Here at Celtrino, we offer a wide range of EDI solutions, including EDI integration and taking control of a business’s EDI services. With our EDI-managed service, we can offer EDI solutions across various industries. But what is EDI, and what does EDI stand for? Find out here at Celtrino as we teach you all you need to know about EDI.
EDI is a simple abbreviation of the term ‘Electronic Data Interchange.’
But what is Electronic Data Interchange? It’s a technology used for the automated exchange of business documents from one computer to another in a standard electronic format. An EDI solution enables businesses to exchange purchase orders, invoices, advance shipping notices, and other documents directly from one business system to another without any human intervention.
Just as with other technologies, EDI was originally developed for military applications. In 1948, the Berlin Airlift required the movement of vast quantities of data in a structured format, and EDI was designed to handle these military logistics. Once the technology was proven, freight systems such as the London Airport Cargo EDP Scheme started taking advantage of the new innovation.
Electronic data interchange replaces the sending of documents via postal mail, fax, or email, thereby reducing the extent of manual processing. Even email, which is a type of electronic transfer, slows down the process by adding the manual task of extracting, translating and processing the data from each email.
Traditional methods of sending orders and invoices, such as postal mail, often take around 5 days to transfer compared to EDI, in which document delivery is in real-time or within a few minutes.
Involving people in the processing of documents slows down the process as a whole and increases the likelihood of mistakes being made. Instead, EDI documents are sent directly to the relevant program on the recipient’s system, where processing can begin straight away.
EDI is usually used by B2B businesses that sell goods for resale. This is because these types of goods have set unit prices which can be calculated and automated through the solution. In contrast, the service industry often employs more flexible pricing, which fluctuates depending on circumstances.
With this in mind, EDI is most commonly used in the retail, manufacturing, CPG, pharma, wholesale, building and automotive industries.
The use of this technology is often driven by the retailer or wholesaler, each commonly referred to as the hub. This is because these “hub” organisations stand to gain the most efficiencies from the process, and they have the buying power to implement such a system throughout the supply chain.
On the other hand, the suppliers to these buying organisations are often called the “spokes”. They are required to engage in EDI in order to become compliant with a retailer’s trading processes.
From a supplier perspective, EDI can only be implemented once a retailer has started a trading relationship with the supplier and stipulates that Electronic Data Interchange must be used. At this point, the retailer usually provides detailed specifications of their setup, which a supplier can take to an EDI provider to start the implementation process.
The implementation of EDI can take anywhere from 1 week to 6 months, depending on:
The complexity of a retailer’s EDI project, which often involves integrating the entire supplier ecosystem and requires the solution provider to onboard each supplier onto the new system.
EDI delivers many benefits to the businesses that use it, and each of these benefits is amplified as a business grows.
Accelerate growth
Position your business for growth by achieving maximum efficiencies within your finance department. By implementing EDI and avoiding the need for large finance teams to rekey orders and invoice information manually, businesses can redistribute resources to more strategic activities.
Become more competitive
Add customers and suppliers faster and create a robust trading network spanning various industry sectors, such as retail and pharma. This enables your business to quickly adapt to market changes and stay ahead of your competitors.
Improve trading relationships
Faster, more accurate orders, invoices, deliveries and payments result in happier customers and suppliers. Smooth and efficient electronic trading powered by EDI ultimately results in successful partnerships.
Secure your most valuable trading relationships
One of the many reasons EDI has become the standard for most B2B transactions is that it offers one of the most secure methods of exchanging digital documents. With authentication and encryption, EDI completely controls a business’s trading data.
At Celtrino, we don’t just help integrate EDI into your systems. We also have access to many potential partners with suppliers and buyers; with our managed service, you can find the perfect EDI solution and start forming relationships with new trading partners.
Serve your buyers accurately and efficiently. Meet buyer EDI requirements quickly, easily and cost-effectively with our EDI solutions.
Our EDI solutions will enable your suppliers to receive, process and create all of the documents required to meet with your specifications.
EDI can be complicated, but it doesn’t have to be. Let Celtrino manage your electronic trading activity from mapping to system maintenance and upgrades.
Whether you are a supplier or a customer, there are many EDI advantages for you to consider.
You can learn more about Electronic Data Interchange by exploring our case studies and discovering how we have offered EDI solutions and managed services across multiple industries.
If you have any questions about our EDI network or just general EDI questions you’d like to discuss or would like to learn more about us, be sure to contact us, and a member of our dedicated team will be happy to help.
