Electronic Data Interchange (EDI) is a type of digital system that facilitates the exchange of common business documents, such as purchase orders, invoices, inventory levels, and shipping notices, between computers. It is capable of transferring business documents and data across multiple technology platforms and programs. Labor-intensive supply chain communication methods such as phone calls, faxes or paper mail can now be replaced with EDI. EDI brings producers, suppliers and sellers together through their information systems in a global business-to-business configuration.

All of your company’s information is usually stored in an enterprise resource planning (ERP) system, such as sales, inventory levels, invoicing and shipping information, and so on. When your EDI solution is connected to your ERP system, it gets access to the data and documents you need to do business with other companies.

Your suppliers and customers also have specific policies on how to operate. Delivery addresses, prices and other information must be taken into account when processing orders. EDI solutions share this information to improve coordination between companies in the supply chain.

EDI uses shared data standards to ensure that the data formats of different trading partners match. This helps trading partners avoid confusion and errors during order processing, invoicing and other transactions. If two trading partners use different data standards, the EDI system facilitates communication by performing data transfer. When communication between two partners is initially established, the corresponding fields in the information systems of both trading partners are mapped to each other so that information can be shared reliably. When data is sent, it is automatically translated to match the data format used by the recipient’s system.

The main advantage of EDI systems is very efficient communication. Manual supply chain communication management is too slow and error-prone for modern companies. EDI solutions replace many manual processes with faster and more accurate automated transactions. With the EDI solution, incoming orders are created automatically without user input. There are no interruptions from working across time zones or training new employees. Eliminating faxes and paper documents improves cash flow, speeds up the buying-selling cycle, shorter delivery times and compacts inventories.

Kuten muutkin yritysohjelmistot, kuten ERP-järjestelmät, joita aikoinaan käyttivät yksinomaan suuryritykset, EDI-ratkaisut ovat laskeneet hinnat ja päässeet pienten ja keskisuurten yritysten käsiin. Toisin kuin ERP-ohjelmistot, suuret kauppakumppanit voivat kuitenkin asettaa EDI:n edellytykseksi, ennen kuin toinen yritys voi liittyä sen toimitusketjuun. Siksi mahdollisuus käydä kauppaa näiden suurten yritysten kanssa on EDI:n käyttöönoton suuri etu.

EDI-ratkaisut lisäävät yritysten kesken jaetun tiedon luotettavuutta ja tarkkuutta. Kun manuaaliset viestintäprosessit on minimoitu ottamalla käyttöön EDI, yritykset huomaavat virheiden vähenemisen ja tietueiden päällekkäisyyden. Tietojen siirtäminen suoraan oman ERP-järjestelmän ja kumppanisi välillä varmistaa, että tiedot ovat tarkkoja ja kumppanisi vaatimusten mukaisia. Tämä johtaa rikastuneisiin suhteisiin kauppakumppaneiden kanssa ja vähemmän myöhästyneisiin siirtoihin tai kalliisiin takaisinperintöihin.

Automatic creation of sales orders, invoices, shipment reports and so on makes the work simpler and easier for sales and warehouse staff. EDI solutions grant access only to authorized users and produce audit trails to track usage and monitor data security. Integrating an EDI solution into an ERP system can bring other benefits, as the integration enables the automation of additional business processes.

For the reasons mentioned above, companies interested in improving supply chain efficiency, agility and ROI should explore EDI technology.