Technology has brought untold efficiencies to the supply chain, speeding up processes while reducing errors. Among the more effective – and overlooked – tech-based developments to make the supply chain run smoother and faster is the increasingly widespread use of electronic data interchange, often known as EDI.

EDI is the intercompany communication of business documents in a standard format. Crucially, EDI serves to replace paper-based documents, allowing businesses to exchange transaction-related documents digitally and automatically, including purchase orders, shipping statuses, invoices, customs information and inventory documents, among others. Electronic Data Interchange has provided a boost to supply chain partners of all kinds, such as Star Distribution Systems, which employs EDI in its work with its clients and their customers. Star Distribution is a third-party logistics provider with 1.5 million square feet of warehousing in Central Florida and a commitment to lean efficiency in the supply chain. 

Here are some of the crucial advantages of EDI.

Accuracy and security

The use of EDI leads to increased accuracy of transactions because it reduces opportunities for human error. Automation means less need for human data entry and handling of documents, meaning fewer mistakes connected with variables such as keying errors and hard-to-read handwriting. In addition, when your organization uses EDI, you are better able to recognize when there are deviations or abnormal activities that can serve as red flags for errors – helping to catch them before they prove costly. EDI also offers more security than paper and email options because it uses encryption to protect documents and maintains a record of transactions, while providing reassuring transparency of the ordering and invoicing process for all of the trading partners involved.

Speed

Faster transaction processing means faster deliveries and a faster overall supply chain. EDI streamlines document management, leading to significant upgrades in the speed of the exchange of documents in transactions between logistics partners. EDI also makes communication easier and faster between shippers and their customers. While paper documents can easily be misplaced or lost, EDI eliminates that risk and the delays associated with the inevitability of missing paperwork. In addition, some processes can run around the clock because of the reduced need for human input.

Cost savings

EDI helps cut costs for shippers in a variety of ways, starting with the obvious reduction in paper usage and related expenses, such as printer supplies, storage and postage. Limiting paper use as a result of adopting EDI also reduces an organization’s environmental impact, helping it to meet its sustainability goals. In addition, EDI drastically reduces the staff resources needed to process documents and manage records, cutting labor costs and freeing up team members to focus on more strategic work that can bring new value to your organization.

In-depth, updated information

Tracking features associated with EDI mean that there is better awareness on the status of orders for both shippers and their customers. Because EDI allows shippers access to prompt, updated information, they can make decisions that are better informed about the status of their inventory, helping them to better anticipate how much stock they will need to meet customer demand. A higher quality of data leads to a higher quality of forecasting. That strengthens supply chain planning and efficiency for shippers by reducing the need to store unnecessary inventory and enabling them to ramp up inventory when demand spikes. 

Star Distribution Systems provides 1.5 million square feet of food grade and general commodity public and private warehousing, strategically located on the I-4 corridor in Central Florida. Utilizing our RF proficiencies and our state-of-the-art WMS, we guarantee your merchandise will get in and out without delay.  For more information, contact us.