EDI for Production – How Does It Simplify Processes and Operations Throughout?
Electronic data interchange (EDI) remains instrumental for exchanging files or documents across the trading partner ecosystem, and manufacturing industry is no exception in it. It serves a standard for companies dealing with documents such as like purchase orders, invoices, shipment notices etc. Not only EDI can enhance the quality of communications taking place between trading partners or customers but also allow manufacturers focus on other important tasks such as customer service, quality control, and more.
How Does Electronic Data Interchange Simplify Processes?
Every manufacturer, whether small or big, thinks of reducing the time taken to get connected with the distributors, retailers, logistics partners, suppliers, etc. While this can help manufacturers expand their ecosystem, their goal is also to alleviate costs incurred during data exchange or operational maintenance and increase the value of important parameters such as visibility and monitoring.
Obviously, achieving all these objectives can help manufacturers maximize their ROI and ultimately become easier to do business with. And this could be achieved by deploying a next-gen EDI integration solution. Being a standard across various industries, EDI plays an important role when it comes to interacting with a complex ecosystem with ease and precision.
How Can Manufacturers Benefit from EDI?
EDI streamlines communications, and for manufacturing industries, communication is deemed essential. More so, manufacturers can savor multiple benefits by embracing and optimizing their EDI data exchanges. These benefits include:
- Automates transactions workflows to accelerate business efficiency and productivity.
- Reduces errors during data exchanges by minimizing manual interventions.
- Brings huge cost savings by reducing chargebacks and SLA violations.
- Expedites important processes such as order-to-cash and procure-to-pay.
By paying heed to EDI integration, manufacturing firms can reinstate control of their important data exchanges in a secured way, facilitate improved visibility, and stop worrying about the cost of fluctuating transaction volumes ever.
What Are the Five Most Common EDI Documents Used in Manufacturing?
Currently, there are different types of EDI documents used within the manufacturing industry. Some of the most commonly used ones are:
- EDI 850 – Purchase Order
It is a highly common EDI transaction that comes into picture when a customer invests in something. This document encompasses information related to items ordered as well as the number of items delivered and yet to be manufactured. Additionally, the purchase order contains pricing and shipping details.
- EDI 855 – Purchase Order Acknowledgement
This document is sent by a seller to a buyer in response to an EDI 850. Along with confirming the receipt of a new order, EDI 855 informs the buyer about the purchase order – whether it was accepted, rejected, or required changes. Further, it includes line item detail that gives information regarding the accuracy of the order and organizations’ ability to meet the order’s requirements.
- EDI 997 – Functional Acknowledgement
A functional acknowledgement is used when a particular vendor notifies a customer that itreceived a purchase order from the other party successfully. In other words, it acknowledges a customer upon receiving a purchase order. Functional acknowledgement allows customers resubmit the document in case it’s rejected.
- EDI 856 – Advanced Shipping Notice
This document alerts to the customer when a manufacturing unit is shipping an order. The content details and shipment details that includecarrier elements, the quantity of the goods and the item information, tracking numbers for the packages been delivered are included in this type of document. Advanced shipping notice helps customers to schedule inbound deliveries.
- EDI 810 – Invoice
Essentially used in the manufacturing industry, this particular document is sent by the vendor or supplier to a retail partner or distributor so that they can make a request payment for products or services.
Apart from these documents, organizations use many other EDI documents to facilitate better data exchange and communication. However, many still leverage ancient techniques to do this, and those techniques are not only time-consuming but also expensive. Self-service approach to EDI plays a vital role here.
What is the Modern Approach to EDI Manufacturing?
Self-service-powered approaches to EDI can help all business users in manufacturing ecosystems take part in the process, freeing IT for other important tasks. Manufacturers can leverage self-service data integration platforms to turn all their users into citizen integrators, inspiring them integrate, transform, and exchange data without external support. Functionalities such as application connectors, pre-built connectors, and monitoring dashboard make this possible. Users can use these features and more to handle large data volumes in minutes while IT can focus on control and governance. So, not only the self-service approach improves data interchange and communication but also enhances productivity.