It’s fairly well documented that EDI and automated B2B processes can save money over manual, paper-based transactions. But just how much money are buyers and suppliers paying per EDI transaction, and are there ways to cut costs?
In every EDI application, knowledge of the business needs and functions is of paramount importance. If you don't understand a "purchase order" or a "load tender" or a "health care claim or encounter" you'll never be able to map the ANSI or EDIFACT EDI data format for these transactions. In my experience, logistics is the toughest because of the many, many unrelated (by ownership) parties who need to be in the loop.
In reviewing the business elements of a company that interfaces with EDI, I am certain the most difficult to understand is the “Supply Chain”. The most common mistake is thinking that “Supply Chain Management” (SCM) is just another name for “Logistics”.
"Both sides would get what they wanted; that has always been our mantra." That sounds like a worthy goal in any relationship. How successful in real-world practice, though, is cultivation of the retailer-supplier pairing?
According to James H. Davis, director of sales of Amosoft, an EDI provider, a vast majority of “all commerce is done through EDI.” Because of its unparalleled importance to the success of supply chain communications, it is imperative for trading partners to speak the same shipping language or hire an outside resource to communicate for them.
There’s nothing necessarily new about dashboards – software that serves as a control panels for enterprise applications and provides high-level views of a variety of performance and data-intensive information. But what’s clear is their growing importance for supply chain managers.
In many ways, EDI standardized formats have simplified supply chain logistics for retailers, and put them in the driver’s seat in their relationships with suppliers. In short, if suppliers don’t comply, they don’t get the benefit of incentives, and may suffer the consequences of penalties. Suppliers who are often out of compliance will also suffer from a lack of repeat business.
Getting started with EDI may not seem to be the easiest venture a business could undertake. But regardless of the level of difficulty, it’s a necessity for a growing number of trading partners who want to transact business together. Take these steps to ease the ongoing efforts necessary to use EDI and to turn it into a performance enhancement for your operations.
Value-Added Networks (VANs) have been around for more than 30 years. But today’s VAN is definitely not your father’s VAN. VANs have evolved from simply being a managed network on which to exchange EDI information and documents between a company and its trading partners to a more robust service that includes not only the network but also a variety of services aimed at facilitating more effective commerce amongst numerous organizations.