Flared Trousers, Platform Shoes or Electronic Data Interchange (EDI)?
Electronic Data Interchange or EDI as it’s often commonly referred to is a much maligned, often overlooked technology solution that can drive tremendous savings and efficiency improvements throughout a supply chain and/or trading community.
The following is a description of EDI as taken from Wikipedia – Electronic Data Interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents from one computer system to another, i.e. from one trading partner to another trading partner. It is more than mere E-mail; for instance, organizations might replace bills of lading and even Cheques with appropriate EDI messages. It also refers specifically to a family of standards, including the X12 series. However, EDI also exhibits its pre-Internet roots, and the standards tend to focus on ASCII (American Standard Code for Information Interchange)-formatted single messages rather than the whole sequence of conditions and exchanges that make up an inter-organization business process.
Although a description of the technology and associated practices may fill you with dread, there really isn’t anything to fear. Long gone are the days where you had to employ teams of technical people and invest in expensive technology. Electronic trading relationships with customers, suppliers or partners can now be setup within hours and the business benefits reaped within days.
If someone offered you a cost effective way to reduce your average days of debt, streamline the accounts departments, improve cash flow and decrease operating expenditure would you be interested? Well EDI can help you achieve this, including sending all of your invoices electronically, properly matched and guaranteed to reach your customers computer systems within seconds.
Retailers have effectively used EDI for many years although there are still many industries that have yet to experience its benefit. Chemicals and pharmaceuticals for example is a vertical market awash with paper documents, data and information that needs to flow up and down its supply chain. In addition, because of regulatory and compliance issues, a lot of this data needs to be stored for retrieval on an as required basis.
Should the Pharmaceutical business embrace EDI though and electronically exchange structured messages in real-time with its partners, customers and suppliers, much of the cost and complexity of doing business would be eradicated.
EDI is a well grounded methodology and proven way to drive significant supply chain improvements. Almost in secret, a small group of vendors have been addressing the pitfalls that blighted its uptake a decade ago and dare I say it “resurgence is just around the corner”.
Are you being asked to trade with customers using Electronic Data Interchange (EDI) , then visit www.perceptant.com to find the simplest and most cost effective way via SaaS to achieve this.
Great article, Supply Chain Management and Electronic Data Interchange (EDI) can really help with driving down the cost of trading.