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How can EDI and ERP benefit supply chain management?

edi erp

ERP and EDI can work well together. The ERP system creates a uniform, central database in the company itself. This is where all important business processes from all departments come together. This database uses the EDI software to provide important information to customers or suppliers.

An example: A customer orders a new consignment from the producer, which is immediately recorded by the ERP system. The software automatically forwards the data to production and purchasing in order to start production. EDI goes one step further: The software does not only forward the customer's order to the point of purchase, but also directly to the supplier - without wasting time and without errors. This enables the supplier to deliver the required precursors directly to the producer.

This is exactly how EDI and ERP work in other areas. For example, invoices can be automatically generated and sent to the customer. The advantage: Even if the customer or supplier uses a different ERP system than their own company, communication via EDI can nevertheless take place. Because the EDI software supports multiple, open standards, compatibility issues are not common.

For which sectors is the integration of EDI in ERP suitable?

EDI and ERP: Transfer data quickly and reliably worldwide

EDI software is especially used in the automotive industry and is also likewise widely used in commerce. Its advantages can be exploited by EDI wherever products have to be delivered very quickly and very reliably. Because the automation of the data and document transmission, the delivery speed can be increased.

In addition, schedules sometimes change rapidly, especially in the automotive industry. As a result, the actual manufacturers must be able to rely on the flexibility of the suppliers. Only with smooth communication is it possible to coordinate projects between customers and suppliers.

Meanwhile, EDI software is an absolute must for more and more retailers:

  • Trading companies often have a worldwide network of suppliers and customers. The communication effort is correspondingly high.
  • The EDI standard is internationalized so that it can meet the requirement of worldwide deployment.
  • Trading companies can automatically forward incoming orders to suppliers. Even if there are problems in the production of a supplier, for example, this information can be transmitted directly, and appropriate measures can be taken.

Who is involved in EDI?

The question should really be: "Who is not involved in EDI?" Of course, it is the job of the EDI developer and the in-house IT department to integrate the software as such into the existing infrastructure. However, practically all process participants are affected by this:

Departments

As a rule, all departments in the company are connected to an ERP system. EDI uses this existing database to relay information. For example, this brings benefits for purchasing, as employees no longer need to manually review and share data. This reduces the susceptibility to errors, increases efficiency and frees up space for other tasks.

Customer

Customers today do not only want to receive high-quality products, but also the fastest possible deliveries. Thanks to EDI, communication costs for both the customer and the producer are reduced, which in turn leads to a faster delivery time.

Supplier

Suppliers face increasingly complex requirements from the producer side. In addition, they must deliver faster and faster, in addition to adjusting to changing delivery orders. Here, too, EDI ensures significantly more efficient communication among business partners and a smooth transfer of the necessary information.

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