For decades now, the employment of an electronic data interchange (EDI) has been the most widely used method of managing the smooth and rapid communication required for a successful supply chain operation. Now though, more and more companies and industries are realising the benefits of integrating their long-running EDI technologies with an enterprise resource planning (ERP) tool.
Utilising EDI and ERP together allows for the automatic flow of data between the customer-facing front end and the business operations at the back end. For industries that operate at high volumes and have relied on EDI for a long time now (such as manufacturing, pharmaceuticals, motoring and big box retailers like supermarkets and other brands with large premises), the integration of ERP is a no-brainer – removing the need for manual re-entry of messages, orders and invoices across multiple systems not only saves time, but also cuts the risk of user error drastically.
Why integrate EDI and ERP systems?
Automating EDI has several huge benefits, one being that it reduces the likelihood of human error that comes with repeating manual processes, such as phone calls, creating paper invoices, and electronic communications. Removing this burden from members of staff has been shown to consistently lead to fewer mistakes, faster turnaround times, and reduced operating costs. Not only that, it frees up time that can be better used by employees to focus on other tasks, as well as cutting down the amount of paper a business uses by storing and handling data electronically.
Other benefits of integrating EDI and ERP systems include:
Increased efficiency thanks to automated transactions
Reduction in business costs
Faster processing of orders
Reduced cost of doing business
The ability to sell in more locations
EDI allows transaction validation, ensuring that the data needed for proper processing and tracing is in place.
How EDI and ERP work together
While EDI systems of the past may have been left to stand apart from other enterprise software due to their complexity, the ERP/EDI integration that businesses can wield now are designed to work together seamlessly almost from the off. Where mapping individual data fields to each other would once have taken thousands of hours, it is now done in moments thanks to dedicated tools and processes. Meanwhile, best practice protocols ensure data safety, and third-party groups can standardise EDI and ERP implementation across companies for an even easier initialisation.
Blending on-premises and cloud-based ERP solutions with EDI integration gives businesses the flexibility needed to better manage the journeys of everyone who interacts with it, from stakeholders such as customers and trading partners to members of staff. And once EDI and ERP are integrated, data can be synchronised and viewed across different companies that are linked through the supply chain.
Take, for example, a shipment order detailing the products that a warehouse is required to ship to a retailer. Until recently, notices such as these would have taken the form of a paper document or fax that needed to be inputted into the recipient's system. With an integrated EDI and ERP though, the ERP systems of each company can be synced to share the same information, with employees on both sides able to view data such as destination and billing addresses, as well as product types and quantities.
No matter the size of your company and the number of orders it needs to process, using an EDI alongside ERP to automate trade partner communications and save employee time results in savings that are hard to ignore. Especially when they come alongside faster turnaround times, reduced errors and more accurate reporting.