An Overview
Just a few years ago, EDI (electronic data interchange) was a competitive strategy pursued mostly by large organizations today smaller organizations also beverage on EDI. Exchanging standard business documents such as purchase orders, functional acknowledgements and invoices could be accomplished faster and easier than with traditional paper methods. For example, an order that previously took several business days to process can now be done in minutes with EDI. This move toward a paperless office also helps prevent redundant data entry, leading to fewer errors.

Today EDI is a competitive necessity. The companies that pioneered the use of EDI now rely on it, and are requiring that their suppliers establish EDI links so that they can trade business documents electronically and improve service levels. Moreover, to simplify the purchasing process, many enterprises are implementing vendor consolidation programs. EDI has become the determining factor – no EDI, no business.

The decision to implement EDI may also be driven by strategic forces within an organization. With the proliferation of electronic messaging forms such as E-mail and E-fax, EDI has become an important first step in electronic commerce.

Measurable Returns
An easy way to visualize the EDI relationship is a large wheel with many spokes. The trading partner (usually the large company requiring EDI) is the hub of the wheel. The suppliers are the spokes. AS fast as EDI is gaining hold, these spokes are quickly turning into smaller hubs by requiring their suppliers become EDI-compliant.

What this "turn of the wheel progression" suggests is that EDI is worth the effort. What returns can you expect from a successful EDI implementation?

• Faster business document processing
• More responsive service to customers
• Strategic move toward EC Reduced inventory
• Better cash flow
• Fewer errors
• Reduced paper

EDI Benefits
There is no doubt that EDI can bring significant benefits to organizations. These can generally be classified into:

• Strategic
• Operational
• Opportunity

Strategic benefits include:

• Faster trading cycle
• Ability to adopt new business processes such as Just-in-Time manufacturing techniques.
• Ability to win new business or retain existing customers leading to improvements in business efficiency.
• Ability to respond to highly competitive new market entrants.

Operational benefits include:

• Reduced costs - paper and postage bills cut - reduction in money tied up in stock - manual processing costs (e.g. associated with verification, keying and re-keying of documents and the cost of manual filing systems).
• Improved cash flow
• Security and error reduction
• Acknowledged receipt

Opportunity benefits include:

• Enhanced image
• Competitive edge
• Improved corporate trading relationships

Electronic Data Interchange (EDI)
Electronic trading within the related industry is now well established and is a successful method of conducting business. Over the past decade a comprehensive set of standards has been developed and adapted which changed the way of working. The standards cater for all common transactions that retailers, wholesalers and suppliers will need to conduct Business-to-Business (B2B) trading. The EDI standards provide a common structure and trading protocol between all parties.

EDI is the transfer of information between different companies using networks, such as VAN’s or the Internet. As more and more companies get connected to the Internet, EDI is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information.

A well-designed EDI implementation will integrate seamlessly with business systems, ensuring that data related to business transactions will not be duplicated or keyed more than once. Data is reused as electronic transactions are exchanged. This data is stored in either the supplier or customer database.

EDI Standards
EDI standards vary from business to business. Every industry is having its own standard to have effective communication between customer and service providers.

• UN/EDIFACT: The main standard supported by the UN
• ANSI X12: Common in USA, Canada and Australia
• TRADACOMS: Predominantly used in the UK
• ODETTE: Developed in the UK for the motor industry.

Each standards body publishes definitions of the documents, which may be exchanged electronically. An EDI message represents common business documents and its definition specifies the content and sequence of the data to be included

Savings

• Reduced paper handling and mailing costs
• Reduced headcount or reallocation of staff to more productive activities
• Savings associated with faster turnaround of orders, collection of cash and thus improved cash flow.
• Improved customer service. It will be possible to handle greater volumes of data with ease.
• The elimination of secondary keying with its associated reduction of errors and improved knowledge of stock situations.
• Improved efficiency of staff time and usage, accurate scheduling, and the minimization of turnaround times.
• More effective use of storage space and more efficient stock handling, with reduced warehouse and storage costs, reduced administration costs, and shorter business lead times. Intangible benefits
• Staying competitive – your ability to respond to your customers needs as efficiently as your rivals.

Moving towards an exception based end-to-end process within your supply chain, concentrating human effort on areas that improve efficiency and customer service.

Vee will be happy to answer your questions and discuss over a call. Please contact us on 1-877-794-9514 or email at clientservices@veetechnologies.com