We talk a lot about EDI in relation to 3PL and fulfillment services for eCommerce businesses, and we thought it would be helpful to compile some of the most commonly-asked EDI questions—with their answers—here in this post.
Let us know if you have others!
EDI, short for Electronic Data Interchange, refers to a process by which companies send information and data electronically (as opposed to manually and/or by paper) and within a standardized format.
The result? Greater efficiency, increased time savings, less need for manual entry or input of information and, ultimately, a more streamlined and profitable bottom line. EDI is less expensive, more efficient and overall less labor-intensive than other options or protocols.
EDI can refer to information and documents such as invoices, purchase orders, bills of lading and shipping notices. When EDI and Fulfillment Services team up, all of this information is able to be exchanged without human involvement, making it more cost-effective, less expensive and less error-prone. Ultimately, EDI affects your entire supply management for the better.
[su_spoiler title=”Why should a business consider EDI?” style=”fancy”]It could be argued that the increase in efficiency and in cost savings would be a “no-brainer.” Beyond that, no company, regardless of its size, wants to be left behind. As more and more businesses opt for EDI, the ability for those left behind to gain access to a larger arena of customers and suppliers will lessen. In other words, those who do not move forward will be left behind in a tough spot that does not allow for efficient and unlimited growth or expansion.
EDI compliance or being EDI-compliant means that your organization has the ability and opportunity to send and receive EDI documents and information in whatever way your counterpart requests. Documents are exchanged between partners in the exact format specified, and information is exchanged freely and easily.
EDI standards refer to the standard format used to process and transmit the information between partners. The standardized format allows for computers to read and understand the documents and information, again, eliminating the need for human or manual involvement.
Standard format refers to the format in which the information is structured, and ensures that both ends speak the same language, so to speak. Without getting too technical, some of the EDI standards used today are ANSI, EDIFACT, TRADACOMS and ebXML, many with multiple versions. In order to successfully exchange EDI documentation, two organizations need to agree beforehand on which standard and which version they will both use.