Electronic Data Interface or EDI is an emerging trend in the logistic industry which has successfully streamlined the disorganised sector to a considerable extent. EDI refers to data exchange protocol, and it eliminates human intervention in the process.
For instance, EDI can automatically generate and send invoices. Previously, the invoices were created manually in the logistic sector.
It was not only time-consuming but also encountered manual errors. However, with EDI, the logistic sector can totally eliminate human intervention and further, reduce the margins of the error.
Working Of The EDI
The EDI runs based on set parameters for different processes. For example, to utilise EDI in invoicing the shipments done by YunExpress, the company needs to set a few parameters. When the parameters are met, the work will begin automatically. Also, EDI exchanges all the documents electronically and discards the requirement for paper documents. China Post and many other logistic companies are moving forward to work digitally to save the environment and increase the efficiency of the logistic businesses.
EDI further improves transparency through real-time communication and seamlessly integrates all the stakeholders involved in the business. In short, EDI is beneficial for the logistic business. Here is a list of a few other roles of EDI in increasing efficiency in the logistics sector.
1. Provides agility
EDI digital transfers all the data between different stakeholders of the business securely. Digital exchange of the data ensures easy accessibility and sharing of the documents. Thus, it provides agility to the business. Further, it reduces the need to manage all the documents manually and reduces costs.
EDI uses a standardised format to exchange the data. This, in turn, keeps the communication between the sender and the receiver efficient.
2. Real-time exchange of data
Different segments of the logistic sector are always in motion, and it requires proper documentation. Shipment dispatchment, its movement from one hub to another, and the final delivery are a few of the data that need documentation. Furthermore, receiving an order and planning a timely dispatch of the item from the warehouse is essential.
EDI plays a crucial role in ensuring this efficiency by making it possible to exchange information in real-time. With real-time information, it is easier to plan and thus, efficiently keep the tasks moving.
3. Optimized operation
With EDI, you can ensure that the data keeps flowing in the chain; therefore, everyone has the updated information required for an optimised operation. Plenty of money is spent on streamlining the administrative and operational tasks in the logistic sector. EDI helps the logistic sector to cut down that cost and provide better efficiency in the operations of the logistic company.
4. Vendor Compliance
Vendor compliance requires EDI transactions. Whenever a vendor sends out a purchase order, they expect to receive the EDI ASNs as soon as possible. Accuracy plays a vital role in such transactions, and it is challenging to bring that accuracy and time management manually. Thanks to EDI, it can proficiently meet the different vendor compliances. It further ensures a good relationship with the vendors too.
5. Connecting and integrating transport data
Transportation plays a vital role for any logistic company. In fact, the majority of the cost of the logistics sector goes into maintaining its transportation sector. Poor integration in the transportation sector can result in a major loss for any logistic company.
EDI helps to reduce this cost by connecting and integrating different transport data. As a logistics company scales and grows, the role of EDI becomes prominent to ensure that unnecessary costs like receiving a fine for not meeting the compliance are cut.
Wrap Up
It is a known fact that the supply chain of logistic companies is extremely complex and fragmented. It has been a huge issue for logistics companies since the beginning. Integrating EDI in the logistic sector can improve the coordination of the different stakeholders of the business. It further allows us to monitor all the processes and give the owners control over them. The agility that an EDI provides is also helpful in improving the efficiency of the company.
Even though EDI is not a new technology, its usage in growing a business is still daunting for many. However, with the world going digital, it is essential to adopt EDI, upskill the workers to work with it and grow the business.
