1 EDI Source: Advanced Analytics for the CPG Industry

David Lowman, President
This success story began in 1991, when Highland, a company selling splashguards to Walmart transitioned to selling tie downs. The move however was fraught with many challenges and operational issues that slowed its business considerably. Walmart required Highland to shift from manual order entry and invoicing to an automated system using Electronic Data Interchange (EDI). In 1997, Highland began using 1 EDI Source’s innovative EDI solution, which changed every aspect of its business. With primary benefits like reduced costs, savings on time, and less chargebacks, Highland eventually became the category leader at Walmart. The dominant influence of 1 EDI Source’s solution enabled Highland to achieve operational excellence, as well as to adapt to its changing business goals and needs as it rapidly grew.

Today, the success story continues in more than 20,000 companies spanning various industries benefiting from 1 EDI Source’s proven, cloud-based solutions, data mapping applications, and comprehensive consulting and outsourcing services.

The EDI Path

The early nineties heralded the evolution of Supply Chain Management (SCM) from the functional SCM to the value network of today. Along with that, the communication and the number of events in a product shipment life cycle also underwent a makeover, resulting in a surge of information. Consumer Packaged Goods (CPG) companies therein realized the importance of automated electronic exchange of information. “However, for a typical supplier in the complex CPG sector, the challenges abound in the visibility into trade exchanges and transactions and speed to market,” says David Lowman, President, 1 EDI Source. “The paradigm shift for us was that we recognized the tremendous value of analyzing and managing the data generated from all the information exchanged between partners. Though there are many forms of information carriers, EDI lets us do what we intend to do in creating the required insights.” An EDI type solution creates the perfect environment and forte through its rigid set of rules, guidelines and standard formats on the exchange of information between trading partners.

With EDI transactions exceeding $20 billion per year and still growing rapidly, Lowman is focused on executing winning strategies on product evolution at 1 EDI Source, which celebrated its 25th anniversary last year.

According to Lowman, the solution providers, with whom 1 EDI Source competes, can be placed into two broad categories. “The first group helps create solutions that simply exchange data between partners; we call it the ‘pipe’ to facilitate the exchange of information between trading partners. While our solutions manage this flow very effectively, we also play in the second group, the higher value share of the EDI market,” reasons Lowman. “We can break into the ‘pipe’ and analyze the more relevant data to improve the visibility of the information flowing through the EDI pipe. This higher level analytics provide nuggets of gold that improve the way you perform or manage your business for a customer,” says Lowman. There exist two higher-level functions within the automated dataflow between the customer and the vendor. 1 EDI Source steps in when companies want to differentiate on their interactions with customers. “We go into the first layer of the exchange of information called the analytics or the visibility layer, bubble up and provide alerts to customers through our software. For instance, the alerts could relate to a price point on an invoice that does not match with the price mentioned in the purchase order. This avoids scenarios where the invoice might get rejected by the customer for reasons like unmatched pricing,” says Lowman. With the solution, the clients can remove the tedious and time-consuming process of reissuing the invoice that will lead to duplication. “Our solution provides visibility and alerts the EDI coordinator. He quickly identifies the reason for the rejected invoice which could be due to mismatch in the price, and can issue a fresh invoice. Most importantly, the invoice gets paid accelerating cash collections.”

The second layer is 1 EDI Source’s area of differentiation wherein additional features known as ‘Intelligent Levers’ are incorporated into the product—the beginning of a new concept. “Our platform for automation and analytics—IntelligentXchange helps suppliers in the CPG space to pinpoint areas of improvement in their operations. This adds tremendous value in significant cost savings to your organization because you start to eliminate a lot of inefficiencies based on that information,” says Lowman.

The software not only identifies any mismatch between the invoice and the purchase order, but also intercepts the flow of automated transactions between two partners based on a criterion established by a client. Alongside solving the problem, IntelligentXchange, when coupled with the flagship product EDI/HQ helps you identify issues that in most organizations go undetected and cause downstream pain in the form of strained relationships with customers, fines and inefficiency—a win-win situation for both customers and suppliers. The solution provides very clean and simple visibility into the most important exchanges. This acts as a checkpoint to identify only those transactions and information that are inconsistent with the guidelines of the company, preventing inefficient and error prone operations, thereby reducing costs.

Powerful Intervention

Companies which implement IntelligentXchange realize the ease of operations allowing their teams to focus on other aspects of business.
Of the myriad advantages, a CPG company implementing the IntelligentXchange solution can reduce their invoicing cost by 70 percent, reduce their shipments, and cycle times as much as half. “For example, our software would notify the shipping team if their customers require them to send out an Automated Shipping Notice (ASN) and even alert them if the ASN is at risk of being late. These series of checks enable our customers to have a better view of internal operations—whether an ASN is sent, are they effectively meeting all ASN requirements across their customers, and whether the prices are matching— driving operational excellence for customers,” says Lowman. “IntelligentXchange raises awareness of operating inefficiencies amongst finance, customer support, and fulfillment teams and acts as a performance scorecard to monitor the progress and take corrective action on those parts of the exchange that needs remedial action.” The trading partner is much more interested in doing business because they are not spending all their time on unwinding transactions that have errors in them.

In a nutshell, IntelligentXchange turns complicated EDI data into meaningful business milestones and metrics that significantly improve profitability and operational efficiencies. The business leaders require information that reveals metrics on the volume of business transacted last month or this week or even the revenue generated on a particular product, and the information flow through the EDI solution. “Through IntelligentXchange, a SaaS based technology, we can give access to these information to help any company perform better,” says Lowman. Now everyone can be on the same page with relevant, accessible data easily broken down with customized interfaces developed specifically for accounting, sales, customer service representatives and other business stakeholders.

Competency and Strategy

In the case of Highland’s EDI implementation stated earlier, the company used EDI as a “pipe” to send information from one company to the other. Through implementing intelligent levers using 1 EDI Source’s tools, the firm was able to easily identify purchase order, shipping and invoicing issues that would have created much larger problems if they had gone unnoticed. Once the firm saw the benefit of electronic commerce, they quickly on-boarded all customers that could support EDI —95 percent of all purchase orders were automated. The solution enabled them to expand their business aggressively in terms of trading partners, which grew to an impressive number of 125 while the revenue increased from $4 million to $50 million and chargebacks actually declined from $500,000 to $250,000. “The company had profit margins that were double the industry average because of the efficiencies. Most importantly, they had just 12 people in their service group from the time they were $10 million to the time they were $50 million,” affirms Lowman.

What’s in Store

At 1 EDI Source, the focus continues on investments in their flagship product, EDI/ HQ which is a very robust EDI engine, tailor-made to meet the demands of warehouses, back offices, and procurement departments across a variety of industries. “EDI/HQ provides high level visibility and has a great dashboard capability so that companies can set up their own views into the critical alerts and common EDI issues,” says Lowman.


IntelligentXchange’s bolt-on capability will provide you with complete visibility— just like you are running it through your system


1 EDI Source is poised to take advantage on addressing a limitation that many companies are plagued with—the switching costs of the mapping engines that have to be designed to facilitate the automation while switching from another provider to 1 EDI Source’s solution. “As potential game changers in the industry, we intend to provide a bolt-on capability to any existing EDI solution. IntelligentXchange’s bolt-on capability will provide you with complete visibility—just like you are running it through your system. You can get the value from a high value automated solution without the need to throw out a system and put in a new one avoiding the cost of switching from one EDI provider to another,” says Lowman.

Lowman’s focus has been to bring in a team of very high performing people towards providing winning solutions for customers, and a challenging environment for employees—a place they call a second home. “We have been very customer focused and disruptive in an industry which hasn’t seen innovation for a long time. This encourages us to roll out new products in the coming years where our scheme of things on either developing a product, our consulting services or exploring frontiers, leverage the benefits of EDI to improve our customer’s performance,” reaffirms Lowman.

Company
1 EDI Source

Headquarters
Solon,OH

Management
David Lowman, President

Description
Provider of Electronic Data Interchange (EDI) software and outsourcing solutions.