01 Jun The Benefits of EDI for Wholesale Distribution
What is EDI?
Electronic Data Interchange (EDI) provides a common “language” for a company’s IT system to “talk” to another’s. It enables easier, faster and more accurate trading with suppliers, partners and customers by facilitating the exchange of business documents, such as purchase orders, sales orders, shipping notices, invoices and receipts.
It can integrate with your ERP system and with your WMS system and automates the exchange of documents. Reducing and often eliminating manual entry, it also allows a business to trade seamlessly with any company or retailer, especially larger ones that often insist on EDI as a method of trading.
What are the Benefits of EDI?
Implementing systems for EDI within a business affords a company greater control over its supply chain by allowing it to trade more effectively. This increases productivity and promotes operational efficiency. Selected benefits of EDI include:
Electronically transferring documents takes just minutes. This contrasts sharply with a manual process and sending via post that can typically take three to five days. The time savings gained allow employees to spend time on other tasks. It also speeds up ordering, meaning goods are received from suppliers more quickly, and reduces payment times.
Estimates on time-savings abound, and reports suggest that the quick processing afforded by EDI can speed up business cycles by 61% and order-to-cash cycles by 20%.
Automation of any manual process will necessarily bring about a reduction in costs. Research by GS1 UK identified that using EDI saves £14 per order. EDI negates the obvious costs such as stationery, printing and postage, but savings also come from a reduction in the number of disputes due to inconsistent or inaccurate data, a reduction in admin time and manual paperwork, plus faster moving stock.
Better Data Accuracy
EDI reduces errors. Without the need to manually transcribe invoices or purchase orders, data accuracy is maintained. EDI can entirely eliminate some manual errors: there’s no illegible handwriting to decipher, no mistyped amounts, and no lost paper documents.
EDI transactions are made from one computer to another, via a secure network, without the need for human processing, making for a more accurate supply chain.
Preserving the security of data is paramount today. The electronic transmission method for EDI uses a secure network that does away with potentially insecure channels such as the post. With EDI, the document is delivered directly to its intended recipient, without risk of compromise. This security of data builds trust and enhances trading relations.
Because EDI is an automatic process, it brings greater efficiency and enhanced productivity. There’s no risk of the type of inefficiency that comes with human processing, such as forgetting to transfer a purchase order or failing to send an invoice during the holiday period.
Each party also receives swift confirmation that documents have been successfully transmitted and received. This speedy processing can mean fewer out of stock situations or cancelled orders, which is vital to a wholesaler or distributor. Equally, warehouse operations benefit from faster order processing and delivery times, meaning they can reduce their stock holding too.
How Can Balloon One Help?
Balloon One works with multiple EDI vendors to bring innovative solutions into customers’ end-to-end supply chain solutions. We advocate any form of technology that streamlines a company’s processes and ultimately drives customer satisfaction. We have solutions that seamlessly format EDI transactions so that they match with your trading partners’ requirements and will smoothly integrate with your ERP system for an automatic process.
If you would like to benefit from improved relationships with your business partners, call us on 020 8819 9071 or get in touch for a quote.