Tuesday, October 21, 2014

What exactly are the new DIM rule changes?

I think they've kept it very hush hush really, the fact that they will not only raising their rates but that they will be changing how they DIM Ground packages.  Starting December 29th, 2014 for UPS and January 5th, 2015 for FedEx your rates are going up, did you know?

Click here to view UPS Rate Changes

Click here to view the FedEx Rate Changes

But what does this mean exactly, right?  I think for different industries it means different things.  If you're an e-commerce/online store this could impact you a lot. 

The illustration above shows what the impact would be on packages of varying weights.  Although you need to take into consideration that there are zones, fuel surcharges, residential delivery fees and other accessorial fees that could affect pricing too but this gives you a general idea.  Some of the increases are pretty hefty.
It's a two-fold change:
Change #1 - Ground packages are currently billed on actual weight.  This means they weigh it and ship it.  Come next year, this is no longer the case.  On packages as small as 3x3x3 they will start to do what is called DIM'ing out the weight.  Here is how they do it:
Domestic shipments = LxWwH/166 = Dimensional weight in LBS
Actual weight = 3 LBS
Dimensional weight = 10x10x10/166 = 6.02 LBS
Get it?
International shipments = LxWxH/139 = International weight in LBS
Actual weight  = 20 LBS
Dimensional weight = 18x18x18/139 = 41.9 LBS
Making a little more sense now?
Change #2 - Both FedEx and UPS will raise their rates about 4.9% on Ground, Air and International Service Levels.
Crackerjack-IT can help you get ahead of this change.  There are free reports available from FedEx and UPS that will help you analyze your own shipment data.  Get ahead of this change, put processes in place, if necessary to lessen the impact to your business and your bottom line. 
Call us, we're here to help!  949.542.6072

Thursday, October 16, 2014

What are your "Go To"EDI resources?

EDI has been around since the mid 1950s but most companies only started really adopting it in the late 80s and early 90s.  It's always a good chuckle when someone says to me, "EDI, isn't that a legacy technology?" My answer is always the same, "sure maybe, but it's so ingrained in so many of our business systems that legacy or not, it's here to stay."

I remember when I first started doing EDI back in the late 90s, oh the mistakes I made.  I would have given anything to have the blogs, forums, and resources that are available now.  Over the years there are definitely a few good sites and products that stand out above the rest.  Here are some links to some of my favorites:

Stylus Studios EDI-L Blog - great resource for topics related to EDI, EDIFACT, and X12. Topics include EDI software, standards, applications, examples, and more.

EDI Notepad Editor by Liaison - life saver!  Sure your EDI translator will tell you some of things this editor will tell you but the various formats, errors outputs and displays that this editor will give you are invaluable and the download is FREE!

ASCII Codes - They're everywhere in EDI, right?  I know I've needed to look them up more then a few times.  This is a great list.

The Dreaded 856 HL Loop - I know I hate them and I also know I'm not the only one.  While this link doesn't cover palletized or multi-tare 856 looping structures, it does best explain the "basics" of 856 looping.

1EDISource for Resources - these guys have been my "go to guys" for the last 12 years or so now. I've been in the EDI industry for almost 20 years and I've worked with many EDI providers and solutions but these guys are best of breed in my opinion.  Check them out!

These are just a few of my favorite "Go To" resources when I'm stuck but a good old fashioned Google search will usually produce a ton of useful results nowadays.  Happy EDI-ing!

Tuesday, October 14, 2014

To In-House or Outsource... that is the question?

Two years ago I would have had a very different and completely one-sided answer to this question.  I had always been a one woman show.  I ran entire EDI departments by myself.  I believed EDI should always be done in-house and in some cases, I still do; however, in recent years, I have changed my tune and I will explain why.

To in-house or outsource your EDI solution is a question that almost every company has to answer at one time or another regardless of your size.  When you look at the options available out there on the market it can be overwhelming, but what you really need to look at are the true pros and cons of keeping your EDI In-house or outsourcing it?

Depending on your company size, response time expectations of trading partners, how EDI is perceived as a necessity within your industry, and other considerations specific to your own business, some of these may be more or less important to you but they will all factor into your decision. 

This is not an exhaustive list of the pros and cons to be considered, but a short list with many additional considerations as you examine one route or another for what would work best for your business.  Also realize there are many that use a hybrid EDI and MFT (Managed File Transfer) strategy, taking an in-house approach for some components of their business integration solutions and an outsource approach for other components of their solutions.

Keeping EDI In-house Pros:

  • Control - You have total control of your own system and trading partners
  • Speed - You have the ability to make changes quickly without having to wait or open a ticket to make an update
  • Understanding – You know your needs and requirements better than a 3rd party provider.  Often times you don’t have a dedicated support tech so you’re left to explain your business requirements and needs over and over each time they arise.
  • Reputation - Your reputation with your trading partners is important in business, they know they can call you when there's an issue and it will be resolved because it's a priority to you, they may not always be a priority to a 3rd party.

Keeping EDI In-house Cons:

  • Staff - Do you have adequately trained EDI personnel that can address issues in a timely manner
  • Maintenance - You are responsible for software maintenance, upgrades, etc. which takes time and money and can take time away from other projects
  • Monitoring - Having the staff to monitor your EDI system 24/7 and being available when issues arise with nightly transactions

Outsourced EDI Pros:

  • Technology - You don't have to worry about requirements and software/hardware, companies that specialize in Outsourced EDI have all you need
  • Requirements - There is no need to worry when a trading partner has special requirements, these companies are set up to handle a wide variety of special needs and circumstances.
  • Expertise - This is what they do, it's their focus and they have the experience and knowledge that your in-house team may not have.

Outsourced EDI Cons:

  • Lack of Control - You are leaving a major component of your business in the hands of a 3rd party with virtually no visibility into the EDI system
  • Cost - Outsourcing can be expensive and if you have a large volume of trading partners and transactions, those costs can add up quickly
  • SLA Issues - If you're dealing with an off shore company with a major time differential different from many of your partners or company prone to service errors and transmission failures this can be an issue and affect your relationship with your customers in some cases, resulting in fines from SLA violations.
  • Migrations - What happens when you are unhappy with the service you are receiving?  Migrating from one EDI Outsourcing company to another can be very expensive, time consuming, and complex with the risk of lost orders etc. in the transition.

While some of the pros and cons can overlap, there are still plenty of things to think about. Ultimately the decision has to be about what's best for your company.  Whether you decide you want to take the hands off approach, have total control of your EDI system, or something in between, you’ll definitely want to make sure you hire a consultant that can help you navigate and negotiate on your behalf.

With all that said above, I still haven’t told you where I land on the whole in-house vs. outsource question.  The truth is I think in general going with an in-house EDI solution is always the best option.  Sure initially the expense up front is a bit more but long term the payoff is so much greater.  There is just no price you can put on having that level of control over your own data. It's the initialization, setup, prep work and integration that takes the most time and expense but once EDI is up and working it should be all gravy after that. If your EDI system was setup correctly, it will run automated and unattended and if it doesn’t then it wasn’t done correctly. 

I have setup seven EDI systems from scratch.  All with 12 or more customers trading four or more documents each.  I still support all of them, remotely I might add, to this day.  EDI, if done right, is only a full-time job at the on-set…after that, it’s an outsourced piece of cake!