What is EDI technology?
Electronic Data Interchange (EDI) is the process of electronically exchanging data or more specifically business documents, between companies. EDI allows companies to send data (business documents) back in forth to trading partners. Documents such as purchase orders, invoices, advanced shipping notices. Thus reducing data entry (faxes, emails, and phone conversations) while streamlining business processes and increasing productivity. EDI transmissions generally contain the same information that would be included in the “paper” version of the document.
How Does EDI Technology work?
To explain how it works, let’s use the example of a Purchase Order that has been processed in your system. Information from that Purchase Order is translated to a specific data format (in this case it would be EDI code 850) and submitted directly to your suppliers system via the internet.
What are the Bottom Line Benefits?
Primary benefits of EDI technology include accuracy and efficiency which can result in both direct and indirect cost savings.
Accuracy – errors are reduced because data is digitally exchanged thus automating the process. Improved accuracy results in a series of additional benefits including transaction processing that is faster and streamlined thus eliminating potential shipping charges from the cost of returned orders.
Efficiency – electronic documents are delivered far more quickly than their paper-based counterparts resulting in faster order turn around, happier customers, and competitive advantage. Because EDI transactions are processed quicker the process encourages quicker payments compared to the fax method.
Direct and Indirect Benefits – EDI technology can reduce direct costs such as paper & forms, postage, printers & toner, and document storage. Indirect benefits can include reduced lead times, more frequent inventory turns, better use of warehouse space, and improved cash flow (faster delivery, faster invoice, more timely payment).
Contact us for a detailed discussion about how EDI technology can impact your business or for a review of the integrated EDI solutions available for your ERP software.
Webinar: Incorporating EDI into Your Business
When: Wednesday, Sept 9th | 2pm est, 11am pst
Want to learn more about EDI and the benefits of electronically exchanging data? In this webinar we will break down the key components of EDI, it’s place in the supply chain and the associated benefits.
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