With origins dating back to the 1960s, electronic data interchange has been a key element in business-to-business communication for decades. But for many companies, the popularity of EDI hasn’t spelled the end of paper documents and time-consuming manual processes.
Pearhead had a standalone EDI system in place, but a lack of automation and integration with other systems was hampering efforts to achieve inventory and order visibility.
Pearhead was founded in 1999 by college roommates Tom Sakaguchi and Ken Berlin. They launched with just one product: a two-sided picture frame for baby and pet photos. From there, they quickly expanded into a global lifestyle and gift brand spanning multiple sectors.
Today, the company offers more than 800 products in the baby, pet and wedding categories. They’re sold in more than 1,000 retail stores in 13 countries, as well as in online marketplaces and through a branded Pearhead web store. Amazon.com accounts for around 30% of business, with the balance of sales occurring through big-box retailers and smaller boutique shops, according to Lennie Diyco, director of warehouse and logistics.
The added complexity brought with it additional headaches, much of them related to gaining control over inventory and order management. In particular, the company lacked integration between its entry-level EDI system and enterprise resource planning (ERP) platform from NetSuite. The gap was causing persistent supply-chain issues, especially access to real-time data, as Pearhead struggled to keep products flowing to some of the world’s largest retailers.
At the time, Pearhead was relying entirely on its third-party logistics provider for inventory and order-management data. “That made it difficult to track inventory, or even know how many orders we had open,” says Diyco. “Plus, if something happened at the 3PL, we’d completely lose access to all that critical data.”
Pearhead even lacked basic sales data. “Potentially, we could look at monthly sales,” Diyco says, “but not with a dollar figure attached to it.”
Curse of the Spreadsheet
The old system relied on Excel spreadsheets and a substantial amount of manual entry by one individual at Pearhead’s office in Brooklyn, New York. “Nothing was automated,” Diyco recalls. “Every order had to be manually processed and entered into NetSuite. The previous EDI system had no platform to integrate inbound purchase orders into our ERP at all.”
As the company grew, it began experiencing chargebacks for late advance shipping notices (ASNs) and labeling issues. “The big-box retailers were trying to get data from us, and we weren’t able to do it in a timely manner,” says Diyco. For product shipped on Friday, the corresponding ASN didn’t get sent out until Monday, because the person responsible for entering data didn’t work weekends.
For Pearhead, the answer to the dilemma lay in adoption of TrueCommerce EDI for NetSuite. TrueCommerce, Diyco says, “was the best-fit integration with NetSuite based on our research.”
The move allowed Pearhead to rely on the NetSuite ERP for managing inventory and sales. That capability had previously existed, Diyco says, “but it wasn’t being utilized how it should have been.” Now, for the first time, the company had direct access to sales and inventory data.
Ross Elliott, president of TrueCommerce, says the Pearhead engagement was part of his company’s effort to expand behind the role of a traditional EDI provider into that of a “commerce network.” In addition to enabling standard EDI messaging, it can now tie into marketplaces such as Amazon, as well as multiple logistics systems, via a single framework.
The integration between TrueCommerce EDI and NetSuite has given Pearhead real-time visibility into open orders, inventory and payables. The company can access EDI transactions in the ERP in a matter of seconds, and generate outgoing documents automatically from the same system.
“Our turnaround on EDI orders is now within minutes,” says Diyco. “When we receive POs, they export directly to NetSuite. Almost immediately, we can run a report to see if we’re short stock on anything. A few minutes later, we can release the order to the 3PL.”
Having previously worked for a 3PL, Diyco had knowledge of both sides of that crucial logistics partnership. And he had spoken with other companies that had employed the NetSuite and TrueCommerce partnership. The latter, he says, “was very supportive — hands down, the best I’ve ever dealt with. They had working knowledge, and understood our customer’s demands and needs.”
A Phased Implementation
The integrated system was phased in first for Pearhead’s most valued retail customers. Partners such as Amazon and the Buy Buy Baby chain of stores were especially challenging to bring on line, Diyco says, “because of the sheer volume of data going in and out of the ERP system.”
Because it was selective about bringing customers into the system, Pearhead took around 18 months to implement it in full. Testing was essential. “Customers felt they had already gone through that with our previous EDI provider, and we didn’t feel comfortable just going live and seeing what happens,” Diyco says. “We wanted to make sure we had everything correct.” In addition, the company took care not to carry out the implementation during the busy holiday season.
Pearhead has seen a marked improvement in operations since adopting the system. “Self-inflicted” chargebacks for late ASNs have been virtually eliminated, says Diyco, who recalls just one instance of a late EDI message on the warehouse side — “nothing to do with TrueCommerce.” With Amazon, Pearhead has boosted its on-time score for relaying ASNs from 46% to 91%.
Pearhead has also been exploring other options within the TrueCommerce software, including a customer-mapping tool. “We’re very satisfied with what we have,” says Diyco.
And what happened to that individual in Brooklyn who had previously been responsible for making all those manual entries? “Right now, nobody knows,” says Diyco. “She’s moved on to HR functions.”
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