Unlocking the Strategic Potential of EDI

By Karen Puchalsky, Innovate E-Commerce

Today companies are exploring various emerging technologies to stay competitive, streamline operations, and enhance customer experiences.  Some of these new technologies include Artificial Intelligence (AI), Internet of Things (IoT), and Robotics.  Other initiatives are supply chain visibility, reverse logistics, and building more resilience in their supply chain.  Data must be at the center of any solution.  However, this data must also be reliable, secure and standardized to drive true value.

Armed with this data, organizations can more effectively uncover patterns, and insights into operational efficiency.  A reach LeanDNA survey in collaboration with Wakefield Research revealed startling inefficiencies in the supply chain. For example, supply chain professionals spend nearly 14 hours per week (almost two full workdays) manually tracking data.

A starting point for accurate, secure, and reliable data is electronic data interchange (EDI).  EDI is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders, advance ship notices, and invoices.  EDI has existed at least since the early 70s.  In 1996, ANSI X12 standards for EDI was created to facilitate parties transacting such instruments without having to make special arrangements.

The old expression “If it isn’t broken, don’t fix it” rings true in many aspects of our lives. This is even more relative when it comes to EDI.  Many companies do not see it as a way to be more competitive, but rather only implementing the documents their customers require.  While this may improve customer relationships, companies do not reap the full benefits of EDI.

However, new technologies and initiatives rely on accurate and timely information to obtain their full benefits.  EDI is evolving to adapt to modern business needs by integrating it with newer technologies to increase efficiency, scalability, and accessibility.

By replacing manual processes and integrating more EDI documents, businesses can track shipments, monitor inventory levels in real-time, and receive automated updates when key milestones are reached, improving decision making and reducing delays.

As you review your organization’s strategy for 2024 and plan for 2025, look for opportunities to improve efficiencies that more timely and accurate data would provide.  If your strategy includes reducing inventory costs, implementing warehouse documents with your third-party logistics (3PL’s) and/or warehouses or your transportation carriers, EDI enables real-time communication of inventory levels, stock movements, order statuses, and shipment status, facilitating better control over inventory.  EDI helps prevent stockouts or overstock situations, allowing for optimized inventory management and more accurate demand forecasting.  EDI provides real-time visibility into the status of shipments, inventory levels, and order processing.  This improves decision-making, as warehouse managers can track inbound and outbound goods, enabling proactive problem resolution and negating the risks of supply chain disruptions.

This is just one example of how EDI can add value, efficiencies, and reduce errors and costs to your company’s strategy.

Key takeaways when you are creating your strategy plan:

• Look for ways to leverage EDI to reduce manual processes.
• Determine where you can implement EDI into your current processes to receive more timely and accurate data.
• Don’t think of EDI as old technology, but as a way to become more competitive and improve the visibility in your supply chain.
• Leveraging real-time data utilizing EDI can provide more benefits to your overall strategic plan.

Innovate E-Commerce specializes in Managed Services, Secure File Transfer, InVaultive, and Supplier Toolkit.  Innovate connects companies supply chain moving order to cash documents electronically between their customers, suppliers, logistics, banks and other third-party providers.  https://innovateec.com/