Seven Good Reasons to Use EDI

November 17, 2015

Why you should be using EDI

Often companies see EDI as a burden placed on them by trading partners. But even if you aren’t required to conduct business via EDI, it may actually be a good idea since using EDI can provide a number of tangible benefits for your business, your bottom line, and your trading partner relationships.

EDI AS A REQUIREMENT

Your company may have little choice about whether or not to use EDI since it’s a requirement of doing business with many larger organizations, especially big retailers, manufacturers and government agencies. So, of course the most significant advantage is the ability to grow. However, it’s important to understand that those large organizations have spent significant resources developing specific requirements for EDI transmissions and many other aspects of sending and receiving information and products, so most often will charge penalties if you don’t comply with their requirements.

COST SAVINGS

Since EDI facilitates information flow automatically (with minimal manual interaction and no paper), there are some considerable cost savings including: Reduced overhead costs from employees not having to handle and rekey information Lowered printing and paper costs Heightened customer satisfaction due to less errors Reduced inventories and inventory carrying costs Lower risk for penalties or chargebacks.

ACCURACY

Data sent via EDI is never physically ‘touched’ so it lessens the opportunity for costly errors and can significantly improve your trading partner relationships. Additionally, EDI provides a valuable data trail of orders, shipments, claims, loan applications, inventory status and other business functions and can be easily (and quickly) researched.

EFFICIENCY

Sending EDI information takes just minutes (sometimes only seconds). And you can streamline the entire workflow by integrating EDI with your internal business or accounting system. Time savings can be significant, especially when dealing with larger organizations providing multiple transactions in a single EDI transmission.

SECURITY

The exchange of critical business or personal information is more secure using EDI since many communications protocols for transferring data include encryption and other security measures, like digital signatures. That’s why HIPAA, the U.S. Federal health insurance law of 1996, encourages the widespread use of EDI in the healthcare system.

SUPPLY-CHAIN VISIBILITY

EDI allows you to share information with trading partners, like product sales data, inventory status of products or component parts, demand forecasts and more. The trading partners can then share similar information with their trading partners, and so on, all the way down the supply chain. This kind of visibility allows suppliers to plan and respond to swings in demand to moderate inventory levels and prepare for large orders prior to arriving, meaning EDI is a critical element of just-in-time production.

ACTIONABLE MANAGEMENT INFORMATION

Electronic data is easy to compile and make available for further manipulation and analysis providing a valuable management resource. These are just seven of the dozens of ways your organization can benefit from EDI. Learn more by downloading our EDI 101 Guide. Or, if you’re currently shopping for an EDI solution, download our EDI Buyer’s Guide. And you can always contact one of our EDI experts. Just call 1.877.334.9650 or send us an email.