What is EDI?
EDI is a simple abbreviation of the term ‘Electronic Data Interchange’ which in itself is a technology used for the automated exchange of business documents from one computer to another in a standard electronic format.
It enables businesses to exchange purchase orders, invoices, advance shipping notices, and other business documents directly from one business system to the other, without the need for any human intervention.
EDI vs traditional processes
EDI replaces sending these documents via postal mail, fax or email which each increase the amount of manual processes involved to different degrees. 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 which delivers the documents in less than 1 hour.
Involving people in the processing of documents slows down the process as a whole and also 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.
Who uses EDI?
EDI is usually used by B2B businesses who sell goods for resale. This is because these types of goods have set unit prices which can be calculated and automated through EDI whereas the service industry often employ more flexible pricing which can fluctuate depending on a multitude of circumstances.
With this in mind, EDI is most commonly used in the retail, manufacturing, CPG, pharma, wholesale, building and automotive industries.
The use of EDI is often driven by the retailer or wholesaler which is commonly referred to as the hub. This is because these “hub” organisations stand to gain the most efficiencies from the EDI 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 referred to as the “spokes” and are required to engage in EDI in order to become compliant with a retailers trading processes.
On the other hand, the suppliers to these buying organisations are often referred to as the “spokes” and are required to engage in EDI in order to become compliant with a retailers trading processes.
How to implement EDI?
From a supplier perspective, EDI can only be implemented once a retailer has started a trading relationship with you and stipulates that EDI must be used. At this point, the retailer will usually provide detailed specifications of their EDI connection 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 number of trading partners a supplier needs to connect to
- The number of different messages that need to be included
- The number of different connection protocols required
- The amount of traffic that will pass through the network annually
- Whether EDI integration to an ERP is required.
A retailer EDI project usually takes longer as it will often encompass the retailers whole ecosystem of suppliers and the EDI provider will usually be responsible for onboarding each supplier onto the new system.
A retailer EDI project usually takes longer as it will often encompass the retailers whole ecosystem of suppliers and the EDI provider will usually be responsible for onboarding each supplier onto the new system.
What are the benefits of EDI?
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 manually rekeying orders and invoice information, businesses can redistribute resources to more strategic activities.
Become more competitive
Add customers and suppliers faster and create a robust trading network that allows your business to quickly react to market changes and get 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 because it offers one of the most secure methods of exchanging digital documents. With authentication and encryption, EDI offers complete control of a business’s trading data.
Celtrino Can Help With
EDI With My Buyers
Serve your buyers accurately and efficiently. Meet buyer EDI requirements quickly, easily and cost effectively.
EDI With My Suppliers
Our EDI solution will enable your suppliers to receive, process and create all of the documents required to meet with your specifications.
Premier Managed EDI
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
Benefits of Celtrino EDI
Whether you are a supplier or a customer there are many EDI advantages for you to consider.
Fast and reliable message exchange
Reduce manual intervention, paper and data errors
Free up accounts and IT resources for value-added activities
Better sales reporting, stock control and information sharing
Faster order processing and faster payment of invoices
Easier to grow EDI connections to enter new markets
Respond promptly to key customer EDI and supply chain demands
Get in Touch
Do you have a question or query you’d like to discuss with us? Contact our dedicated team today.
