When most small and medium sized companies talk about implementing EDI with suppliers, the first reaction is “No one is forcing us to do that so why would we want to?” The simple answer is the same reason large enterprises mandate their suppliers to do EDI: it saves money, which goes straight to the bottom line. If you think about EDI as a requirement, something your company must implement if you want to do business with larger organizations, consider the monolithic, error-prone way data gets into your ERP solution – typically via keyboard.
Of course you may be doing business with smaller organizations that may not have EDI capabilities. Did you know that they can be EDI-enabled at a low cost to them and zero cost to you? They can provide you with all of the information needed to integrate common business transactions into your system without data entry personnel on your end. At the same time you can improve communication between you and your suppliers by receiving detailed order confirmations and shipment notifications so you know when goods have left their facility and are in transit to yours.
Not only can your company improve the accuracy and speed of communication with suppliers, but look at what some other companies are doing. They are leveraging EDI outside of any requirements because it affords them the opportunity to push their own supply chain costs back downstream. By passing these costs along to their suppliers, they reap the benefits on their bottom lines.
You can minimize error-related costs by opting to transact electronically with suppliers, carriers and/or public warehouses, eliminating unnecessary labor and paperwork. Take for example ASN management and integration: vendors can send you an ASN at the time of shipment that is integrated into your purchasing, inventory and billing applications. When the goods arrive, a single barcode scan can receive the entire shipment, including serial number and lot number registration – fully-automated integration with no manual intervention.
ASNs are one example, but combined with purchase orders and invoice documents, you can see a measurable cost savings across your supply chain. And while the common belief is that you need to be forced into EDI, EDI is gaining momentum in becoming a non-mandated technology option that delivers significant ROI, both on the customer and supplier side. One investment in the right EDI technology can satisfy your customers’ requirements and open the door of opportunity for you to implement more accurate and cost-saving processes.