Business-to-business integration has taken the logistics industry by storm in the past five years. Organizations, from retailers to manufacturers to third-party logistics providers, realize their future success depends on integrating their enterprise and/or legacy systems with their vendors’ and suppliers’ systems. A 2013 Stanford Global Supply Chain Management Forum bemoaned the frequency with which small-to-medium-sized businesses still used phone, fax and email data exchange, rather than B2B integration. Whether that integration comprises simple electronic data interchange of orders and invoices, or full-scale collaboration between businesses’ order management systems, the sheer amount of data prevalent in today’s supply chains requires digital collaboration.
Integrating enterprise and legacy systems with a cloud-based platform is key for the success of supply chain-focused businesses. The software pays for itself, based solely on the time saved by eliminating manual work.
"The middleware, which manages shipments generated in multiple systems, vastly simplified the process of adding or removing a TMS as the 3PL grew or terminated vendor relationships"
The cost savings resulting from the reduction of manual entry and elimination of human error are significant. For example, according to a 2011 ARC Research study, an integrated transportation management system can save a manufacturer transportation costs in various areas, including increased use of preferred carriers, better routing and lower cost mode selections. Similarly, the reduced amount of labor, such as excess dispatchers, can result in significant savings. In total, a well-executed TMS can realize impactful savings in a manufacturer’s transportation budget, according to ARC Research.
Cloud-based B2B integration services typically offer an application programming interface to allow business partners to exchange data. The API will require a specific set of data elements and then store the data for centralized client visibility. After the API stores the data, it can be transferred to other systems and appropriate parties can receive status notifications. A secure network protocol, such as HTTPS or AS2, will be used for transferring data at this point in the process. Subscribing to a secure, cloud-based B2B service eliminates the need for the client to maintain their own software and employ expensive IT resources. The client will receive access to a secure portal that allows them to view activity and run customizable reports. Automation features offer the ability to email these reports to the client’s team members or business partners. The reports can run at specified intervals or be triggered to send based on a system activity.
Curious how B2B integration can help your organization? The following anecdote illustrates the benefits of effective B2B integration of various TMS programs.
When a leading 3PL provider began experiencing issues managing data from the company’s three TMS programs, as well as its own enterprise system, it needed a proficient solution. The provider handles several thousands of shipments daily for dozens of customers, utilizing hundreds of carriers. The diversity of their TMS applications, represented by both on-site and SaaS/ cloud-based technologies, combined with their large carrier base and shipment volume, resulted in carrier data and EDI updates for shipment tracking and payment processing not always being sent to the proper TMS.
A portion of the incoming carrier data was incomplete and therefore rejected by the various TMS programs and the in-house EDI system; the data could not be matched to a shipment or order by the corresponding TMS.
The 3PL’s operations team expressed dissatisfaction with its limited ability to leverage control over data sent by carriers when certain fields weren’t provided. The company hired temporary staff to call carriers and gather information manually to manage shipment statuses and facilitate freight payment.
“We found ourselves in a place where our day-to-day operations were requiring more manual work than we wanted,” said the 3PL’s senior vice president of operations. “We had to implement a more efficient technology, process, or both to resolve our issues and be able to scale it as we grew our customer base.”
The 3PL purchased a B2B collaboration solution, providing one connection point for all carriers and a central repository for all of its transportation data. The platform’s enhanced business rules engine cleanses, matches, validates and augments all incoming carrier data before routing it to the proper TMS or its own enterprise system, providing updates to the operations team at every step.
Given the flexible and customizable nature of B2B integration software, the B2B collaboration platform also provides a queuing process for any unmatched documents received from the carriers, providing the 3PL’s operations team complete business visibility to all incoming data. Additionally, the B2B collaboration solution includes a carrier-facing portal, providing the option to communicate with the 3PL, without requiring EDI integration. The portal offers the ability to view shipment tenders, accept or reject the tender, provide shipment status updates, and create the freight invoice, while the 3PL’s TMS programs handle all shipper-side interactions.
“With this platform, we have a customized solution that supports our existing technologies without having to replace them,” says the 3PL’s senior vice president of operations. “Our operations team is now confident in the information available to them through the data cleansing and queuing processes. They can effectively make informed decisions and ensure customer service levels are met.”
After implementing the B2B integration solution, the 3PL eliminated the temporary staff hired to gather shipping information. The middleware, which manages shipments generated in multiple systems, vastly simplified the process of adding or removing a TMS as the 3PL grew or terminated vendor relationships. Thus, the company gained a customized, overriding technology platform to scale with its growth and enhance its existing processes as the business moves forward.
The most exciting feature of B2B electronic integration is its scalability, particularly when the cloud-based system your organization invests in is custom-built.
Additionally, in some cases, a company may have several internal system that cannot communicate well with each other. This may be the result of acquisitions, or different business units developing their own applications. So, while the case study above is one great example of integrating external systems, benefits also can be reaped by joining internal systems via B2B software.