Throughout the entire supply chain, Electronic Data Interchange (EDI) is commonly used to exchange business documents in a timely fashion. Despite there being EDI standards to help with this, executing EDI in the most efficient way is often challenging.
The Principal of EDI
The principal of EDI is to propagate efficiency throughout the supply chain, ultimately resulting in expedient order fulfilment – far faster than by human interaction over the phone, e-mail or fax machine.
|This efficiency requires two fundamental functions in an EDI solution:|
The fundamental manner in which the above functions are delivered across all EDI solutions is a much of a muchness, i.e. very similar. However, what sets EDI solutions apart is the way in which they provide the capability to tackle the challenges that are inherently associated with EDI. Here are the top 6 challenges in EDI and how to best address them:
- Integration Flexibility – The digital world is constantly changing, and the world of EDI is no different. As standards evolve to accommodate new requirements, and as your own business processes change, you need an EDI solution that is able to pragmatically reflect said changes. Using a rules-based EDI solution allows you to quickly and conveniently adapt your integrations to accommodate change, without having to throw things away as is so often the case with brittle integrations that have been hardcoded.
- Extensibility (API integration) – Continuing the notion of flexibility, more functionality is being openly made available to us through the wonderful advent of Application Programming Interfaces (APIs), either in-house or from beyond the edge. To tap into that functionality that maybe gives you some competitive edge, your EDI solution needs to support something known as full life cycle API management.
- Easy On-boarding of Trading Partners – Connections to your customers and suppliers reflect the business habitat your company dwells in. These connections come and sometimes go, the rate of which depends upon the dynamics of the environment you operate in. Standards, automation and self-service are the basis of establishing new connections swiftly and thus these capabilities can be a major asset.
- In-House Knowledge / Capability – Particularly for larger operations, knowing the principles of EDI and having the ability to implement changes directly is vitally important – particularly in times of crisis. Without this fundamental EDI knowledge and capability, you may find yourself held to ransom by some outsourced service providers who will often take days to fix very simple issues, all whilst purchase orders are stacking-up that can lead to chargebacks depending upon the SLA’s.
- End-to-End Automation – One approach to EDI is that of semi-automation, i.e. a portal is provided to allow a person to login and see any activity, e.g. purchase orders raised, ASN’s etc. Understandably for organisations with little IT capability, this option can appeal. However, this approach goes against the principal of EDI as mentioned at the start of this blog. With just a little more investment, end-to-end integration can be achieved by way of a full-blown EDI solution.
- Consistency Across LoBs – Different departments will have different requirements for their integration flows. Rather than take a disjointed approach where each Line of Business is left to their own devices, sharing a single unified platform that has the flexibility to accommodate multiple sets of requirements is the way to go. To highlight the point once again, a rules based EDI solution (ideally making use of templates) is the best approach for accommodating individual requirements and being able to change them easily in the future.
SEEBURGER has long standing experience in how to tackle these challenges. We are happy to help.