While processing B2B transactions, many businesses get entrapped with legacy systems. It’s interesting to know that Electronic Data Interchange (EDI), in its most nascent form, made its early inroads during the late 1960s, when electronic computers were just getting known to the world. Army Master Sergeant Ed. Guilbert developed a system of electronic communication to help the supply chains in US army to replace paper based exchange of documents that later evolved into what we understand today as EDI. It was not until the 1990s that EDI found unhampered integration into the supply chain process.
Customary B2B transactions such as Purchase Orders, Invoices, Advance Ship Notices, and Acknowledgements often go through a series of steps to complete the whole process. Processing these transactions involve numerous paper documents and human intervention leading to clerical errors. EDI eliminates paper documents, requiring human intervention only in exceptional cases. EDI facilitates businesses to automate the exchange of data between applications across the supply chain, ensuring the timely exchange of business-critical data.
Essential requirements of a worthy EDI system:
- Capability to support multiple EDI documents, such as shipping notices, purchase orders, invoices, financial statements, and catalogs.
- Ability to choose from custom-built validations.
- Capability to support communication protocols such as FTP, Direct Web uploads, Web-based uploads.
- Automated validation and alert mechanism to ensure clean data from depots.
- Permits EDI ANSI 322, ANSI X12(US), CSV, COARRI, CODECO & ISO v9897/9735 EDIFACT standards
- Ability to query and view records with container nos. or transmission ref nos.
- Add new trading partners swiftly.
- Easy scalability as the needs of the organization grow.
How do businesses benefit from a successful EDI integration?
Cut down human errors and improve accuracy
Manual processes are subject to errors, often resulting from keying in wrong words and their repetition elsewhere. EDI drastically improves an organization’s quality of data and guarantees substantial reduction of errors in documents.
Reduce operating expenses
EDI lowers your operating costs by cutting down printing & stationery expenses, photocopying, storage and courier charges. It radically reduces routine, counter-productive administrative tasks and human resource expenses.
Accelerate business cycles
EDI quickens business cycles as it facilitates process automation to avoid delays associated with manual processing. Management of inventories gets more rationalized and efficient with real-time data updates.
Increase business efficiency
Business organizations benefit from higher levels of efficiency because the chances of human errors get reduced. Staff can thus concentrate more on value-addition responsibilities instead of engaging in menial and repetitive tasks. EDI also improves an organization’s customer and business partner relationships because of faster delivery of goods & services together with higher levels of transparency.
Enhance transaction security
EDI augments the security of transactions by the safe distribution of data across a multiplicity of communications protocols and security standards. Elimination of direct human intervention in the transmission of documents plays a pivotal role here.
The shift from paper-based documentation to electronic transactions implies reduced production and consumption of paper. So there’s fewer cutting down of trees, leading to a cleaner atmosphere promoting noble corporate social responsibility.
EDI has helped cultivate closer relationships between business partners. It has augmented processes like electronic procurement, automated receiving, electronic invoicing, and electronic payments. With EDI, your company cuts down administrative overheads, improves data quality, hastens business cycles, and delivers strategic business gains.
iInterchange Systems is a preferred software solutions provider for container depots and ocean carriers. The company’s solutions are backed by a well-founded and committed after-sales-support mechanism. This is the right time to begin a conversation on putting into service a robust EDI solution for your company that will keep you ahead of competitors and help keep up your success journey.
Facts and figures in the blog are obtained from trustworthy sources on the internet.