Originally developed for U.S. army supply chains in the 1960s, EDI has become an integral part of modern supply chain management. Offering benefits like lower operating costs, real-time secure data exchange, and automated processes to cut down on costs associated with manual data entry, EDI is critical to efficient operations in the supply chain.
Here’s a quick rundown of just a few of the critical tasks an EDI solution can handle:
1. Inventory Management. Because your EDI solution offers real-time information, you have a better grasp on inventory levels, potential stock-outs, and inventory trends. Using this information, you can make sure you have the right amount of product in the right places to keep your partners and customers happy. You can also use an EDI solution to automate reordering, and you can see if you’re collecting too much stock so you can avoid higher inventory costs.
2. Easier Vendor Onboarding. This one comes with a bit of a caveat: not all EDI providers are created equally. Some solutions offer more and better integrations than others, so you’ll need to do a bit of research up-front when choosing an EDI provider.
That said, an EDI solution that offers a wide range of integrations and standardizes your document format to make onboarding new partners a breeze. Once connected, your EDI and your partner’s software exchange data to make communication, collaboration and ordering much less complex.
3. Optimized Processes. Because data exchange and communication is faster with EDI than with manual input, your ordering, approval, inventory management, and invoice payments can flow much more smoothly between you and your vendors. And if your EDI offers solid integration with partner systems, you can automate much of the information exchange between you.
4. Secure Data Exchange Worldwide. Using an EDI solution gives you a secure way to share data between your organization and your trading partners across the world. And with a good EDI provider, you’ll enjoy constant security updates to make sure your sensitive business data doesn’t get exposed.
5. Reduced Costs. While the up-front cost of implementing an EDI solution can be hefty, the cost savings over time more than make up for it. You’ll save on tangible costs (like printing and mailing documents to trading partners all over the world), but that’s not the only benefit. EDI also reduces manual tasks, which in turn reduces the risk of introducing human error into your transactions. Errors in manual data entry can create significant financial risks – not to mention time your team needs to sort them out.
Another “hidden” cost that EDI can reduce or solve is communication troubles between various trading partners. With standardized document formats and real-time updates, everyone can stay on the same page, leading to better relationships and improved collaboration.
Offering major benefits like faster order processing, tracking, inventory visibility and easier scalability, EDI is all but a necessity for supply chain organizations that want to streamline operations and grow – without growing pains. But it’s important to choose the right EDI provider to help you unlock all of those benefits.
If you’re ready to get started (or if you’re experiencing some of those growing pains with your current solution), reach out to us today to learn more about Octolan’s approach to EDI.