Vital Farms revamps its IT infrastructure by adopting Oracle NetSuite and TrueCommerce.
By Yegor Kuznetsov
In food business, fight for shelf space of major grocery chains is fierce. Either the produce is there, or it is not.
Vital Farms has definitely emerged as a winner: its products have claimed the coveted positions in the food isles of such dominant industry players as Amazon’s Whole Foods. In partnership with over 100 small family farms, this highly successful food supplier has quickly become America’s largest producer of pasture raised eggs and butter, and is recognized as an industry leader in humane egg production.
Facing the growth challenges
Rapid growth prompted Vital Farms to revamp its IT infrastructure by adopting Oracle NetSuite – a dynamic ERP system. The goal was to turn it into a hub to support and automate numerous internal process and external add-ons, such as Electronic Data Interchange (EDI) system, a necessary extension to connect with trading partners and do business in every direction.
The process turned out to be a challenge.
Vital Farms selected an EDI system that seemed to be a go-to solution, but after almost two years of implementation efforts, they still could not achieve an acceptable integration level with the company’s new NetSuite ERP environment.
As a result, Vital Farms’ small Accounts Receivable department was forced to manually process an increasing volume of customer purchase orders (POs) and invoices—wasting precious time, introducing costly errors and incurring significant chargebacks from major grocery retailers.
Adding a functioning EDI spoke to an ERP hub is a challenge for many organizations. For example, Cali Bamboo, a leading provider of sustainable, high-quality building materials, also faced the EDI integration challenge. Lack of seamless integration with big box retailers was the key issue – the legacy EDI system did not cope.
Eyebobs, a leading provider of eyewear, faced the same obstacle: the legacy EDI was not compatible with its new cloud-based NetSuite implementation.
Expanding NetSuite horizons with Cloud-to-Cloud EDI integration
Examples from the field show that solution to these issues lies in an agile cloud-to-cloud integration between Oracle NetSuite ERP and a proven EDI platform.
Vital Farms decided to search for a replacement EDI solution that was easier to use, backed by solid customer service, and could integrate seamlessly with NetSuite to eliminate manual pain points.
After evaluating several vendors, Vital Farms chose TrueCommerce.
“As soon as we got going with TrueCommerce everything just came together and our new, integrated EDI was up-and-running in just over a month—as promised, which was awesome!” reports Ms. Theresa Owens. “Now everything we’d been doing by hand is automated.”
At go-live in October 2018, the TrueCommerce EDI solution supported about 10 trading partners. Vital Farms has since added six more.
“From the time we started our implementation with TrueCommerce, everything related to EDI has been worlds easier than it ever was with our former provider,” emphasizes Ms. Owens, Vital Farms’ Controller.
Cali Bamboo took the same approach.
According to Mr. West, Business Systems Specialist “The switch to TrueCommerce was very smooth. It took less than a month to get everything set up; then another week or so to iron out all the little details and sync up EDI with NetSuite.”
The TrueCommerce integration team worked alongside Cali Bamboo all the way through the implementation process.
“TrueCommerce has been great at making adjustments on-the-fly for us,” Mr. West adds. “Just after getting EDI set up with Lowe’s, our business relationship changed and expanded significantly and we had to make a lot of changes to our systems integration very quickly. Getting that done so efficiently was a big boost for our business.”
Eyebobs also recorded new business improvements. In addition to reducing manual efforts and errors, while boosting speed and accuracy, TrueCommerce EDI enabled the company to operate at a scale and efficiency that otherwise would not be possible.
“TrueCommerce has created a great deal of efficiency, and I can’t imagine going back,” said Susannah Kyle, Director of IT with eyebobs. “It’s so integrated with our daily business processes that, today, we wouldn’t be able to process large retailer transactions with large retailers without it. It’s changed people’s’ jobs for the better.”
The Oracle NetSuite-TrueCommerce integration allowed users to support new ways of doing business in every direction, such as drop-shipping.
“We do drop-shipping of online consumer orders with all the big box retailers here in Canada,” says Adhurim Murtezai, eCommerce Manager, Cesium. “We receive these orders through a platform called CommerceHub, which shares the order data through EDI with TrueCommerce—this is how we automatically get the data into NetSuite.”
In addition to individual drop-ship orders placed online, Cesium also receives larger B2B orders from major retailers and other customers using EDI. These orders are shipped directly to the retailers for stocking in their stores.
The ability to white-label the delivery process is important for Cesium to keep its customers’ brand integrity.
“When we ship an order on behalf of a retailer, the consumer is not aware that the product came from us. We use the same packing slip, shipping method, and so on as the big box retailer,” notes Mr. Murtezai.
Cali Bamboo discovered new ways to deal with trading partners. Besides transacting with Lowe’s, the company uses the TrueCommerce solution to communicate with its two third-party logistics (3PL) providers, one on the east coast and one on the west coast. They also use EDI to transact with freight vendors.
“Every sales order or customer order that comes through our system goes to one of our two 3PLs,” remarks Mr. West. “We send orders to them and they send order fulfillments back.”
Reaping the ROI rewards
At go-live in October 2018, the TrueCommerce EDI solution, integrated with Oracle NetSuite, supported about 10 Vital Farms trading partners. The company has since added six more.
By turning EDI from a time sink into a driver for efficiency and productivity improvements, Vital Farms saves significant operational cost.
“Our business has grown exponentially in the past two years,” asserts Ms. Owens. “If we hadn’t upgraded our EDI, we would have been looking at hiring more employees to handle the growing manual work volume.”
Instead, Vital Farms’ Accounts Receivable department can now easily process approximately 350 to 450 EDI sales orders per week, about 85% to 90% of their total order volume. POs sent by EDI trading partners flow automatically into NetSuite as sales orders. As orders are fulfilled, invoices automatically go back to customers via EDI.
Eliminating manual processes has also allowed Vital Farms to significantly improve their cash flow situation.
“Now we’re able to consistently invoice customers within a day after we ship,” Ms. Owens explains. “We’ve cut our Days Receivable Outstanding from 36 days before TrueCommerce to 23 days now. I would attribute a lot of that to all the new EDI automation.”
For Cali Bamboo, the deployment allowed to gain better control over growth-driven headcount.
“For a small company working with a big box customer like Lowe’s, which has some of the most rigorous technical requirements, it’s great that we can throw technology instead of bodies at that challenge,” says Mr. Coffman, Director of Business Systems and IT, Cali Bamboo. “If we didn’t have TrueCommerce EDI we’d have to hire at least one if not two more people. Even then I don’t know if we could push things through as quickly as we need to.”
The financial benefits of TrueCommerce deployment are also substantial.
“It’s not just an ROI for our team or the headcount saved—EDI is really supporting the whole company,” says Mr. Coffman. “It’s enabling us to continue to grow and still maintain on-time SLAs with our strategic Customers and Partners… And it’s freeing us up to focus strategically on additional relationships that will allow even stronger growth in coming years.”
For eyebobs, TrueCommerce EDI is not only an operational necessity, but a financial boon – helping to both eliminate unnecessary costs and make resource planning more predictable.
Retail suppliers like eyebobs may face costly chargebacks if there are errors within the EDI transaction, which can take the form of per-transaction fees. TrueCommerce EDI greatly increases the accuracy and consistency of orders, eliminating chargebacks, and moreover, the TrueCommerce team helps to resolve issues, should they arise.
“If we have a chargeback or if something goes wrong with a transaction, TrueCommerce is always working with us to help solve it,” said Kyle.
At the same time, the efficiency and time savings that TrueCommerce creates is a huge cost savings for eyebobs.
“From a financial standpoint, the ROI is huge, compared to what we pay per month and per trading partner plugin,” said Ms. Kyle.
Leading research firms point out that laser focus on tangible results is the key aspect software houses should focus on.
“Winning in the digital economy requires that every organization deliver an exception customer experience,” says Jordan Jewell, Research Manager for IDC’s Digital Commerce program. “It is widely understood that strong customer-facing systems are essential to achieve this level of excellence, but it is just as important that employee- and supplier-facing systems are in place and talk to each other. Powered by tightly integrated ERP, EDI, and order management systems, it is much easier to exceed expectations by delivering great products or services to customers at the right time, while minimizing friction.”
Yegor Kuznetsov is a former international news agency editor and a marketing communications veteran who loves telling customer success stories. Over the last 20 years, he has been working for an array of dynamic technology companies, most recently with TrueCommerce, a global provider of trading partner connectivity, integration and unified commerce solutions.
You can reach Yegor at Yegor.firstname.lastname@example.org