5 Common EDI Challenges and How to Overcome Them
March 1, 2023
Electronic data interchange (EDI) is essential to any supply chain management system. It allows companies to handle business transactions using a standardised electronic format with any trading partner. It also makes once-onerous processes easier. Still, there are challenges to making the most of EDI, particularly if you are expanding your capabilities or in a high-growth period.
Top 5 EDI Challenges You’re Likely to Experience
These challenges have multiplied as the supply chain has evolved to a point where vendors can sell an item they never owned, then arrange for it to be delivered by someone else to a home with a mailing address provided by a customer not yet listed in their database. With so many touchpoints and processes, businesses need to stay on top of their systems and address these top EDI challenges.
1. Scaling Your EDI Program
While EDI is a standard protocol, the reality is that trading partners often have their own flavor of EDI transaction sets. A “standard” EDI purchase order is different from industry to industry and trading partner to trading partner. So, when you start to add more customers, accommodating unique requirements and business rules can be an issue.
There are three things you’ll need to do to scale your EDI program:
- Make sure it accommodates multiple rule sets and document types: Many trading partners can have dozens or even hundreds of unique business rules. They might include individual document fields, data elements and business rule-driven validations, like store number or ship-to location. Your EDI solution should support diverse rule sets so you can adjust as you or your partners grow.
- Integrate your EDI transactions into your enterprise resource planning (ERP) systems: If you only have a few trading partners, you can use “swivel chair integration,” where you manually enter data into the ERP from a standalone EDI system. As you scale beyond those few partners, you’ll need direct ERP integration to avoid manual errors and labor-intensive processes.
- Consider outsourcing your EDI program to an EDI provider: Trading partner management, communication and testing can be a pain. Outsourcing these tasks to a third party fully managed EDI provider, is less expensive and can free your staff to focus on more valuable business activities. To help you determine what EDI provider works best for your organisation, be sure to check out our EDI Buyer’s Guide.
Outsourcing can be a great option but be sure to choose your provider carefully. Many EDI providers offer direct integration into your ERP as part of their service offerings. Check to make sure they don’t outsource this project to third parties, which can lead to project delays and unforeseen costs. Our EDI services come directly from the TrueCommerce team, with employees who know the systems and can quickly offer support.
2. Overcoming Bad Data
In a report published in collaboration with SAP, we found that 60% of B2B transactions are affected or suspended because of some data-related anomaly. That’s a staggering number and one that must be managed with better data governance to fully realise the value of EDI.
It all starts with the order, which is where many data-related issues occur. Bad data is both a business issue and an EDI issue. In the report, we found that 16% of orders per month included an incorrect price, 20% involved out-of-stock or discontinued items, and 8% included a duplicate purchase order (PO).
Business rules in your EDI processing system can monitor transactions for issues like price differences, valid POs, and product availability dates. TrueCommerce, for instance, includes a business rule exception management tool that can automatically send alerts to your team and trading partners to catch bad data before it hits your ERP system.
3. Moving at the Speed of Commerce
Do you know if your ERP system is ready to process EDI transactions on demand? It’s one thing to have your EDI system deliver documents in real-time — it’s another for your ERP system to process them when they’re received or ready to be sent. TrueCommerce’s EDI integrations can help your ERP process transactions on demand and help you manage real-time transaction flow.
For example, you might pull your EDI transactions from the network in an overnight batch once a day. However, the speed of business and increased customer expectations require you to be prepared to work in real time. Instead, you can have your EDI network forward documents as it receives them or automate mailbox pulls throughout the day. Alerts and notifications also allow your team to stay in the loop if processing errors occur.
While keeping product flow and customers up to date, this visibility allows you to make fully informed business decisions. Instead of tracking down updates, waiting for inventory counts to refresh, or wondering if your information is out of date, decision-makers can act quickly with the clues they need at their fingertips.
4. Mastering the Art of Transparency
Supply chain visibility can be challenging to master, as every system that touches an order needs to be open to outside trading partners. EDI formats started as means to streamline manual business processes and have been wildly successful. However, as supply chains become more complex, the value of EDI has shifted to provide better inventory visibility at rest and in motion.
As the industry shifts from bulk fulfillment to one-to-one and direct-to-consumer models, transparency between trading partners is more critical than ever. You can improve transparency by implementing an EDI platform that supports a wide range of EDI codes, such as:
- Purchase Order message (ORDERS)
- Purchase Order Change Request message (ORDCHG)
- Purchase Order Response message (ORDRSP)
- Advance Ship Notice or Despatch Advice message (DESADV)
- Invoice message (INVOIC)
- Inventory Report message (INVRPT)
- Credit Advice message (CREADV)
- Instruction to Despatch message (INSDES)
To combat the growing complexity of supply chains, EDI must go together with inventory visibility. Without it, you’re missing out on one of EDI’s primary benefits.
5. Going on the Offensive
You’ve bought in. You’ve embraced an EDI implementation and have responded to trading partner requirements — and you want more. Luckily, you now have countless opportunities with customers, suppliers, transportation providers, and financial service providers like banks and insurers.
Being proactive with customers can move you up in their implementation queue. It’s an excellent way to show your commitment to the relationship and demonstrate your capabilities as a business partner. For example, high visibility could enable deeper insights into your performance so you can give potential partners proof of your strong track record. Simply having a good EDI solution can assure trading partners that you’ll be able to meet their communication demands.
Look to your suppliers to help streamline inbound inventory and supply chain visibility. Many of these companies can support electronically exchanged documents via EDI already. If not, send them our way — our team is happy to help your partners learn about and implement EDI.
Master EDI With a Comprehensive EDI Solution
EDI is a necessity and a boon for modern businesses, but it can cause some headaches if it isn’t done right. Make sure your EDI solution can help you tackle the challenges we’ve gone over so you can scale, reduce errors, work faster, increase visibility, and pursue new partnerships and growth.
TrueCommerce offers a wide range of tools to help you make the most of EDI. With extensive integrations and a cost-effective fully managed service option, TrueCommerce enables you to connect to all your trading partners, replace paper-based processes with automation, and develop a more efficient, agile supply chain. Learn more about how TrueCommerce can simplify EDI and boost your chances of success by scheduling your free demo today.
About the Author: Josh Wayne is Vice President of Commerce Products at TrueCommerce and a supply chain expert with 17 years of experience developing integrations for shipping & fulfillment, eCommerce, EDI, and more. Today, he oversees Product and North American eLearning for our eCommerce platform, storefront integrations, and multi-carrier shipping software. Josh lives in Columbus, OH, and in his spare time he is an active volunteer with the Boy Scouts of America. When not at work or volunteering, you can find him out on his Harley or in the woods hiking and camping.
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