Wholesale companies have a lot on their plate. Managing a mountain of tasks at a time can be a nightmare. Nonetheless, with the help of EDI in wholesale, things will flow a lot smoother.
What is EDI transaction?
EDI is an acronym for electronic data interchange. EDI refers to the business document file exchange between two businesses using pre-determined standards, including EDI communication protocols and EDI transaction codes. Common EDI files are purchase orders, advance shipping notices and invoices. Even though EDI has been around for decades and even deemed an “old technology” by some, it is still trusted, widely used, and required in many industries.
EDI transaction refers to the documents exchanged between trading partners. To be more specific, it is when a company wishes to send an EDI order to another business. Even though each transaction is standardized, they are still considered to be independent of the communications or technology that is used to send and receive the data.
Standardization in EDI transmission brings about numerous benefits. It does not matter where or how the company operates, as long the documents are EDI compliant, the crucial pieces of information can be found easily. Standardization is one of EDI’s most significant features.
You can find EDI being utilized in industries such as:
- Automotive Industry
- E-commerce Industry
- Retail Industry
- Finance Industry
- Supply chain industry
EDI in wholesale – reasons why it is worth considering
EDI is widely considered one of the must-have technologies in retail, healthcare, and supply chain. However, why does it even matter in the first place? Does your business stand to gain any advantage from this seemingly decade-old technology?
The short answer is yes. EDI in wholesale has and will continue to play a significant role in a number of industries. Its presence is widespread for good reasons.
EDI helps you manage tasks
Wholesalers have a lot on their plates. Without the help of technology, it could be nightmarish to handle tasks like:
- Manage products standards
- Resolve problems that arise during production
- Work with suppliers
- Onboard partners quickly
- Send and receive invoices
- Provide information regarding shipping
With plenty of daily tasks to manage, EDI becomes a powerful tool, taking away the burden of meticulous everyday tasks. Even more powerful than EDI itself is modern EDI solutions, which consist of all the features of both classic EDI and the ability to integrate into the modern business ecosystem.
EDI fosters efficient connectivity
No matter the industry, communication is key.
Effective communication fosters strong relationships based on mutual understanding. It also allows for transparency, credibility, and more business opportunities.
EDI in wholesale plays a big role in establishing efficient communication between parties. Utilizing EDI allows wholesalers to enjoy direct and speedy communication with their clients and business partners globally. Gone are the days of relying on an unstable internet connection, lengthy phone calls, or chains of never-ending emails. EDI in wholesale creates vital business ecosystem links.
When it comes to EDI in wholesale, your provider should be able to meet the following demands:
- Offering you a variety of EDI connections and protocols, enabling you to connect with practically any trade partner.
- Automating end-to-end EDI data transmissions.
- Having an audit trail so you can trace back should any issues arise. The system should have a record of every action taken during the transaction. It will be much easier for the operator to find the roots of the problem without wasting time and energy to trace back every single process and detail of the data exchange.
EDI ensures accurate data
By integrating into your digital information management systems like ERP (enterprise resource planning) or WMS (warehouse management system), EDI improves data accuracy significantly. There is no longer the need to manually pull data from different platforms, which easily causes inconsistencies due to human errors. Frankly speaking, it is almost impossible to completely avoid mistyping, misreading, or entering the data in the wrong field. Switching from one platform to another makes the process even more error-prone.
For that reason, having your data centralized ensures accuracy and consistency, eliminating expensive errors and the time-consuming process of going back and forth to find and fix errors. Moreover, with all the time saved thanks to the automation, you and your team have the time and space to analyze and keep track of the newest data. Access to updated data is valuable, allowing you to make timely adjustments in the operation or overall strategy.
EDI reduces operational costs
EDI in wholesale is cost-efficient. There are a number of reasons supporting this claim.
- As mentioned earlier, EDI automates end-to-end processes, saving time and labor costs.
- The data accuracy contributes to the fact that the SLA is met, minimizing chargebacks. Individually, chargebacks seem minor. In the long run, however, they are extremely expensive.
- With fewer errors and more automated processes, it is less likely that there will be disruptions in the process causing downtime.
- EDI helps process documents quickly and efficiently, which also means that more orders can be fulfilled.
- Time is freed up, allowing you and your team to focus on value-driven relationships.
EDI keeps you competitive
By now, it is clear that EDI is beneficial for your business operation, saving money and time in the long run. However, EDI in wholesale also gains you a competitive edge since it modernizes your EDI solution, enhances your business strategy, and offers improved customer service.
Upgrading your supply chain
One of EDI’s biggest positive impacts on your supply chain is the system’s modernization. Modernization is not solely about the newest technology or the latest technology trend. It is more about whether you and your team have the ability to handle modern business requirements: to handle the multi-layers of requirements, ever-changing industry standards, and other company-specific demands.
Having modern EDI solutions enable your business to:
- Carry out speedy onboarding processes
- Gain enhanced supply chain visibility via dashboards
- Handle EDI and non-EDI files
- Quick integration without any coding needed
In short, EDI in wholesale keeps you ahead of the game and improves your overall workflow.
All in all, EDI in wholesale constantly pushes your business to be better
As mentioned previously, EDI frees up time and space for you to focus on value-driven relationships and strategic objectives, like scaling up your business. There are several reasons supporting this idea.
- Valuable insight and real-time data provided by dashboards allow you to make more confident decisions.
- Faster and more efficient communication fosters trust, a stronger reputation, and from then, more business opportunities.
- You no longer need to worry about scaling your business when the number of orders surges unexpectedly. EDI helps you accommodate all your needs even during the busiest times of the year.
- While EDI helps you cut down on time and money, it also helps you cut down on waste. Without paper documents, you are doing the environment a huge favor.
Better customer service, more opportunities
It really is about your customers. Remember: happy customers, happy company.
With EDI, your response time is shortened dramatically, and your client’s requirements and deadlines are met. Constantly meeting your client’s expectations establishes a strong reputation for your business. Consequently, major companies would also be more willing to conduct business with your team and win you more business deals.
EDI transaction codes in wholesale
Below is a list of some frequently encountered EDI transaction codes in wholesale.
- EDI 810 – Invoice
EDI 810 is sent from the vendor to the buyer to specify the costs owing and demand payment in accordance with predetermined conditions.
- EDI 830 – Planning Schedule/Material Release
This EDI transaction set, which describes anticipated needs for a given time period, is typically sent by a manufacturer to one of their vendors or suppliers.
- EDI 840 – Request for Quotation
Buyers utilize the electronic data exchange code EDI 840, commonly referred to as a Request for Quotation, to request pricing, delivery, and other details from prospective sellers or suppliers.
- EDI 850 – Purchase Order
An electronic data interchange transaction set known as an EDI 850 comprises information on an order
- EDI 855 – Purchase Order Acknowledgment
An EDI transaction set known as an EDI 855 Purchase Order Acknowledgement is often issued by a seller to a buyer in response to an EDI 850 Purchase Order. The document notifies the buyer if the purchase order was approved, refused, or needed adjustments in addition to verifying the receipt of a new order.
- EDI 856 – Advanced Ship Notice
An essential and commonly used EDI transaction involving suppliers, distributors, manufacturers, and retailers is EDI 856, often known as an Advance Shipping Notice or ASN. Just as the name suggests, it is used to inform them about a future shipment.
- EDI 860 – Purchase Order Change
Buyers can utilize the EDI 860 to validate that modifications to purchase orders issued by the supplier are acceptable.
- EDI 861 – Receiving Advice/Acceptance Certificate File Format
Typically, the 861 contains details regarding whether a cargo was received in full or in part, whether there was a mismatch between what was delivered and what was received, and whether any products were damaged during the shipping process.
- EDI 940 – Warehouse Shipping Schedule
Remote warehouses are given instructions on how to ship orders via the EDI 940 Warehouse Shipping Order transaction set.
- EDI 943 – Warehouse Stock Transfer Shipment Advice
Manufacturers and distributors employ an EDI 943 Warehouse Stock Transfer Shipment Advice as part of their electronic data exchange (EDI) with remote or third-party warehouses.
- EDI 944 – Warehouse Receipt Advice
An EDI document called EDI 944 Warehouse Stock Transfer Receipt Advice is used by distant warehouses or third-party logistics providers (3PLs) to verify the receipt of a shipment.
In conclusion, EDI in wholesale is an extremely powerful tool. It facilitates numerous daily tasks and brings about major benefits for the wholesaler. If you are looking for a modern EDI solution and are not sure where to start, let SCS Solutions help you. Contact us via our website https://www.scssolutions.io/, Linkedin, or Facebook.