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How to Improve Supply Chain Efficiency: EDI Solutions

Whether your organization’s logistics and distribution supply chain appears to be running efficiently or you’ve recognized signs your supply chain network is inefficient, you should always seek supply chain improvements to grow your bottom line.

May 25, 2021

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Electronic Data Interchange (EDI) in supply chain management holds the key to improving supply chain efficiency.

Chances are your organization is already using EDI, the digital data exchange between businesses and their partners. EDI is used in about 85% of all business transactions, and it’s the gold standard of operational efficiency thanks to increased accuracy, processing speed and security and decreased costs.

Keep reading to find out how to improve supply chain efficiency with the right EDI distribution solution from the EDI software experts at 1 EDI Source.

Supply Chain Efficiency Vs. Supply Chain Effectiveness

Your organization’s supply chain may do a great job at meeting customer demand. If so, congratulations – you are running an effective supply chain, which is no small feat. However, it doesn’t mean you have an efficient supply chain.

Supply chain effectiveness refers to its ability to deliver results and meet organizational goals. In contrast, supply chain efficiency is how well processes are running to get more done using fewer resources.

For Optimal Supply Chain Efficiency, Automate B2B Transactions

With EDI, order confirmations, shipment notifications, routing instructions, planning schedules and the countless other documents essential to effective supply chain management are paperless and exchanged instantly, significantly reducing material and labor costs and human error. EDI enables real-time transactions and more precise communication, shortening sales cycles and improving relationships with business partners and customers.

Plus, if your business isn’t already using EDI in supply chain management, doing so can provide access to suppliers who use EDI, expanding your supply chain partner network.

Metrics For Improved Supply Chain Efficiency

EDI in supply chain management gives you the data you need to make informed decisions.Measure and improve your supply chain efficiency with logistics metrics such as:

  • Length of cycle time
  • Billing accuracy
  • Perfect order rates
  • Days sales outstanding
  • Inventory turnover
  • Warehousing costs
  • On-time shipping
  • Delivery time
  • Reason for return
  • Fill rate

Metrics can help alleviate pricing issues by revealing price efficiencies when demand is high and cost-effective solutions when demand is low.

Improve Supply Chain Efficiency With Expanded Visibility & Streamlined Inventory Management

Visibility can be a daily struggle without EDI supply chain integration, which provides a view of the entire supply chain from procurement to distribution with internal inventory tracking through real-time updates.

EDI solutions, with features like a hub for non-integrated suppliers and a cloud-based audit tool, give you a clear understanding of your supply chain to problem-solve effectively.