In an effort to provide consumers opportunities to engage with retailers anytime and anywhere, companies are turning to creative methods for managing purchase orders to maximize their product offerings and availability, while continuing to manage the risk associated with carrying too much inventory. Retailers offer products through their web sites and mobile applications that cannot be found in stores, and are working with suppliers to develop direct-to-consumer shipping processes. The retailers’ goals are to accommodate a diverse base of customers that desire to have whatever they want as soon as they decide they want it, as well as maintain profitability levels in a continually challenging economic environment.
This new way of working together has resulted in the need for the industry to examine the purchase order process to determine how we can best improve it to accommodate all the channels now available for product delivery. In my last post I set the stage by painting a historical picture of our efforts to improve B2B communications, and now, I’d like to dig into some of the details of how we intend to build a better purchase order.
In 2012, the industry, with the assistance of standards associations, such as GS1 US, industry-based advocate organizations like Vendor Compliance Federation (VCF), and trade associations including VICS, will come together to start examining potential changes to both standards and guidelines to allow us to continue to leverage our long-standing history of the community-based approach for best practices in B2B for the order-to-cash cycle.
Various aspects of the process and documentation need to be examined. I had the privilege of hosting a preliminary discussion with several user companies a few weeks ago, and the following is just a snapshot of the areas that these industry experts have suggest require more detailed attention:
- Modifying trading partner agreements to include definitions of which channels products will be sold in and the requirements for each
- The importance of item setup (data synchronization) to support communication of dimensional data that addresses: 1) out-of-box for displays and planogram applications; 2) packaged dimensions for logistics and shipping in traditional supply chain product flows (to distribution center or direct-to-store); and 3) packaged dimensions for direct-to-consumer use cases where more individualized packaging is required
- Expansion of testing scenarios between trading partners to ensure that different varieties of purchase orders, specifically related to packing requirements and destination location information across channel types can be successfully understood and processed by both parties
- Increased usage of the purchase order acknowledgement (known as the 855 in X12 EDI) to confirm commitments between supplier and buyer earlier in the purchasing cycle
- How supplier organizations can streamline the complexity of picking, packing and distribution for each channel
- How merchant organizations and retailer business systems can simplify the management of purchasing across channels
As you can imagine, I have only scratched the surface of the “opportunities” (read: work) we have as an industry to drive our standards forward. I look forward to a productive and challenging year in conferring with my colleagues on how we make the next generation purchase order a reality.
3 Responses to “2012 will be the year of the cross-channel purchase order for retail”
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[...] the standard B2B e-commerce transactions to better accommodate the cross-channel model. <<Read more>> #4 – Next Best Offer Forces Marketing to Align with Supply Chain Next Best Offer (NBO) [...]