How EDI Can Become the Approach You Manufacture
Technological solutions such as electronic data exchange (EDI) remain instrumental in streamlining data exchange across the manufacturing ecosystem. Let’s find how.
EDI is a de facto standard that governs the exchange of important business documents like purchase orders, shipment notices, invoices, and other common documents. Currently, a majority of manufacturers rely on EDI to enhance and streamline effective communication through automation, which frees them up to focus on more crucial tasks including, product innovation and customer service.
EDI For Manufacturing
EDI is an important tool for manufacturing business ecosystem. It allows companies communicate and work with their trading partners including suppliers and vendors, customers, retailers, distributors, fulfilment organizations in an easy and efficient manner.
As a manufacturer, you can use EDI solution to:
- Cut downtime to connect with suppliers, logistics partners, and distributors
- Enhance monitoring as well as visibility across the global ecosystem
- Reduce chargebacks or delays
- Eliminate operational maintenance and other costs
Strategic Benefits of EDI
EDI offers numerous benefits to the manufacturing ecosystem. It can allow manufacturers embrace and optimize their EDI data exchanges. Some of the primary benefits include:
- Amplified business efficiency through automated transaction workflows
- Reduced dependence on manual data entry methods and decreased error frequency
- Increased cost savings through reduced chargebacks as well as SLA violations
- Expedited processes such as order-to-cash, procure-to-pay, and load-tender-to-invoice
In addition, EDI services allow manufacturing firms control mission-critical data exchanges, gain visibility, and ultimately stop worrying about the cost of transactional volumes.
EDI Documents Used in Manufacturing
Every manufacturing company has its own set of needs based on its ecosystem, but some documents are common. Here are four.
- Purchase Order (PO):This is one of the most commonly used EDI transaction set as it’s used when a customer buys a product from a manufacturing company. The purchase order contains information such as product details along with quantity ordered, and pricing as well as shipping information.
- Purchase Order Acknowledgement (POA):It is an outbound EDI document that confirms what was included in the purchase order. In addition, it also confirms the order electronically and allows user recognize whether it was rejected.
- Functional Acknowledgement (FA):It is the document used when a vendor notifies a customer that it has successfully received a purchase order. This document helps business users know whether the EDI document was received or rejected.
- Advanced Shipping Notice (ASN):This document alerts a customer about a confirmation that the manufacturer has shipped an order. ASN includes information such as content details, shipment packaging, carrier elements, tracking numbers, and more.
Right Approach to EDI Manufacturing
Modern EDI is a B2B data exchange mechanism that includes processes like governance, partner onboarding, data orchestration, SLA orchestration, and visibility. EDI interaction plays a significant role in streamlining these processes effectively. Additionally, it makes business faster by proactively troubleshooting errors, and embracing responsiveness and agility.
Set Your Path Forward
Modern EDI is an essential segment of digital transformation strategy that gives companies the flexibility to reshape how they employ technology for interacting with trading partners, customers, suppliers, etc. Simply put, data integration solutions with data transformation and data mapping mechanisms help companies streamline manufacturing processes with ease and precision.