EDI in Supply Chain

Electronic data interchange, or EDI for short, is essential for running a successful business especially if you’re hoping to grow your company. EDI can be used in several ways but one of the most practical uses of EDI is for supply chain management.

Supply chain management is just a fancy way of saying the flow of goods and services from the manufacturer to the customer. Focusing on EDI in supply chain management can help your business in tons of different ways.

EDI helps with organization

The main purpose of EDI is to facilitate the transfer of a variety of documents from one business to another. EDI softwares convert all of your documents into one easy-to-read standard format before sending it to the appropriate database. It cuts down on labor costs, time usage, and helps your business run more efficiently overall.

When you use EDI for supply chain management it allows you to transfer all of your supply-chain related documents including invoices, customs declarations, inventory documents, shipping statuses and payment information. Everything happens in one automated system so even the least organized business owners can improve their organizational skills.

It helps the environment

Printing out invoices, customer receipts, and all of your business-related documents takes a toll on the environment. When you use EDI for supply chain management you are doing your part to cut back on paper usage and start adopting more eco-friendly habits. Reducing your company’s carbon footprint won’t just make you feel better about yourself, your customers will appreciate it as well.

You’ll have instant exchanges and real-time transactions with EDI

When you don’t have to input things manually the document exchanges can be done instantly and this in turn will improve your business relationships. With electronic data interchange transactions can be completed in real-time.

EDI for supply chain management is more accurate

Since everything with EDI is automated this means that there is no longer a need for manual data input. Maybe you assume that you’re perfect and the chance of inputting data incorrectly is impossible. But the reality is that data entry is tedious work and the longer you do it the more chance of error there is.

With EDI you can completely eliminate the risk of accidentally fudging the numbers. Machines are much less likely to make mistakes so leave tasks like data entry up to the EDI software. Orders submitted through EDI are much more accurate and this means that the supply chain can run as smoothly as possible.

It streamlines communication with business partners

Not only does an EDI software streamline transactions but it streamlines every form of communication between you and your trading partners. As we already said there is essentially no risk of error with EDI so you won’t be sending a less-than-perfect document to your business relations.

Orders are confirmed at a faster rate, meaning they are shipped out and delivered in a timely manner. When the customer satisfaction rate improves this keeps your customers coming back, which is the ultimate way for you to grow your business.