Switch to a VAN that can!

Switch to a VAN that can!

Switching VAN providers is easy with Data Interchange

EDI is the nervous system of many manufacturing supply chains. When it is works well, it hardly merits a second thought; however, if it starts breaking down, serious issues can arise. Degradation can be slow and imperceptible, making it hard to tell whether performance is as it should be.

Many companies have a sense of dissatisfaction with the performance of their current VAN (value added network) provider, with some justification. They will often have been with the same VAN for many years, although the VAN itself may have changed radically. There is a feeling that the huge consolidation in the industry has led to a degradation of service, increased and increasingly complex pricing and general complacency among service providers.

Businesses often view a VAN the way consumers see phone companies or banks – it’s perfectly possible to shop around for a better service or a cheaper deal, but it can seem like a lot of trouble. However, not all VANs are the same and changing provider is quite easy – the new provider does all the clever stuff.

So why would you want to change provider and what should you be looking for?

Transparent pricing

Charging mechanisms can be complex – there may, for example, be a charge for the message ‘envelope’, then charges based on the size of the messages within the envelope, often according to complex rules. There could be further fees for the ‘complexity’ of the message collection, or the number of destinations. This may be on top of standing charges or membership fees and surcharges if traffic exceeds pre-agreed volumes.

This complexity means that companies have little insight into their costs until they receive unexpectedly large or additional invoices. The sums can be significant; many VAN users will be generating £100,000-£200,000 of traffic a year. Even quite small suppliers can be large EDI users, such as those in the automotive sector, and an unexpected 10% surcharge is often significant.

Not unlike the mobile phone sector, where competition has driven simplified pricing, some providers in the VAN world, Data Interchange being one, now work on a simple rate based on data volume, with a pre-agreed extra rate if the company exceeds its allowance. Of course, it also helps if the VAN provider makes it easy for the user to see what volumes they are generating – Data Interchange’s Dinet dashboard view is one such option for increased visibility.

Reliability of service 

Pricing opacity, though, pales into insignificance compared with the effects of service problems. While an invoice or payment being delayed, or going missing, is annoying, if an operational message such as an advanced shipping notice (ASN) doesn’t get through, it is a potential line-stopper. An automotive OEM, for example, may call on very specific parts for delivery to a precise line-side position and point in the sequence. The supplier may have a 30-minute window to post an ASN confirming that the part is on its way. Without the ASN, the vehicle must be pulled from the assembly line. The supplier will be de-merited and is likely to have supplier evaluation teams on the case; repeat offenders face blacklisting from future contracts.

There will also be financial penalties. One of our customers, a supplier to a UK car assembler, faced having £1.25 million in payments withheld because messages such as ASNs were not getting through. Fortunately, we could prove that the data had successfully been interchanged with the OEM’s (different) VAN and that the problem was, therefore, at the OEM’s side...but many VANs would struggle to provide that evidence.

High quality customer service

Service matters in other ways. Is your VAN there for you 24/7? Does the helpdesk have deep technical knowledge, or are they working in an offshore call centre from a computerised script? How quickly and easily can your VAN provider change your connections, or on-board a new connection? These are all important differentiators.

Transparent pricing, reliability of service and first-rate customer service. If your current provider can’t make these things easily visible and understandable to you, don’t assume that ‘they’re all like that’ – start looking for a VAN that can! A good starting point could be a chat with Data Interchange…


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