EDI Service Provider
How EDI Can Benefit Logistics & Supply Chain Operations?
We have entered the age of
automation. The more you automate your business, the more significant the
benefits. In today’s challenging multi-channel business environment, retailers,
manufacturers, and logistics providers must analyze and share the collaboration
on orders, invoices, shipping, catalogs, pricing, and other mission-critical
information faster and more accurately than ever before.
Globalization has increased the
opportunity of export and import that has ultimately increased the growth for
thousands of companies.
The world market runs on products
and services conceived outside of their territory. A product produced thousands
of kilometers away can be competitive when compared to others in the country.
Any strategy or planning involving the logistics and the supply chain phase
needs to take into consideration. Hence, operations such as stock management,
shipping to suppliers, invoice payments, or order processing have become easier
through Electronic data interchange (EDI) and to integrate these solutions
business owners are actively looking for companies that offer proficient product engineering services, to accomplish their objective.
Let us know in detail about:
Electronic Data Interchange (EDI)
EDI is intended to facilitate the
computer-to-computer exchange of data among multiple business trading partners.
EDI solutions have been around for roughly 50 years, originally
developed by the U.S. transportation industry to standardize electronic
transactions between vendors and customers. The major benefit is that it is
entirely paperless and requires no human participation and ultimately saves
businesses countless dollars. Incorporating EDI solutions into the business
eliminates the repetitive cost-, labor- and time-intensive tasks such as
purchasing, printing, processing, and delivery of paper documents. EDI allows
B2B businesses to transact together electronically. It also helps businesses,
irrespective of its size, with any kind of technical and business requirement,
and provide support and resources to manage.
How EDI Can Transform Supply Chain Management
EDI is useful for efficient and effective supply chain management because it can help reduce lead time, save documentation processing cost, eliminate procurement errors, clarify inventory status information, and enhance strategic alliances throughout the supply chain.
The common documents EDI
facilitates in the supply chain: -
- Orders
- Order Acknowledgements
- Order Amendments
- Shipment Notifications
- Invoices
- Remittance Advice
- Requests for Routing Instructions
- Routing Instructions
- Organizational Relationships
- Commission of Sales Reports
- Planning Schedules w/ Release
Capability
- Price/Sales Catalogs
- Requests for Quotation
- Specifications/Technical
Information
Read Also: Know
Different Types of EDI Services and Which One Suits Your Business Better?
Let us see how EDI can
transform logistics and supply chain management:
Real-time Transactions
EDI helps in real-time
transactions between trading partners and eliminates redundant, time-consuming,
and error-prone tasks from the equation.
No Human Intervention
Generally, the transactions
handled by humans get lots of errors as this tends to be manual work which at
times may lose focus and results in errors. EDI software solutions
eliminate those risks since all information is exchanged electronically and is
accurate which results in faster confirmation.
Cost and Time Savings
Processing of paper documents such as printing, copying, delivering, filing, storage, and postage, to name a few, all incurs cost and additional time. EDI solutions comparatively take seconds for the same task which is done in hours with a paper-driven procedure.
Reduced Waste = “Greener” Business Practices
The paper-based process is a
great loss to the environment as this requires cutting down multiple trees.
Hence, EDI services can be called ecosystem-friendly.
Streamlined Communication Between Trading Partners
EDI helps in enhancing sales
partners and customer relationships. Through this, sales cycles are shortened,
orders are taken and confirmed more rapidly, and customers gain more confidence
in your ability to deliver superior service.
Real-time Updates
Real-time updates help in
multiple ways, it helps in time-to-time updates of inventory and the stock. It
ensures companies can meet immediate demand as well as optimize stock levels as
per the demand.
How EDI can Transform Logistics Sector
EDI software allows
communication between the different supply chain stakeholders based on a common
language, set by global standards. EDI is a data communications system that
helps the communication of data and compliance requirements between the client,
the vendor, and the distributor flow smoothly. It provides information in
real-time that can avoid delays in the processes involved in dispatching and
receiving products as well as transporting them to storage. EDI document is
assigned in EDI public format to one of several transaction numbers. This
allows logistics
and supply chain providers to improve the overall order data transfer
process and the seamless automation of B2B workflows between both internal and
external systems, applications, and cloud ecosystems.
EDI transmission is widely used in the logistics sector by.
- Exporters
- Freight Forwarders
- NVOCCs
- Customs Brokers
- Exporters
Manufacturers or exporters
receive a purchase order from their client through email, which is an EDI mode
or they may utilize an EDI system with the UN/EDIFACT standards.
Freight Forwarders
Freight forwarders prepare
shipping documents. Invoices and Packing Lists are prepared by the exporters
and sent to the freight forwarders to prepare a shipping instruction and a
House Bill of Lading. Freight forwarders also need to submit a cargo manifest
for every bill of lading issued. Freight Forwarders use the EDI systems in
place to submit a cargo manifest.
Customs Broker
A customs broker is a mediator
between the customs officer and cargo owners. They submit custom declarations
for any item imported or exported to-and-fro the country. Customs brokers use
EDI systems that transmit a different array of data for a different audience
altogether. Also, the customs officers use the transmitted EDI information to
run risk assessments on the cargo transported.
NVOCCs
NVOCCs submit shipping manifests
to the customs officers via an EDI EDIFACT standard (CUSCAR).
UN/EDIFACT offers data
standards for:
- Booking Requests
- Booking Confirmations
- Shipping Instructions
- Shipment Status
- Verified Gross Mass
The Future of Electronic Data Interface
Any logistic company looking to
integrate EDI
software solutions is on the right path of growth and may find further
benefits by investing into such solutions. The world is changing and with it
the future of EDI. EDI is pretty popular in the supply chain industry, with
somewhere between 59 and 85% of companies adopting this technology. The
presence of the internet is stronger now than it’s ever been, and businesses
are becoming more tech-savvy every day. This increases the enhancement in the
use of EDI in the companies. However, this data also depicts that 41% of the companies
are still using manual solutions. Hence, there are a lot of opportunities for
the EDI to make its place in this industry.
EDI will be the core document
exchange capability to support innovations like the Internet of Things (IoT),
blockchain, and artificial intelligence (AI). EDI replaces the paper exchange
and maximizes the efficiency of electronic consistency. Now it is on you, how
you utilize the efficiency of EDI by integrating it into your daily
processes.