There’s no doubt that the old cliché “time is money” can be overused in business, in the sense that there are certain areas where the maxim just doesn’t apply. But when considering EDI (electronic data interchange) as part of digital operations, the phrase could not be more fitting.
When a company transitions from paper-based operations to EDI, time savings can be dramatic. Typically, companies put EDI into effect when required to by a new customer who uses EDI to place orders from suppliers, and therefore expects all suppliers to receive orders electronically.
EDI saves time in two fundamental ways. The first is by shrinking the amount of time it takes to process each order – the process that includes receiving the order, making sure the product and pricing are accurate, and recording the data in the order entry system. Completing these steps can take between 10-30 minutes in a paper-based system.
The length of time between when a customer places and order and the time it takes to arrive is also decreased by EDI. In a paper-based setup, even when an order is generated by an EDP system, it needs to be printed, put in an envelope, addressed, mailed, and delivered -- a process that can take between 2 days and a week.
A semi-electronic method that incorporates faxing orders can save some time if the order is electronically “printed” to a fax machine. In this scenario, the supplier receives the order right away. But other problems can slow things down: the people who process orders may not be close to the fax machine, and therefore won’t be present to receive it immediately. The order can also be misplaced, either buried under other faxes in the receiving tray or mistakenly picked up by the wrong person.
Electronic order processing virtually eliminates all of these delays, while reducing workload and time required of order entry clerks. EDI documents are transferred immediately, then automatically converted into a format compatible with your order entry system and added to your entry system. Only technical glitches create any kind of delay, meaning when a customer places an order, it is added to your queue immediately.
Thus expenses are lowered. Less manual labor is required of all involved in the order-processing system. The chances for errors, which can result in lost or delayed orders, are greatly reduced. And revenues increase as a more-efficient EDI process enables you to do more business, with more business partners.