Suppliers, distributors, manufacturers and 3PLs, are often required by their trading partners to use an EDI solution. This is done in an effort to standardize the flow of electronic documents between systems. EDI acts as a common language which allows the sender and receiver of documents like purchase orders and ASNs, to use the same formats, standards and communication methods. Seeing that both supplier and retailer are likely to have a unique setup and/or ERP system that reflect the company’s internal structure, the EDI process is basically stands as the middle man, making sure both parties are on the same page. This helps to ensure successful shipping and smooth delivery of products and goods.
What Exactly Are The Benefits of an EDI Solution?
The benefits of EDI can affect a wide scale of factors that should be taken into account in every business’s operations. Firstly, EDI improves accuracy, reduces manual data entry and the filing of paper work. This leads to a company having a greater outcome with it’s resources and time. Using a reliable system reduces process cycle time and lead times. It reduces cost, which is a driving factor of a business’s operations. By reducing postage and handling costs, form printing costs and inventory carrying costs, a company can save on each shipment. With all these factors, satisfied trading partners might directly and indirectly see an increase in orders and sales.
For all the reasons above, the EDI solution alone has worked for some time, since it’s filled the gap to smooth out the communication process. But now, the industry is now demanding more to increase efficiency as much as possible. Both parties want visibility, tracking, speed, transparency and no penalties in the process – AND they want ease of use.
The Advancements of EDI in 2017
Where does that leave EDI? Well, there are a few options the industry is looking to. One-stop-shop platforms and softwares have begun to surface in recent years with the industry’s demand. While these solutions are shiny and all encompassing, the cost of their service is at a premium. The platforms also tend to offer bells and whistles that many companies are not in need of. As far as cost efficiency, and annual profit, this may not be the ideal solution. Naturally, traditional EDI providers have also begun to step up to the plate, increasing their platforms’ integration abilities, through application programming interfaces (APIs). With this solution, a company doesn’t need to scrap their existing ERP system, and EDI acts as a plugin. The benefits include increased compliance, reasonable pricing and stronger customer service. A new wave of EDI integration is here and forecasted to be the foundation of supply chain data communication.
Looking for an EDI solution? Feel free to contact us . Our EDI Analysts will be happy to chat with you and answer all of your questions.