March 10, 2022 EDI Automation: The Solution to Supply Chain Troubles

To mitigate supply chain disruptions and prepare for the future, companies must automate their electronic data interchange processes.

No Magic 8-ball can predict the end of the current supply chain issues resulting from the ongoing pandemic and other global disruptions. Companies continue to face multiple challenges while navigating the chaos caused by worker shortages, antiquated manual processes and lost data. The solution to bringing some order to this chaos? Digital transformation. To achieve digital maturity, mitigate supply chain disruptions and prepare for the future, companies must automate their electronic data interchange processes. This automation positions organizations for success as they plan for and adjust to a new normal.

What is Electronic Data Interchange?

Today, more than 80% of warehouses lack automation. Conducting all processes manually can cause many delays. Errors on purchase orders cost teams additional time and effort to resolve, but even the threat of serious delays fails to alleviate the intimidation factor of implementing process automation. Companies need fast, easy solutions to automate business processes and allay concerns about digital maturity and transformation.

Electronic data interchange, or EDI, offers a less intimidating approach to helping companies  go digital. EDI digitally manages the electronic exchange of documents between business partners so companies can end their reliance on slower, error-prone paper-based document transfers like fax, email and mail. EDI automation provides transparency to the supply chain’s back-end processes identifying potential issues more easily resolved in the future.

Direct vs. fully managed EDI

While businesses find EDI useful, this kind of data exchange can pose a few challenges. Typically, companies rely on two types of EDI enablement processes:

• Fully-managed EDI, where companies outsource EDI to a third-party provider to manage all integrations, mapping, monitoring and maintenance.
• Direct EDI, where companies integrate processes with every trading partner directly and self-manage all integrations, mapping, monitoring and maintenance.

These two popular options provide users with varying levels of integration ownership and control. Direct EDI gives complete flexibility, but adding integrations across applications requires  monitoring and managing individual integrations simultaneously. What you gain with fully-managed EDI through a third-party vendor’s expertise and technology, however, you lose in transparency and an inability to see data flow, integrations and mappings.

Both approaches also require extended onboarding times, and the skills and software carry hefty price tags. Fully managed options become more expensive as your business grows and scales. Additionally, custom EDI integrations take time and knowledge to master, and they require a commitment to IT expertise and resources.

It’s time to automate

To overcome the difficulties associated with EDI requires upgrading the technology itself. By using an integration platform as a service, or iPaaS, current EDI solutions can manage supply chain issues better than legacy solutions.

iPaaS-automated EDI systems enable users to connect their ERP systems with trading partners and use application programming interface (API) integration to manage EDI transactions. API facilitates a smoother integration process between ERP systems and resolves common EDI-related issues. The best software empowers users to build custom integrations between ERP systems based on their business’s specific needs.

EDI integrates with multiple supply chain platforms for faster expansion. It keeps users up-to-date on inventory and fulfillment through real-time data updates. For example, customers wanting to locate packages can find this information more easily through integrated EDI because it facilitates information exchange between carriers and clients. Integrated EDI gives customers full access to their information, including links to carrier tracking pages and shipping confirmation emails. Satisfied customers lead to more sales.

Supply chain companies also benefit from EDI automation. EDI’s business process automation shortens processing times which accelerates business cycles. Removing manual processes significantly reduces error rates which are higher with manual data entry. Supply chain companies can focus on improving a customer’s overall experience because they spend less time resolving errors. Manufacturers implementing integrated EDI systems are empowered to manage processes more accurately and efficiently.

Supply chain snarls won’t resolve overnight — or even over the next few months. To provide the best customer experiences requires companies to remain flexible, adjusting to constantly evolving environments and expectations. Onboarding an EDI integration strategy will help your business navigate supply chain issues and build customer confidence and trust. Companies willing to innovate and adjust in times of uncertainty are more likely to perform better and thrive.

About the Author
Mark Simon is VP of Strategy at Celigo. With over two decades of experience in the tech industry, Simon has spent his time leading teams at a number of different companies, such as Explore Consulting and Evo, where he served as Chief Technology Officer. Mark studied economics and computer science at the University of Washington.

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