Working your way up the Integration Ladder
Posted by AMS / Tuesday, March 10, 2015
Working your way up the Integration Ladder
For the last 16 years I’ve spent the majority of my time within the fulfillment and eCommerce arenas. While the industry is always full of strange and interesting products (infomercial products never cease to amaze me) a significant segment of the programs have been Footwear & Apparel. Over the years I’ve been lucky enough to experience working with successful startups that grew rapidly such as TOMS and industry goliaths such as Nike, Burton and Columbia Sportswear. Integration was always a key factor to grow and scale a client successfully.
Moving data around in the Textile & Apparel supply chain consists of many integration points. Let’s look at the supply chain integration levels as the steps on a ladder. As you move up the ladder you’ll have more partners you’re integrating with and data types to process. Moving your way up the ladder transitions the manual processing of Excel or printed reports to the systematic importing and exportation of transaction data. Some example transaction data would be orders, shipment confirmations, inventory levels, inventory transactions, returns, purchase orders and receipts. Each step when properly accomplished should reduce the time to process the transaction as well as increased accuracy.
Having worked on hundreds of integrations within the supply chain I find that there are many steps on the ladder but they are divided into three distinct sections.
Towards the bottom of the ladder we have minimal integration points in place. Only the transactions that make up the most volume are the ones that are integrated. Typically consumer orders and the shipping confirmations are connected with your warehouse or fulfillment provider. The rest of the business is run from transaction and informational reports being data entered.
In the middle section of the ladder we build on the lower steps and add in the transactions with medium volumes. At this point we’re tying in purchase orders placed with material providers and manufacturers, receipts of goods from the warehouse/fulfillment provider, B2B orders from major retailers and customer returns. Data entry at this point is minimal but still a necessity to keep everything properly balanced between systems.
Towards the top of the ladder we’re tying in as many transactions and data as possible. We’re accommodating for all the transactions on the lower steps but working to create a system that keeps everyone informed as real time as possible with preferably no human intervention. We also open up the ability to start utilizing multiple companies for the same data types such as multiple suppliers, order channels and warehouse/fulfillment providers. Data flows like carton numbers put in place by the factory and transmitted to the warehouse are utilized throughout the receiving process and within the warehouse to identify the contents inside. Inventory availability is tied in with multiple partners to allow for drop shipping and customer orders for available stock. Integrations to multiple order channels are in place as well. At this point the only thing your not integrating is transactions or processes that are the exceptions or rarely occur where the development costs and time savings aren’t justified.
Unfortunately there are many “Standards” when it comes time to connect with others. File types such as EDI, Text, XML and JSON tend to be the norm. Standard communication protocols include Web Services, AS2 and FTP. Partners will have their own mix of file type and communication protocols. When moving up the ladder you’ll find that you’ll need to accommodate for a mixture of these, integrate with a third party integration platform or work with a fulfillment partner that can.
Your ability to move up the ladder is dependent on many factors. First your systems must have an interface to move data in and out. Not all transaction types may be available for integration natively within your system. An often-overlooked feature is how integrations are triggered. Some systems have the data transfers run automatically, while others require a users intervention to trigger these processes. You’ll also want to check if your software provider has any experience with similar integrations. Partners (suppliers, fulfillment providers) must also have the appropriate integration options and experience. Many successful companies have started with integration limitations and over time they max out the capabilities and transition to a more capable system, integration partner, software provider or fulfillment company.
In fulfillment technology, the key to successfully climbing the ladder is making sure the next step you take has the most impact. When determining which data to integrate first/next I like to utilize Eliyahu Goldratt’s Theory of Constraints “Improvements made anywhere besides the bottleneck are an illusion”. Analyze which transactions are keeping your business from growing by taking the majority of your staff or partner’s time to process. Put in place the data integration needed to reduce that time, then go back and evaluate again to determine the next step to climb.