EDI is an essential piece of the supply chain management puzzle. Perhaps you’ve got all or most of the pieces already in your IT landscape but are you using them effectively and seamlessly with EDI?
Here’s the thing; since EDI uses standardised data formats to handle simple as well as complex business transactions exchanged with trading partners, although this enables a more streamlined and easier processing of data, it becomes a pain point when other trading partners use the ‘same’ formats albeit slightly differently. This makes EDI exchange a challenge in itself.
I’ve listed 5 (but not conclusive) challenges you’ll face with your EDI. Let me know what else you think causes problems in the supply chain when it comes to EDI implementation.
Challenge 1: Scaling Your EDI Program
Okay, we touched on this earlier, but yes, EDI is very much known for its international standards and the reality is that trading partners often have their own flavour of EDI transaction sets.
A “standard” EDI message for a purchase order can be different from industry to industry and can also be different from trading partner to trading partner.
So, when you start to add more customers, it can become an issue when accommodating unique requirements and business rules.
There are three things you need to do to scale your EDI program:
- Ensure that your EDI software can handle multiple sets of trading partner business rules and document types. Many trading partners can have a lot of unique business rules, as much as up to 100. This may include individual document fields, data elements and business specific rules and validations, like own store number or ship-to location.
- Integrate your EDI transactions into your ERP systems. To scale your IT systems properly with EDI, you need to ensure the software is capable to seamlessly integrate with your ERP system and vice versa. Rather than having data manually entered into the ERP system, it makes business sense to have this integration between your ERP and your EDI system. Scaling beyond that, you’ll need a direct ERP integration.
- Consider outsourcing your EDI to an EDI provider. If you want a relatively pain free way to have EDI in your IT landscape, consider using a 3rd party EDI specialist to help you. Let them take the stress from you for your trading partner management, communication and testing, which can be a real pain. Two other reasons to leave the hassle to a 3rd party; can be less expensive than managing EDI in-house, and it can also free your staff to focus on more valuable business activities. To help you determine what EDI provider works best for your organisation, read, “In-house vs. Outsourcing: Best Practices for Choosing the Right EDI Solution“
Challenge 2: Bad Data
Wow, as much as 60% of B2B transactions are affected or even suspended due to some data related anomaly, according to a recent report by SAP.
That’s a staggering number and one that has to be managed with better data governance in order to fully realise the value of EDI.
Data related issues typically starts with the order and this is both a business issue as well as an EDI issue. In a recent report, we found that 16% of orders per month include an incorrect price, 20% involved out-of-stock, incorrect item barcodes or discontinued items and 8% include a duplicate PO.
So, what do you do if you do not want a spaghetti monster of chaotic integrations, but you also do not want to force your ERP system to handle tasks that it is not designed for?
An excellent solution to this could be the integration platform Link™. Link™ allows you to add an endless number of IT systems while maintaining a complete overview without having to compromise data quality.
With Link™, you do not have to spend time struggling with complex integrations. Instead, you get one integration point that unites all your systems and ensures they each rely on the same valid data.
Challenge 3: Moving At The Speed Of Commerce
Do you know if your ERP (Enterprise Resource Planning) system is ready to process EDI transactions on demand? It’s one thing to have your EDI system deliver documents in real-time, it’s another for your ERP system to process those when they’re received or ready to be sent.
In the past, you might have pulled all your EDI documents from the network once a day, usually in an overnight batch. However, the speed of business and increased customer expectations mean you need to be prepared to work in real time. You can either have documents forwarded by the EDI network when they’re received or setup mailbox pulls throughout the day.
The Link™ platform lets you to know when documents are processed or are stuck because of some processing error.
Challenge 4: Master The Art Of Transparency
Supply chain visibility is difficult to master as every system that touches an order needs to be exposed to outside trading partners. EDI started as means to streamline manual business processes…and it’s been hugely successful…but as supply chains becomes more complex, the value of EDI shifted to provide better visibility of inventory.
As the industry shifts from strictly bulk fulfillment to one-to-one/direct-to-consumer models, transparency between trading partners is more critical than ever. You can also enable more transparency by implementing new EDI transaction sets that support inventory availability (EDIFACT INVINQ), bill of lading (EDIFACT IFTMIN), motor carrier tender and response (EDIFACT CONTEN), shipment status message (EDIFACT ORDREP), carrier manifest (EDIFACT DESADV) and package status (EDIFACT HANMOV).
Challenge 5: Proactive Opportunities With EDI
You’ve bought-in. You’ve embraced EDI and all its benefits. You’ve also responded to your existing EDI trading partner requirements…and now you want more.
Luckily, there are so many possibilities you can have with your customers, suppliers, transportation providers and financial service providers like banks and insurers.
Being proactive with your external partners can move you up in their implementation queue as well as demonstrates your commitment to the relationship. Look to your suppliers to help streamline inbound inventory and supply chain visibility. Many of these companies can support EDI already. If they can’t, there are lots of EDI specialists who can assist with getting them enabled.
With that said, why not book a call with me to learn more.