EDI Software Designed to Automate Your Supply Chain

EDI, Electronic Data Interchange, is a method for electronically transferring business documents between different computer systems. EDI is for any business that exchanges business documents with other businesses as part of their trading relationships. EDI enables two or more companies to exchange documents electronically, including electronic document exchange between a retailer and its suppliers and customers. EDI is automated and standardized, removing the need for manual data entry.

Today, EDI is typically used for the exchange of electronic orders and invoices but can also be used for exchanging purchase orders, packing slips, etc. Standardized formats tailored to both the sender’s and receiver’s individual business requirements are used for document transfers. One of the most common methods to connect to EDI is by integrating it with the company’s ERP and accounting systems.

With EDI, you eliminate physical paper documents and PDF files. This means avoiding the need to spend a lot of time on manual processes, such as entering data from paper or PDFs into your ERP system.

EDI is used in most industries, especially among retail and manufacturing companies as well as wholesalers, to optimize business processes by electronically exchanging orders and invoices. In the public sector, EDI is a requirement, and specific industry-approved EDI > EDI Formats dictated by the EU are used.

There are a few things to think through when adopting EDI, depending on the demands of your business needs. Transaction volume, resources and support are all important factors of consideration when choosing the right solution.

Using EDI can transform the fortunes of businesses, large and small, with benefits including reduced costs and improved cash flow to name just a few. EDI is a game changer for many businesses.

A Value Added Network — or VAN — is a secure private network which acts as an intermediary to enable EDI connectivity between trading partners and other VANs.

EDI > EDI Integration is the electronic communication of business messages, such as orders and invoices, credit notes and ASN’s, internally between your own EDI system and your own back office accounts, warehouse or ERP systems, removing the need for manual re-keying of information. Businesses can use EDI > EDI Integration tools to manage their EDI activity from their business system and remove manual rekeying processes from their organization.

An EDI mailbox is a file storage area within a computer which can be uniquely identified from connected mailboxes and VANs in other locations, and where EDI messages are consolidated and stored for retrieval by a vendor or supplier.

An EDI hub is usually an organisation that buys multiple products and services and does so by sending orders electronically to its suppliers, and receiving electronic invoices in return.

EDI transactions, documents and files refer to the EDI messages that are exchanged between trading partners.

Electronic Data Interchange, or EDI, is a process that enables the rAPIsd, automated and secure electronic exchange of documents between businesses. An EDI solution converts business documents such as purchase orders and invoices into a standard EDI format and sends it to another EDI user, usually a trading partner. But how does EDI work?

1. Preparation and organisation of data
In the case of sending a purchase order to a supplier via EDI. Rather than creating and printing a purchase order and sending it via post, fax or email, the first step is to gather the PO information and prepare it to be translated into the standard EDI format you and your trading partner have agreed to use. Typically this is done by exporting the PO data from your accounts or ERP system, however some businesses may simply export it from a spreadsheet or report.

2. Translation to the EDI format
Once your PO data is ready, it is then run through an EDI translator to convert it from your non-standard internal format into a standard EDI format. EDI software uses the data elements and segments in your original spreadsheet or file to ëmap’ to the EDI format.

The most common EDI standards used globally include:

EDIFACT
EDI XML
EANCOM
ANSI X12
Businesses can buy and install EDI software to use in house, or choose to partner with an EDI managed service provider to have the process taken care of on their behalf.

It’s important to note that the process of EDI mapping does involve some specialist expertise when defining the data to be mapped and translated, so opting for an EDI service provider can be a huge advantage. An EDI managed service, like the one offered by TrueCommerce, handles the entire EDI mapping and EDI translation process, so businesses can be free to focus on what they do best.

3. Transmitting the EDI documents
With your purchase order now translated into a standard EDI format, it can now be sent to your trading partner who will follow the same process in reverse, translating the EDI document from the EDI standard into the format required by their internal systems. In the case of an integrated EDI solution, the data can be automatically sent to your internal system—no manual rekeying required. Again, there are options when it comes to how to do this.

The files can be sent via a VAN (Value Added Network) or alternatively direct connectivity can be set up between the trading partners using FTP (File Transfer Protocol), SFTP (Secure File Transfer Protocol) or AS2 (Applicability Statement 2) protocols which means VAN’s are not required.

EDI, which stands for Electronic Data Exchange, is the secure, automated exchange of electronic documents between trading partners using a standardised format that enables computer systems to communicate with each other.

With integrated EDI, documents flow directly in and out of your accounting or ERP system with little or no human intervention. This accelerates order processing, the pick/pack/ship process, invoicing and other essential supply chain functions.

Image showing key EDI benefits
The benefits of integrated EDI is that it removes the need to manually retype data which eliminates costly data entry errors. This saves considerable time and money and improves your customers’ experience. An integrated EDI solution not only increases efficiency through automation, it also saves you money on postage, paper, physical document storage and the time it takes to rekey data and handle paper documents.

The advantages and benefits of Electronic Data Interchange
Improved operational efficiency: Automating the flow of messages with integrated EDI improves the speed and efficiency of your operations by eliminating the need to manually rekey data in multiple systems.
Fewer errors: By removing manual, paper based processes the occurrence of human errors is dramatically reduced or even eliminated.
Increased accuracy: Automated message validation ensures that errors are flagged and rectified before they impact your trading partners and data integrity in your internal systems is maintained.
Increased return on investment (ROI): Automation through integrated EDI enables you to maximise the benefits of EDI and move beyond simply complying with your customers’ EDI requirements.
Enhanced visibility: EDI provides full transparency of the ordering and invoicing process for you and your trading partners. This end-to-end visibility enables more informed decisions to be made and ultimately improves the service delivered to consumers.
Reduced inventory cost: Increased visibility within the supply chain eliminates unknowns and can therefore enable you to reduce the levels of inventory you need to hold.

Two of the main things to consider when adopting EDI are transaction volume and the resources and support needed to run the solution in the long term.

Volume of EDI transactions
How many transactions will you be using EDI for? Will it just be with a few customers or suppliers to start with or your entire trading network? By adopting EDI, do you expect your trading network to grow? How many times a day will you be exchanging documents?

The amount of transactions will determine how heavy the usage will be and will have an influence as to what solution you choose, whether that is a web EDI solution or integrated EDI into your order management system. Our technical experts will be able to advise which solution would be the best fit for your business’s needs. You may also find our blog post ëMoving beyond compliance with EDI ERP Integration’ useful.

Internal resources
Have you thought about how you would look after the day-to-day management of EDI? Are you looking to hire someone to take on these responsibilities? With an outsourced solution, you don’t have to.

An outsourced managed service solution takes away the pains and responsibilities that come with the day-to-day management of EDI. Our first-class managed service is led by a team of technical experts, continuously monitoring the delivery and processing of messages, and proactively resolving any issues meaning you don’t need to worry about it.

The timeline for implementing EDI depends on your business needs and the level of customisation required.

Typically, setting up an EDI ERP integration is straightforward. The time-consuming aspects are related to onboarding trading partners and configuring business rules tailored to your business operations.

Conducting tests will be required during the implementation process. Specifically for EDI, we need to do testing on real production data to verify that the data transferred is consistent with what we expect for the live environment. Before conducting the testing, all data needs to be prepared.

EDI integration refers to the process of integrating your EDI (Electronic Data Interchange) system with your ERP (Enterprise Resource Planning) system.

EDI integration improves proficiency across organisations. It allows businesses to easily exchange EDI messages between customers, suppliers and 3PL partners. Commonly exchanged EDI messages include purchase orders, invoices and ASNs (Advanced Shipping Notices). It allows businesses to easily exchange EDI messages between customers, suppliers and 3PL partners. Commonly exchanged EDI messages include purchase orders, invoices and ASNs (Advanced Shipping Notices). With EDI integration, businesses avoid having to manually input EDI messages into their ERP system. Instead, EDI messages are instantaneously automated into the preferred internal ERP, diminishing the need for manual input or intervention by internal team members.

EDI integration simplifies the electronic exchange of business messages between your internal systems and your EDI infrastructure. EDI technology uses automation to seamlessly transfer data from EDI documents to multiple business systems. This integration boosts accuracy and efficiency while reducing the risk of errors and improving overall operational performance.

EDI integration involves connecting your EDI solution to your ERP, facilitating automated data transfer between them. Integration of EDI with your ERP revolutionises traditional input methods for order placements, invoice processing and goods received. For example, upon receiving an EDI document, the data is automatically transmitted to your ERP system, eliminating manual data entry and enhancing operational efficiency.

Implementing EDI will also allow organisations to establish a connection between disparate computer systems. These connections can be critical to a business that has experienced an acquisition or merger. With EDI integration, incongruent systems can be combined to work across companies. Upon integration, business systems communicate using standardised EDI language, eliminating the need for manual steps. It guarantees an automated exchange of vital messages such as purchase orders or invoices. This modern approach is notably faster and more efficient than conventional methods like email or postal services, enhancing productivity and streamlining operations.