3PL and EDI self service onboarding

Third-party logistics (3PL) and Electronic Data Interchange (EDI) self-service application can provide a myriad of advantages for businesses, streamlining operations and improving efficiency. They can improve efficiency and scalability, improve collaboration and allow for greater cost savings so companies who offer 3PL and EDI self service onboarding can automate more external processes and focus on their core business.

Why Consumer Goods (and Fast Moving Consumer Goods) companies change their 3PL providers?

Fast-moving consumer goods (FMCG) companies often change their third-party logistics (3PL) providers for a variety of reasons:

Cost-Effectiveness: One of the primary reasons is cost. Companies are always seeking to maximize profits and minimize costs (sounds fair right?). Logistics can be a significant expense. If a different third-party logistics (3PL) provider can offer similar or better services at a lower price, it might be a compelling reason for the FMCG company to switch.

Performance Improvement: If the current third-party logistics (3PL) provider is not meeting the performance metrics or service level agreements (SLAs), the FMCG company might look for a new provider that can meet these expectations.

Geographical Expansion: If an FMCG company expands its operations to a new region where the current third-party logistics (3PL) provider does not have a presence, it may switch to a new provider with a stronger network in that area.

Innovation and Technology: The logistics industry is continually evolving, with new technologies and innovative practices being developed. If another third-party logistics (3PL) provider offers more advanced technology or innovative solutions that can improve efficiency, the FMCG company may choose to switch.

Risk Diversification: Some companies may switch third-party logistics (3PL) providers to diversify their risks. Relying on a single provider can be risky if that provider encounters problems.

How can a 3PL self service onboarding work?

As you can see in the Figure below a third-party logistics (3PL) provider can use a self service onboarding application (portal, chatbot in Slack, MS Teams etc.) to simulate sales order creation in the SAP S/4HANA systems of the Consumer Goods company in order to receive an outbound delivery which the third-party logistics (3PL) provider can later on process (pack, ship, transport).

This means that no manual actions are required from the standpoint of the Consumer Goods company to validate the third-party logistics (3PL) provider connectivity. This leads to easier and faster onboarding process which in turn leads to all of the positive effects Consumer Goods companies look after when changing the third-party logistics (3PL) providers.

Why does it make sense to create self service EDI onboarding for Retail and Automotive companies?

Efficiency: Self-service EDI onboarding automates the process of setting up new trading partners or changing existing ones, reducing the need for manual effort and making the process faster and more efficient.

Cost Reduction: By automating the onboarding process, businesses can reduce the costs associated with manual setup and data entry, such as labor costs and the costs associated with human errors. The cheaper the testing the more of it can be done which might result it better quality.

Scalability: Self-service onboarding allows businesses to easily and quickly onboard new partners as they grow and expand, without requiring a proportionate increase in resources or personnel.

Accuracy: Automated processes reduce the chance of human error, improving data accuracy and integrity. This is especially important in industries like retail and automotive, where inaccurate data can have significant implications.

Empowerment: Giving trading partners the ability to manage their own EDI setup and changes empowers them and can improve relationships and collaboration.

24/7 Availability: A self-service portal can be available round-the-clock, allowing for onboarding or changes to be made at any time that’s convenient for the partner, rather than being restricted to business hours. Does anyone like to wait and be restricted by working hours of the other party from another time zone?

How can an EDI self service onboarding work?

As you can see in the Figure below an EDI Vendor can use a self service onboarding application (portal, chatbot in Slack, MS Teams etc.) to simulate purchase order creation in the SAP S/4HANA systems of the Retail, Automotive company in order to receive a Purchase Order and then process the inbound delivery and invoice in the system of Retail, Automotive company.

This means that no manual actions are required from the standpoint of the Retail and Automotive company to validate the EDI vendor connectivity. This leads to easier and faster onboarding process which in turn leads to all of the positive effects Retail and Automotive companies look after when working with new EDI vendors.

How is all that possible?

In order to create a self service you need to have a service virtualization (EDI partner simulation) software which allows to work with different integration platforms used by SAP customers (SAP Process Orchestration – B2B addon, SAP Integration Suite – Trading Partner Management, Boomi, Mulesoft, Webmethods, Azure LogicApps, etc.) but also with the SAP S/4HANA ERP system as the data which is being distributed to the EDI and 3PL partners much be real (validated within the SAP S/4HANA system).

Where I can learn more about this topic of Simulations/Service Virtualization for SAP transformation programs?

There’s a 3h course on openSAP just on this topic called “Avoid SAP S/4HANA Project Delays with Third-Party Systems Service Virtualization” – In this course we help you understand why SAP-tailored service virtualization is a hidden gem of SAP S/4HANA projects, who can use it and when to use it, and most importantly, how to benefit from it. In addition, you’ll learn how service virtualization can make your projects more sustainable by significantly minimizing their carbon footprint.

Further reading

State of Worldwide Business Assurance for SAP solutions 2023 – Report that highlights the use of Service Virtualization for SAP S/4HANA programs

Simulate 3rd party, non-SAP systems and EDI partners to remove delays from complex SAP S/4HANA transformations