Supply Chain – What Is EDI?

EDI, in a nutshell, is a way to communicate facts and figures between computer applications electronically, with little to no input from a real person. It is the backbone of most, if not all eCommerce, and all manner of software exists that can facilitate it, be it via the Internet, email, or even special connections between locations. There is so much more to EDI than just invoices and the buying of items. With the right EDI setup, you can use it to take care of many aspects of your business operations, including order statuses, automatic funds transactions, and invoice printing. You can do much more with EDI and in less time. Back before EDI you had to do a much more involved process in order to buy something. You filled out a purchase order, mailed it, and then it gets to the supplier several days later. They manually enter the data into their computers, and the inventory person packs it up and ships it. The invoice is them typed up and printed, and later sent to the customer. It can be extremely cumbersome and time consuming, which is why EDI can really help you cut down the turnaround time. You only have to wait a matter of minutes to get an invoice or a purchase order, allowing for same day shipment of the item you want. Also, you only have to enter the information once when you work electronically. EDI has this chief advantage to help your business succeed. Labor times are dramatically reduced, and data entry errors are kept to a minimum, as there is no reentering of data. This also means that there is no backlog to speak of; once the order comes it, it can be invoiced and shipped later that day. According to some research, companies that switched to EDI methods of inventory keeping and shipping were able to shave 40% off their turnaround time, including getting the product and filling out orders. EDI can be utilized by whatever company will offer something to a customer that they have to purchase. No matter the type of business you have, EDI can accommodate it, and make your customer/shipper relations far smoother and faster. Fortune 1000 companies throughout the globe use EDI for their purposes, and in the next few years, four times as many companies will likely use these same methods.

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