The pandemic has altered the supply chain and left a dent in workforce numbers, causing disruptions that aren’t going anywhere – at least not anytime soon. Businesses across the country are scrambling, looking for ways to optimize their operations.
Right now, more than 80% of warehouses are operating without any business process automation. Just as the world has adjusted to the repercussions of COVID-19, so should your business. Utilizing electronic data interchange (EDI) automation can alleviate operational inefficiencies and optimize your company’s assets.
What is electronic data interchange automation?
It’s no secret that things can get delayed if you’re processing everything manually. Think about it: You’re spending precious minutes and hours correcting faxed or hand-delivered PO errors and likely making more errors in the process, wasting precious time and resources.
EDI was created to replace the slow paper-based method of exchanging documents through fax, mail or email. It allows business partners to exchange documents electronically. EDI is essentially a shared platform between, for example, the warehouse and the supplier that doesn’t require much human intervention. Ultimately, EDI automation can provide clear insight into a supply chain’s back-end processes, lessening the impact of future issues.
Businesses typically take one of two approaches: Direct (or Point-to-Point) EDI, or Fully Managed EDI Service.
Direct EDI involves integrating with every trading partner directly and managing all integrations, mapping, monitoring and maintenance.
Fully Managed EDI Service is the outsourcing of EDI to a third-party provider that manages all integrations, mapping, monitoring and maintenance.
While the benefits of EDI are undeniable, some challenges still exist.
Each option provides an entirely different level of control and ownership over the integrations. Direct EDI may allow for full flexibility, but as the number of integrations across applications increases, you’ll have to monitor multiple standalone integrations simultaneously. And while Managed EDI provides technological benefits, skills and expertise, the downside is that it doesn’t allow you to see crucial aspects of the process, such as the flow of data, mappings and integrations.
Another hiccup you may encounter with either option is that when you account for trading partners’ various testing requirements and guidelines, onboarding times may increase. Not to mention, software and skills are expensive, and options like custom EDI integrations require a significant amount of IT resources and expertise. You can expect these fully managed options to gradually increase in price as your business continues to grow. These high price tags can make it that much more difficult to overcome entrenched institutional concerns.
There’s no time like the present to automate. Even with the aforementioned issues, the only way to overcome those EDI challenges is to upgrade the technology itself. Your EDI technology should let you connect various services together to manage those integrations more effectively.
Here’s how the process would work from a warehouse’s perspective:
- Document Preparation: A retailer generates a purchase order (PO) using its internal system like an ERP.
- Translation: The PO converts into an EDI document, in this case EDI 850 (see all document types here).
- Transmission: Using an established secure communication between both partners, EDI 850 transmits to the supplier.
This information requires installing back-end systems/ERP. In turn, EDI is accessing data from ERP for the supply chain. It’ll handle situations such as backorders and will provide full transparency for the item’s status. Put simply, if the item is available, it’ll be sent. If it’s not, the order gets canceled. Warehouses better manage the supply chain — and the consumers they serve have a better ordering experience.
Overall, utilizing the benefits of EDI on the supply chain can bolster speed, lessen room for errors and improve efficiency.
The iPaaS connection - the new approach to EDI
By incorporating modern EDI solutions, you can improve your supply chain management and dissolve those issues with an integration platform as a service, otherwise known as iPaaS.
iPaaS lets users connect their ERP systems with trading partners and manage EDI transactions through APIs, a smoother, more economic integration. API integration helps solve common EDI problems, such as faster expansion due to faster onboarding and up-to-date information for inventory and fulfillment. It also allows for more efficient monitoring and management, and automation and robotic warehouse solutions that ease the burden of worker shortages.
The world is adjusting to a new normal. The reality is that supply chain issues are here to stay. Companies should stay up-to-date on the changing climates and customer expectations. The best way to meet those changes head-on is through automation. An EDI integration strategy targeted to your supply chain issues can help your company optimize your day-to-day operations. Whether you’re short-staffed or bombarded with orders, EDI integration can alleviate the stresses that come along with those issues.
Thriving companies are always prepared to adapt to ever-changing conditions. On the supply chain, EDI automation will open more doors to success and allow companies to adapt as conditions continually evolve.