Setting up an EDI integration with your trading partners can seem like a daunting task. EDI integration involves several steps. Here’s a quick look at the main ones and how choosing the right solution can help you tick them off your to-do list with ease.
The supply chain is the backbone of many modern organizations. But as the market and customer demand for rapid fulfillment evolve, some supply chains are struggling to keep up, especially as they become part of an increasingly complex global ecosystem involving manufacturers, suppliers, customers, and other trading partners located all over the world. Retail giants, such as Amazon and Walmart, can have hundreds of thousands of suppliers! Without a highly optimized supply chain, even a network a fraction of this size would be impossible to manage.
What is supply chain optimization?
It may sound complex, but in terms of definitions, supply chain optimization boils down to making sure customers get the right products at the right time (as quickly as possible) and at the right cost to the company (as little as possible). But to do this, a company needs to have a clear understanding of its supply chain, including how many suppliers it has, what each of them does and when, and how much inventory is moving through the supply chain at any given moment.
What does optimization look like?
As a business grows, so does its supply chain—along with the number of moving parts and the risk and uncertainty involved in all operations. Supply chain performance is affected by a variety of factors: from internal and external elements to the environment and competition. The particular challenges a company faces will determine its choice of supply chain optimization model. Ideally, a company would choose one that covers the key steps in its chain from end to end. For most major retailers, this includes inventory, product receipt and storage, order processing, dispatch and distribution, and customer service and support.
What are some optimization tools?
There are lots of different optimization tools on the market. For many companies, supply chain optimization involves a B2B integration platform that allows them to digitally integrate, automate, and optimize those key steps and processes in the supply chain. One such option is an EDI (electronic data interchange) solution, which enables companies to shift from paper documents and manual processes to digital ones and automated alternatives when communicating between trading partners.
In its basic form, EDI works at the data level, accelerating the exchange of documents (such as purchase orders, invoices, credit adjustments, advance ship notices, and inventory inquiries), reducing human-caused data errors, trimming costs due to less labour and physical paper to process, and speeding up the order-to-ship cycle through automated processes.
But EDI doesn’t stop there. If taken to the next level, EDI can be part of a larger B2B integration strategy that involves securing and governing the flow of data and integrating that data into a broader IT infrastructure. This provides companies with a full view of their supply chain—all activities and transactions—and better overall control, allowing them to monitor and optimize each step of the process.
This kind of supply chain visibility fosters close, secure, and collaborative relationships with all partners—from suppliers and manufacturers to IT providers and financial institutions—allowing for better understanding and relationship management, which ultimately leads to improved customer service and a better bottom line.
What are the benefits?
While there are the initial set-up costs to any supply chain optimization solution, the many benefits are certainly worth it: lower costs, increased revenue, improved business partner relationships, and better customer service—not to mention the ability to stay competitive in today’s increasingly fast-paced, digital economy.
Learn how an EDI solution can optimize your supply chain