May 12th, 2021
Today, having an accurate inventory overview can be the difference between earning profits and losing customers. This especially holds true in the automotive industry, as consumers are uber demanding and supply chains are becoming way too complicated.
Now more than ever—with increased digitalization and the accelerated shift towards e-commerce—auto parts consumers want their products as quickly as possible. If you accidentally run out of stock, they will turn to the competition. The reality is, it only takes one mistake in stock count to lose a customer. Regardless of where you are in the supply chain, this affects everyone—suppliers, manufacturers, distributors, dealers, logistics partners, and more.
Many businesses have turned to EDI to ensure inventory is tracked in real time across the supply chain to avoid stockouts and other inventory-related issues. However, there is still a large share that relies on auto parts inventory spreadsheets to track inventory manually. And on the very far end of the spectrum, there are even those that don’t track inventory at all.
Many smaller or medium-sized businesses simply don’t have the budget (nor the resources) to invest in a full-scale EDI solution. But the good news is, they don’t have to. EDI is often perceived as a one-size-fits-all solution that is only meant for enterprises with big budgets—but that’s not true. Today, solutions like web-based EDI provide a much more affordable alternative to fully automated EDI. Still yet, web-based EDI solutions offer many perks, including automated inventory tracking, and all you need is an internet connection.
EDI vs. Internet-Based or Web EDI
What is internet-based EDI, and how is it different than standard EDI?
In short, internet-based EDI is web-based EDI. It’s often referred to simply as web EDI, and it allows you to exchange business documents—purchase orders, invoices, ASNs, inventory inquiries/advice, and more—electronically with your trading partners via a web-based portal. Once you enter the required information into the portal, it is then translated into the appropriate EDI format and sent directly to your trading partners. No more digging through emails or sorting through mail to see how many inventory items are available. You can log in to the portal anytime, anywhere. You just need a web browser.
As opposed to traditional EDI, exchanges via web EDI are not fully automated. But investing in a full-scale EDI solution doesn’t always make sense, especially for businesses with low-volume exchanges.
With web EDI, you are able to quickly track inventory levels and improve collaboration with your trading partners at a price you can afford.
If you’d like to learn more about web EDI, this post dives into how web EDI works, as well as the advantages for both suppliers and buyers.
Why Keeping an Accurate Inventory Is Crucial for a Successful Automotive Supply Chain Strategy
One of the main reasons to keep an accurate inventory, as mentioned earlier, is to meet customers’ expectations. When you know exactly what is in stock at any given time, you can fulfill orders faster and avoid delays due to stockouts. This ultimately prevents your customers from running to the competition. And as we all know, happy customers are loyal, returning customers.
To put it simple, stockouts can put your reputation at risk and cause significant financial losses. On the other hand, overstocking can also lead to additional costs: You may end up with products sitting on your shelves that you are not able to sell.
With web-based EDI, the timely and accurate transmission of inventory data will help you to find the right balance between too much or not enough stock. This will enable you to better forecast inventory for future demand, reducing unnecessary costs.
Additionally, more and more automotive companies are beginning to adopt a just-in-time (JIT) manufacturing approach. This requires that stock is received at just the right time and in just the right amount to fulfill an order, and tracking inventory updates in real time across the entire supply chain becomes even more critical.
Inaccurate inventory can, in fact, impact your supply chain at every level. For example, if you are not able to sync sales orders and inventory status updates in real time and you sell through multiple marketplaces, such as eBay Motor and Amazon, you accept the risk of overselling a product that you do not have on hand.
When you have a lot of stakeholders and time zones involved in the manufacturing, sales, and fulfilment processes, automated inventory tracking is key. This is especially true if you are incorporating omnichannel, JIT manufacturing, and/or drop shipping in your strategy. In these instances, working with siloed and inconsistent inventory data can cause a ripple effect on the entire supply chain.
A Win-Win for Everyone
As automotive supply chains become increasingly complex and globalized, automation becomes crucial to increasing collaboration across all parties, regardless of supply chain position and regardless of EDI capabilities. With web-based EDI, smaller businesses can easily automate inventory tracking without investing in a fully automated EDI solution. This is beneficial for everyone involved, as larger partners no longer have to deal with manual updates, and suppliers can better predict inventory. In fact, even with web EDI, suppliers can receive real-time inventory updates directly in their ERP and benefit from end-to-end inventory visibility. It’s a win-win for everyone!