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Top 5 Challenges of EDI in Supply Chain Ecosystems

Most sensible 5 Demanding situations of EDI in Provide Chain Ecosystems

EDI is a crucial ingredient for a successful supply chain management recipe. It simplifies onerous processes and bolsters business capability to handle multiple transactions with their trading partner ecosystem using a standardized electronic format.

However, EDI poses challenges to the growth of supply chain management companies, especially those expanding their capabilities or traversing in high-growth mode.

Here are the top 5 EDI challenges likely in a supply chain ecosystem.

1. Scaling EDI

Despite EDI being a standard protocol, trading partners often have their very own flavor of EDI transaction sets. A standard EDI purchase order varies from one trading partner and industry to another. Hence, when a company starts to add more customers into their ecosystem, accommodating unique requirements as well as business rules can be a hassle.

This scaling issue can be resolved in two different ways:

  1. Deploy an EDI software that accommodates a large number of sets of trading partner business rules and document types.
  2. Integrate EDI transactions into an ERP system with a modern integration software. EDI Integration solution, managed in-house or outsourced, allows companies to scale without much operational overhead.

As supply chain ecosystems leap to employ a modernized EDI solution, they can scale as per the changing dynamics of the world of business, ensuring a more seamless experience for the members of their digital ecosystem.

2. Growing Complexity of B2B Network

With businesses growing at a rapid speed, the number of participants in a single supply chain ecosystem is increasing each day. Consequently, the need for organizations to connect with all these stakeholders, send data electronically in real-time, deal with information exchange transactions, and maintain security across systems increases too.

Automated EDI solutions can handle this complexity with ease and accuracy. Supply chain service providers need not perform hands-on processing and that ultimately helps foster strong customer relationships, reduce errors, and expedite delivery of goods and services.

3. Overcoming Bad Data

Developing a data stratagem is not a new concept anymore. However, many enterprises struggle to maintain the data underpinning business decisions, bad data being one of the primary reasons. Bad data, also called dirty data, refers to data that can be misleading, erroneous, non-conforming, and duplicate. No industry is immune to the serious coercions created by bad data, and supply chain is one of them.

Older formats of EDI such as EDIFACT and IMP were unable to handle bad data proactively, leading to erroneous B2B transactions. However, modernized EDI solutions can combat this challenge easily. This, in turn, increases productivity and profit margins.

With an encrypted environment that offers strict access to authorized users only, automated EDI integration solutions can allow secure data transfer and exchange between companies in the application.

To add, such integration platforms are usually equipped with archive tracking and audit trail capabilities. They sends alerts or notifications to stakeholders as well as trading partners to seize bad data before it brings the ERP system to ruin.

4. Mastering Transparency

Since every system in a supply chain needs to be exposed to external entities like trading partners, gaining total visibility is difficult. The problem further elevates due to increased complexity of supply chain systems, which further impacts productivity, efficiency, costs, and customer satisfaction.

Communication and transparency can be optimized by relying on modernized EDI integration solutions. With a monitoring dashboard, supply chain systems can have access to information in real-time for providing better visibility of inventory.

5. Skyrocketing Costs

Conventional EDI solutions are expensive due to huge upfront and maintenance costs. Moreover, it calls for an efficient IT team with knowledge of EDI to handle business transactions. Consequently, operational load on the IT team increases, thus diminishing IT productivity and overall efficiency.

Modern EDI solutions enable supply chain ecosystems run transactions in the cloud, thereby lowering overhead costs. They streamline documentation process to help supply chain companies comply with EDI standards which, in turn, helps them circumvent fines due to delays, SLA violations, delays, and other performance gaps.

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