ERP EDI Integration Reduces Costs, Boosts Efficiency

ERP EDI Integration Reduces Costs, Boosts Efficiency


Why is ERP EDI Integration so vital to the success of manufacturing companies today?

It’s 6pm and the last package from the assembly line has been boxed, wrapped, and carried to the shipping bay. This package is destined for the shelves of a national pharmacy retail chain. How will the retail customer know their package is on it’s way? How will they make payment for the goods they received?

A smooth supply chain requires superb and rapid communication between partners. For decades, the most popular technology system to manage this interplay of shipments and payments has been Electronic Data Interchange or EDI. ERP EDI integration is the industry standard for exchanging data between vendors and customers by automating communications. EDI is widespread in industries that operate at high volumes, like automotive, manufacturing, drug stores, big box retail.

Why ERP EDI Integration?

The automation of EDI reduces reliance on imperfect manual human processes involving phone calls, paper invoices, faxes, and emails. The result are faster turnaround times, fewer mistakes, and greater efficiencies in staffing. EDI reduces the handling costs of organizing, sorting, and distributing paper documents by storing and manipulating data electronically. The benefits of electronic communication include eliminating manual data entry, reducing shipping and billing errors, and increasing the speed by which partners receive and input data into their internal enterprise management systems.

The benefits of EDI include eliminating manual data entry, reducing shipping and billing errors, and increasing the speed by which partners receive and input data

Early versions of EDI were simple and disconnected from other enterprise software. In ERP EDI integrations of the modern era, protocols enforce best practices and the data is wrapped into modern technologies like ERP. Furthermore, the complexities of data structures and formats can be masked by data exchange middlemen who standardize EDI implementations across companies.

While years ago an EDI implementation might have required hundreds or thousands of hours of work to map individual data field to each other, today there are tools and processes that make this process seamless and easy. The resulting EDI systems provide invaluable supply chain data communications for many of the largest companies in the world.

EDI as part of your ERP platform can help reduce costs and automate tasks

How is EDI different from an API?

For those comparing EDI to an API, the important principle is that EDI is a data exchange system that is customized by design. It’s expected that every company will implement their own variations. That means while a human-readable data format like JSON/REST will be somewhat easier to implement, a similar process of mapping to the partner’s data format will need to be performed during system setup. And for experienced EDI integration vendors, there is likely not a large difference in implementation times between an elegant JSON interface and a primitive ODETTE document so long as there is clear documentation and support for two-way protocols such as system receipt acknowledgements.

EDI often holds the biggest cost savings for companies who are currently manually managing their supply chain communications. Other benefits for smaller companies include opening the opportunity of working with big national partners, many of which mandate a specific EDI implementation in place of human communication by email, mail, or phone.

As ERP technology has become a critical link between manufacturing, transportation, and retail companies, the need for seamless data communication through EDI has increased. Software solutions like abas ERP have filled this gap by implementing robust backend EDI interfaces with front-end management and administration tools. With modern ERP software, implementing EDI has never been easier.

What does abas EDI offer?

abas EDI is an ERP module that provides the data mapping between EDI files and transactions that occur in the abas system. Regardless of the backend EDI technologies and file formats, the abas EDI software abstracts the complexities so that diverse company EDI implementations can be unified. Data fields in the EDI file will be associated with data fields in the ERP console.

EDI often holds the biggest cost savings for companies who are currently manually managing their supply chain communications

For companies who are getting started with abas ERP, the setup of the EDI system can be performed along with other onboarding activities. While initial setup may require consultation with experts, ongoing management of the system can be done by anyone in a self-service model using a tool called abas EDI Configuration.

abas EDI Configuration performs the magic of setting up the complex EDI mappings of data. Because different companies use different formats for EDI, a setup period is generally required to make sure the data can be understood by the ERP. Both traditional EDI formats like EDIFact, ODETTE, and VDA are supported and universal data formats like ANSI and XML. With abas EDI Configuration, this data association process is performed with a graphical desktop tool that shows the field mappings between the ERP system and the segment numbers and columns of the EDI data files. This can be a big improvement over legacy ERP systems that might require a software developer to write thousands of lines of code to specify what actions need to occur to the data fields.

Data synchronization with EDI

Once EDI is integrated with ERP, people in two different companies can view the same data synchronized across companies. Their respective ERP systems can display the information that would once have been contained in paper documents of an earlier era. For example, a paper shipment order would inform a warehouse to ship product to a retailer. Now in each ERP system, an employee can view the same data of destination address, billing address, and the list of product numbers with quantities.

Whether for companies processing a few hundred orders or millions of orders, the use of EDI can result in cost savings. Manual communication about invoices and shipments often requires a substantial amount of employee time. And automation of trading partner communications leads to faster turnaround times, fewer errors, and better reporting.

Next steps: If you're using an ERP system without robust EDI capabilities, maybe it's time for a change. To learn more about what abas ERP can offer, contact us today, or download the Writing a Better ERP RFP Guide