It has become increasingly apparent that EDI software has become a key aspect of the supply chain industry. Some are convinced that EDI and supply chain are one of the best technology combinations and even play a critical role in driving global e-commerce. 

It is likely that the EDI software benefits bring about in the supply chain are the reason behind these claims. If your business mainly uses non-EDI exchange and wants to have a better idea of what EDI technology can offer, this article is a great start.

But first, let’s go over the basics again.

What is EDI?

EDI stands for Electronic Data Interchange. It is an electronic data exchange between two business entities that:

• Must comply with a standardized format
• Involves little to no human intervention
• Involves business documents like invoices or purchase orders (POs)

Many businesses have left behind those days of lengthy and cumbersome manual processes, which are both error-prone and more costly in the long run. The time and money saved due to the automation and improved business cycle have allowed businesses to focus more on strategic objectives – one of the many reasons that allow them to thrive in today’s extremely competitive market.

EDI benefits in the supply chain

By now, you probably have noticed that the nature of EDI is the exchange of electronic data. You are probably wondering, too, what the real difference between EDI and emails, or faxing is. Why not just use the traditional known tools if they can deliver the same result? Let’s first go through the disadvantages of the traditional means and then see how EDI taps in to rescue.

• The traditional processes are slow. 
• Manual data entry is extremely error-prone
• Going back and forth to fix the errors is time-consuming and in a lot of cases, costly.
• The errors caused by humans can cause delays/ disruptions.
• Manual data entry is time-consuming because the same fields are manually entered repeatedly.
• It is difficult to manage data, especially in long, old email threads.
• Thus, it is more difficult to manage relationships with bigger clients.
• Differences between the order and shipping data are common.

When it comes to EDI, it clearly and strictly states where each piece of information should go – then translates such information into the internal document format. The whole process is done automatically, eliminating a huge number of redundant steps. Automation in itself is already a benefit. Now, let’s go through the remaining merits.

Saved time and money

As mentioned earlier, one major EDI benefit is reduced error thanks to significantly reduced manual data entry. There is less and less back-and-forth correction between businesses, saving both parties plenty of valuable time and money. Additionally, the complex regulations are complied with smoothly, minimizing any unwanted violations, performance gaps, or disruptions. The many hours saved due to eliminating paper-related tasks such as printing, scanning, storing, and delivering are used toward more important strategic objectives.

Enhanced end-to-end visibility

In today’s extremely competitive global e-commerce market, owning end-to-end real-time visibility into your supply chain is crucial. EDI will provide you with this much-needed visibility. To be specific, the audit trailing features provides businesses with transparency, allowing supply chain companies to be improved on all fronts.

Furthermore, EDI integration into other systems like WMS or ERP allows for better traceability and reporting. The connectivity of electronic documents with the IT system assists in real-time data collection, data analysis, and generating reports. As a result, companies have real-time information regarding their inventories. Businesses will be given the capability to manage the resources more effectively to prevent understocking or overstocking to avoid any unwanted additional costs.

Better security

When EDI software is in place, businesses can feel safe and secure. To begin with, the software offers only restricted access to authorized users to make sure no false messages are exchanged. Then, EDI software is built with the assurance of security in mind: the messages are encrypted during the transmission. Lastly, EDI software typically includes features like archive tracking and audit trailing. 

Improved speed

With EDI, the business cycle accelerates dramatically thanks to automation in the processes. Instead of the hours, it takes for the information to arrive while using traditional means, EDI only takes a few seconds to hours to finish. Another EDI benefit worth noting that comes with the improved speed is the increased data volume. Once again, a lot of time is saved, providing you and your business partner with more financial options.

Boosted productivity

Because of the enhanced end-to-end visibility, improved speed, and reduced errors, more document is processed in a shorter amount of time. Therefore, efficiency and productivity are enhanced substantially.

Less waste/ environmentally friendly 

The paperless exchange EDI offers save plenty of paper and do the environment a huge favor. Moreover, greener business operation is an increasing trend.

Better partner and customer relationships

The streamlined and highly effective processes benefit your relationship with your trading partner as you deliver prompt responses and accurate documents. EDI software also allows you to make much more confident decisions.

Every advantage you gain while using the EDI software system ultimately translates to the final product and service your customer receives. It is prompt deliveries, quick responses, and reliable information about shipments. As a result, you gain positive feedback and loyal customers.

Last note

In conclusion, EDI software benefits will give you a competitive edge, from saved time and money, enhanced real-time visibility, improved speed to boosted productivity, better security, and greener business operation to the ultimate goal: healthy, strong, and lasting relationships with both your customers and partners. Now that you have understood the many benefits of EDI software, perhaps it is time you get up and start investing in this technology for your business. Do not worry about all the tedious processes, let SCS Solutions help you. Get in touch with us via https://www.scssolutions.io/, Linkedin, or Facebook. We cannot wait to hear from you.