Improving your supply chain efficiency with ERP-integrated EDI
In an environment of ever-changing consumer demand, your retail or manufacturing business needs to leverage every competitive advantage it has at its disposal. Modern global businesses rely on electronic data interchange (EDI) solutions to maximize operational efficiency and maintain market competitiveness. Businesses are using EDI technology to improve their operational strategy, enhance supply chain management, and improve operational performance.
Most large manufacturers and retailers coordinate their operations via EDI, from sending and receiving purchase orders and invoices to advance ship notices (ASNs) and product transfer reports. Becoming an EDI-capable organization signals to potential trading partners that you are a trustworthy party that uses standards-based supply chain practices, and helps you unlock the door to global trade. However, vast improvements in operational efficiency over paper-based processes is the primary advantage that EDI offers.
Even though EDI promotes uniformity through the use of communication standards, not all EDI solutions are created equal. Many older EDI systems only use one EDI format and don’t support any modern, non-EDI communication standards. Many of these legacy systems (and even some newer “web EDI” solutions) require users to manually key in the information, and may even require them to manually initiate and end the EDI transfer!
These methods, while better than using paper documents and a courier service, are ancient relics from the 20th century, and if your organization still uses this kind of software, you should make it a priority to have it replaced with a supply chain communication solution that integrates directly with your ERP software. Here are three ways that an ERP-integrated EDI solution significantly improves efficiency:
Minimal manual entry
If your EDI system is directly integrated with your ERP platform, then you’ll hardly ever need to manually type information to send it to a vendor (or type received information back into your ERP system). Since all information on your products, pricing, inventory, sales transactions, customers, and deliveries is already stored in your ERP system, you’ll usually be able to select the information you want to send with a few clicks. Then, depending on your operating procedures, you can either transmit that information to the appropriate trading partner right away or add it to a scheduled batch transfer.
More advanced EDI solutions will also confirm that the ERP information that you’re about to send complies with your trading partners’ internal policies for those specific document types. This is definitely much quicker and more convenient than consulting a separate compliance checklist for each vendor every time you transmit information.
After reducing its dependence on manual entry, your organization will spend less time managing information transfers, correcting transcription errors, and running damage control on the consequences of errors you failed to catch in time. You’ll also improve supplier relationships and save a surprising amount of money on EDI chargebacks caused by noncompliant information transfers.
Rapid partner onboarding
A well-designed EDI solution also improves efficiency by speeding up the onboarding of new trading partners. Instead of requiring days of configuration, modern EDI systems use intelligent field-mapping techniques to automatically reconcile your partners’ data and document formats with your own. The sooner you complete the onboarding process, the sooner you experience the benefits of direct B2B communication.
Agile decision making
By connecting your EDI system to your ERP platform, you can start using advanced, ERP-integrated analytics tools to gain a better understanding of your trading partners. In the same way that your ERP system’s dynamic dashboards and advanced reporting capabilities provide actionable insights about your organization’s internal processes, they will also begin providing clear, easy-to-understand intelligence on how each of your vendors is performing. You’ll be able to anticipate and adapt to supply-side changes more quickly, and decision makers will have access to the information they need to respond to emerging opportunities and challenges in real time.
Industry-leading EDI solution providers like PartnerLink provide end-to-end ERP-integrated solutions that drive efficiency by minimizing manual entry, expediting partner onboarding, and enhancing decision-making agility. Please contact the PartnerLink team to learn more.