Wednesday, September 05, 2012
This article also is available on info.algorithminc.com where 1 EDI Source appeared as a guest blogger.
If you’re an automotive supplier and you’ve been slow to become compliant with electronic data interchange (EDI) standards, it’s time to get moving... now. While EDI may be a new concept for you, it’s actually been used across a range of industries including the automotive sector, for more than 30 years. Today, Ford Motor Company and other large corporations require that their suppliers be EDI capable.
What is EDI?
EDI allows companies to electronically exchange purchase orders, invoices, advance ship notices and other critical business documents. This technology provides a highly secure environment to send and receive sensitive information that’s coded and translated into the standard-looking purchase orders, invoices, etc. Implementation of an EDI solution eliminates manual entry and improves efficiency - which can greatly reduce costs.
The following steps will help you quickly assess your needs and choose the best EDI solution for your business.
Step 1: Analyze Your Business Needs
Take a look at your current business processes to determine task automation opportunities. You should also consider your technical abilities. Can your staff manage EDI software or will you require outside support? EDI professionals will help you choose a solution that can integrate with your back-end systems and meet your transactional needs.
Step 2: Weigh EDI Options
Every good business decision must start with research, and adopting EDI practices is no different. EDI products and services have grown substantially over the past 30 years. Today, you can choose from installed software, outsourcing services, web- or cloud-based solutions and various technology hybrids.
Step 3: Talk to EDI Solution Providers
We understand that staying within your budget is important, but you should also consider functionality, usability and support services. It’s critical that you choose a provider that offers minimal system downtime, knowledgeable technical support, training and various other services beyond the technology.
The options may be overwhelming, but a good EDI firm will explain the various solutions to you and propose one that makes the most sense for your business. For example, if you don’t have EDI knowledge, installing the software may not be the best option for you. However, if you know how to use e-mail (which most business owners do), then you may consider a web- or cloud-based solution.
EDI has changed the way businesses interact. For decades, large companies benefited from the reduced costs and improved efficiency of the technology. Now companies, like Ford for example, are going deeper into the supply chain to require Tier 1 suppliers to enforce EDI usage among their suppliers. Stay tuned for more details on Ford EDI requirements.