 and a PO is an 850. As each retailer has their own computer system for inventory and accounting, each retailer similarly has a unique file format of what fields of information they want and the order they want those fields to be sent, so that their computer system can read the file seamlessly. That is why Minotaur needs to map the EDI documents to the specifications of each retailer you deal with. There are also different fields used based on the type of product you are selling to that retailer. Ask your Minotaur Project Manager for a quote on EDI document mapping charges for the particular customer and documents that are being requested.

It’s important to note that you do NOT have to use a VAN. VAN’s charge monthly fees plus fees for each transaction they process. There is software available via AS2 that will allow you to send and receive documents without the use of a VAN. It costs about $500 USD/customer/year. If you choose to use a VAN, you can choose from a large number of VAN suppliers. If you are going to be doing EDI with Costco, Loblaw, Canadian Tire or FGL (Forzani Group Limited–Sportchek), you will need to REGISTER with a company called SPS Commerce, because they are the licensed testing agents for those retailers. SPS will be testing files for all new EDI suppliers to these large retailers. However, you do NOT have to use the EDI VAN mailbox services of SPS Commerce, although that is an option. You may choose to get competitive pricing from other VAN providers such as Tangentia or Commport (there are others still) or consider direct to your customer with AS2 and then decide which service is best for you.

Regardless of which EDI document communication method you choose, if you are starting EDI with Costco, Loblaw, Canadian Tire or FGL, you will typically have to pay an SPS Commerce testing fee of about $500-600 Canadian for each retailer you set up. SPS will send you sample PO files to read (if your EDI customer will be sending you a PO) and SPS will request sample files back from you (such as an Invoice), to test that they work and do not give any errors when loaded. Currently, we are not aware of other Canadian retailers charging testing fees although they may ask you to send them test documents.

You can generate these test documents from your Minotaur test system so that your live system is unaffected until you go live with EDI with that customer. For some products going to Loblaw warehouses, you may be asked for an additional EDI document called an ASN (Advanced Shipping Notice) combined with an MH10 label, which is a serialized barcode label you’ll need to apply to each skid you ship them. The ASN EDI document will detail the items and lot numbers of product on each serialized skid being shipped to Loblaw. Minotaur can produce the ASN document. There are a few options for how you can use Minotaur to collect the detailed information about what is on each skid, and which one you should use will depend on whether you are running the Minotaur handheld warehouse management system or entering transactions through a keyboard. Again, talk to your Project Manager at Minotaur if you are being asked for an ASN/MH10 combination for Loblaw or any of your customers.

Finally, it is valuable to note that EDI is not just for transacting with customers. Some Minotaur customers use EDI with suppliers or with third party warehouses or to send information between their own operating companies. EDI offers a standard method of file sharing between two companies. It can save you or your suppliers time by removing the need to manually enter details into a computer system, as those details can be read in automatically from files. For example, one Minotaur customer that is a meat processor receives an EDI ASN from their large meat supplier. In the meat industry individual cases are typically labeled with a unique weight and serial number. By receiving a file with the details of what the supplier has sent to them, they save the time it would take if their staff had to scan every case into inventory. The file populates their Minotaur system with all the detail.

Minotaur’s EDI program can also help prevent errors. For example, for arriving PO’s from your customers, the Minotaur EDI loading program will check the ship to, items and prices against your Minotaur data and let you know if there are any discrepancies, so you can resolve them before you ship out the order. Many Minotaur customers used to have one or more full-time people dedicated to managing EDI in their company and they were able to cut that in half by moving to Minotaur EDI.

Finally, Minotaur’s EDI is the perfect preparation for being blockchain ready. This 2020 article on EDI and Blockchain by IBM‘s reports “industry-standard data (in EDI standards) will start getting synched with the blockchain network. The information your trading partners need is extracted out of local data sources and formatted according to these standards, then synched to the blockchain to make it a single source of truth.” So having integrated EDI to your ERP system is a valuable step in being ready when customers start asking you to contribute information to their traceability blockchains.

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