Electronic data interchange (EDI) is one of the most intimidating and often avoided software tools in the world of order fulfillment services.
SMBs (small- and medium-sized businesses) erroneously believe that EDI is either too expensive or too complicated to be worth the trouble, so instead insist on continuing to try to handle growing commercial orders with a basic shopping cart or worse, manually over the telephone or fax. The truth is that EDI can actually open your business to better opportunities and an increased cash flow with little extra input if you apply it correctly.
The Many Parts EDI Plays in Supply Chain Management
EDI plays such an important part in the supply chain that it can’t be ignored. Once you have access to EDI, you’ll see just how much it can do for you. EDI is about efficiency, order accuracy and saving man-hours.
Here are some of the more common roles it plays in supply chain management:
Allowing full order automation. When your orders come in over a fax or through email and then you have a person who transfers them into a piece of order management software, it may not seem like you’re creating a lot of extra work, but when you look at the hours involved it really adds up. EDI can be used in part to fully automate your workflows, including transferring the same order your staff needs an hour to handle manually in mere seconds.
Preventing order errors. Eliminating the human element as much as possible is the key to increasing your order accuracy exponentially. Although some customers may understand that your people are “only human,” you’ve never heard anyone mutter “to err is to be a computer.” When you use EDI to front end your order fulfillment, you’ll discover that the only place that’s left for mistakes is in the warehouse, where orders are checked and checked again to help reduce human error.
Handling all the communication with buyers and suppliers. In addition to handling order taking, an EDI can help with the additional communication you typically handle manually. From confirming orders to confirming changes and sending final order acknowledgements, advanced shipping notifications and invoicing, an EDI system can be put in charge of all the busy work.
EDI is an invaluable tool for SMBs hoping to work with larger outlets that require substantial orders. It’s just another way that you can do a lot more with limited staff. The reduced overhead can really help to increase your bottom line.
