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Simplify Order Fulfillment with NetSuite EDI Integration

By Katerina Toth .

Today, consumers have the option to go online and purchase anything at any time, day or night. This behavior was already becoming a trend and demand grew during the pandemic. Naturally, the business environment has evolved to meet consumer's expectations. To comply with requirements from major retailers, such as Amazon and Walmart, small and medium size companies have to establish presence and connect through an Electronic Data Interchange (EDI) to support their increasing inventory needs. Although NetSuite EDI integration may start as a matter of compliance, it can become a strategic investment in future growth and returns.

What is EDI?

Electronic Data Interchange (EDI) is the electronic transfer of business documents traditionally communicated on paper, like advance ship notices. By modernizing this exchange of information, businesses reap major benefits, which appear in cost savings, greater speed, fewer mistakes, and better business relationships.

The concept of EDI is not new – the technology has been around since the 70s. In fact, companies have been reaping the benefits of this type of information exchange 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 NetSuite or other enterprise resource planning (ERP) systems. This integration uncovers a whole new dimension of exchanging business documents between two trading parties. Specifically, parties can connect and automate the entire business process chain – from receiving, acknowledging, shipping, and invoicing an order.

Processes you can streamline with an EDI integration

An EDI integration can take a business running on Excel spreadsheets with considerable manual effort each day and super charge its power by completely automating the order and fulfillment process. The following operations may be part of the full cycle of processes that this type of integration can streamline:

  • Initial receipt of the order from the end consumer
  • Issuing the purchase order, or receiving the purchase order from the trading party,
  • Acknowledgment of the purchase order
  • Creating the order in the ERP system
  • Sending an advanced shipment notice
  • Fulfilling the order
  • Invoicing

This list still does not even encompass the warehouse transactions. None of this is possible without accurate inventory counts and having inventory available to fulfill an order. Behind every step of this process is an employee or team 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 a company fulfills their orders and shipments are on their way to the final consumer, more spreadsheets come back into the EDI for final invoicing.

How a NetSuite EDI integration works

A cloud-based EDI integration with NetSuite can make that process smooth and completely automatic. Several EDI providers on the market support direct integration into NetSuite without middleware or connector software.

One example is TrueCommerce, which supports a SuiteApp that users can install in NetSuite to connect 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 daily transactions. Such transactions include purchase orders, sales orders, or invoices, based on customers and status, inventory levels by location, and other specific business process information. After the technical configuration is complete, NetSuite and TrueCommerce exchange information with minimal need for human involvement. This can create a daily feed of your current inventory levels for trading parties. The feed takes into consideration inventory commitment and availability based on orders already in the system. Additionally, the technologies work together to create hundreds of orders automatically in NetSuite, ready for your team to fulfill.

This type of automation also allows the flexibility and control to handle outlier scenarios that arise beyond the set process. Perhaps a product is temporarily on hold or permanently discontinued. Perhaps your team is performing physical inventory at one warehouse, so you need to exclude its inventory for a week. Adjusting the configuration to account for those outlier situations is extremely simple by changing the criteria in the relevant NetSuite saved searches. An EDI integration makes this all possible.

How a NetSuite EDI integration can easily fulfill 3PL requirements

If your business operates in the manufacturing, wholesale distribution, or retail space, an EDI integration can be particularly relevant and helpful. Generally, providing inventory and processing orders is only part of the equation. The fulfillment process can be complex, especially when using third-party logistics (3PL) providers with warehouses scattered across the country. It requires daily coordination, and communicating accurate order information is key. Thus, challenges often arise when providing order information manually with no control over the systems the 3PL providers are using. These include missed orders, inaccurate quantities, and incorrect shipping addresses. One major difficulty is related to the fact that every 3PL provider uses a unique, and sometimes sophisticated, process and software solution for managing inventory and fulfilling orders.

Your team has to tailor its own process to meet the requirements of each 3PL provider. That usually means time-consuming, manual effort to prepare spreadsheets in different formats containing different information to transmit at different times. Automating this process via a custom 3PL integration with NetSuite can save time while relieving your team. The integration can configure and automate unique nuances of each 3PL provider's process. It does this in a way that eliminates most of the manual effort, while providing everything the 3PL provider requires to fulfill an order.

One of the biggest benefits is that the integration automatically communicates the fulfillments back into NetSuite. There, the EDI integration transfers them to the EDI to wait for final invoicing to the trading parties. 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.

Additional benefits of automating process by integrating EDI with NetSuite

As an upgrade to this automated process, it is also a great option to utilize some of NetSuite’s native features to 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. This can process hundreds of invoices at the designated time and frequency.

An EDI integration into your NetSuite system can streamline your business processes and give you a scalable solution to support your growth. To learn more about this type of integrated solution, reach out to your Citrin Cooperman advisor or Katerina Toth at ktoth@citrincooperman.com.

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