A large number of companies already use Electronic data interchange (EDI) for the transactions of business documents. EDI enables you to optimize your supply chain as it automates business transactions and provides you with more insight into your data. However, we see that in most cases not everyone is using the full potential of their EDI solution and therefore internal processes are not optimized fully. In this blog, we highlight the most forgotten functionalities of EDI and how they can benefit your organization.
EDI enables you to send all kind of business transactions with your business partners: orders, order confirmations, dispatch advice, and invoices. However, when organizations send invoices, we often see that they send PDF files. Although you could consider this as digital invoices, the process itself is not automated as you need to send and process the invoices manually.
When sending invoices through EDI, this process is fully automated. To illustrate, when your customer sends you an EDI purchase order, your EDI software sends the purchase order directly into your ERP system. Based on the order an invoice is generated. Your EDI then creates an EDI billing transaction based on the invoice and is sent to your business partner.
One of the most overlooked uses of EDI is the optimization of pooling services. As the quality standards for pallets are becoming increasingly strict due to far-reaching automation, companies aim to ship their goods as efficiently as possible. Making optimal use of your carriers, such as pallets, enables you to ship as many products as possible. With EDI, it is possible to automatically order the number of pallets you need for shipping your goods based on the data in your ERP-system. When your products are delivered reimbursements are automatically processed.
When EDI software is used in a supply chain, we often see it’s only used between business partners (e.g., producers and retailers). Logistic partners are not always part of the EDI infrastructure. With EDI, you can automate the communication with your logistic partners. When you receive an order, you can automatically send a packing order or dispatch advice to your logistics partner with a date and time to pick up the goods. In other cases when you outsource your warehouse, you can inform your logistic partner when an order is placed and when they are expected to deliver the ordered goods.
Business intelligence (BI) is the process of collecting and analyzing data to help you make informed business decisions. By monitoring and analyzing EDI transactions with BI tools, you obtain real-time information and insight into your supply chain. This enables you to make better business decisions faster, spot potential issues and improve the relationship with your business partners.
Want to know more about EDI?
Curious about EDI? Watch our short video about EDI and learn how to save costs on trade messages quickly and efficiently.