Smooth, standardized communication is essential to optimize supply chain efficiency. But how can this be achieved? How can logistics operators share information and communicate effectively with their trading partners throughout the supply chain? The answer can be summed up in three letters: EDI.
EDI stands for Electronic Data Interchange, and enables the electronic exchange of documents between companies in a standardized format, eliminating the reading errors and loss of information associated with the exchange of paper documents.
EDI has proved its worth in many fields, optimizing interoperability and guaranteeing more efficient supply chain management. Since the health crisis of 2019, this system has even become an indispensable tool for remaining competitive and streamlining a large proportion of transactions.
What is EDI? How can it be integrated into your supply chain?
Electronic Data Interchange (EDI) is the automatic exchange of information between two entities using standardized, machine-to-machine messages. This system reduces human intervention in information processing, making it faster and more reliable. Its aim is to automate data processing and eliminate the use of paper.
Electronic data interchange offers a number of advantages for companies:
- More reliable, optimized business processes : EDI brings efficiency, productivity and improved traceability to exchanges.
- Lower costs : electronic data interchange considerably reduces transaction processing costs by automating processes and eliminating re-entry errors.
- Faster exchanges : standardized EDI messages speed up the flow of information between trading partners.
- Improved collaboration with trading partners : by using common EDI standards, partners can exchange business documents automatically and consistently.
- Greater data security : EDI uses secure transmission methods, guaranteeing the confidentiality and integrity of the information exchanged.
EDI brings its share of benefits to companies that adopt it. Research based on the benefits of electronic data interchange has shown that the use of such a system can reduce document processing costs by 70%. It has also demonstrated the considerable time-saving benefits of using a digitized solution: transactions that used to take several days are now completed in less than an hour!
EDI is widely used in logistics, since it promotes fluid, standardized communication between supply chain players. This technology improves the electronic exchange of commercial and logistical documents between companies, replacing paper-based exchanges with information transfers encoded in a standardized software-to-software format.
It is estimated that almost 90% of companies in the logistics sector use EDI for their day-to-day operations. This widespread use is due to the significant advantages offered by EDI in terms of the efficiency, speed and accuracy of information exchanges.
How does EDI improve logistics processes?
Integrating EDI into logistics processes improves efficiency and productivity. By automating data exchanges, EDI reduces reading errors and the risk of information loss associated with paper-based exchanges.
This automation also facilitates the synchronization of information between the various players in the supply chain, helping to optimize goods flows and reduce order processing times.
According to a study by the Association française de l'informatique en entreprise (AFDEL), using EDI in logistics can reduce order processing times by up to 60%, and cut administrative costs by 20-30%. This increased efficiency promotes :
- Better inventory management.
- Reduced delivery delays.
- An overall improvement in customer satisfaction.
The advantages of using EDI in logistics
Automated data exchange reduces the administrative costs associated with logistics processes, such as manual data entry, paper processing and associated errors. EDI can reduce order processing costs by up to 35%..
The implementation of electronic data interchange speeds up logistics processes by automating information exchanges. Companies benefit from shorter processing times, better inventory management and optimized goods flows.
Thanks to the standardization of exchange formats, EDI also guarantees the consistency and reliability of data transmitted between trading partners. It is estimated that EDI can reduce the number of transactions containing errors by 30 to 40%. As a result, the risk of errors and disputes is reduced, improving customer satisfaction while strengthening business relationships.
An Application Programming Interface (API) is a method of enabling two or more computer programs to communicate with each other. It is a type of software interface that provides a service to other software.
An API can be seen as a set of rules and protocols that enable different software programs to connect and exchange data and services in a consistent, standardized way.
The combined use of API and EDI can be beneficial for companies wishing to :
- Automate data exchange
- Improve supply chain visibility
- Optimize their logistics processes
APIs enable fast, secure communication between applications, while EDI facilitates the direct transfer of data between different systems.
By combining these two technologies, companies can optimize performance, reduce costs and benefit from complete visibility throughout their supply chain, helping them to make faster, more informed decisions.
When talking about EDI, it's impossible to miss several acronyms such as :
Each represents an EDI standard - a system - developed for a specific business sector.
EDIFACT stands for "Electronic Data Interchange for Administration, Commerce and Transport". It is used in various industrial sectors, mainly in shipping. The EDIFACT standard defines the syntax and content of EDI messages. It is a way of implementing EDI within a specific framework, to meet the needs of each sector.
GS1 is an international organization that develops and maintains standards for the exchange of commercial information. These standards are used in many sectors, including retail, healthcare and logistics. GS1 is best known for its barcode system, which is used worldwide to identify products.
INOVERT is a French standard for electronic data interchange in the transport sector. It was developed by GIE INOVERT, a French economic interest grouping. The INOVERT standard is used for the exchange of commercial and logistics documents between transport companies and their customers.
ODETTE (Organisation for Data Exchange by Tele Transmission in Europe) is an organization created by the European automotive industry to develop standards and services for electronic data interchange (EDI).
ETEBAC (Échange Télématique Banque-Clients) is a French banking teletransmission protocol. It enables the exchange of files between banks and their customers. The files exchanged can be remittance files (transfers, direct debits, etc.) or statement files (account statements, direct debit statements, etc.).
EDI software tools are specially designed to automate and secure data transfer or communication between two or more remote workstations.
Would you like to benefit from the advantages of digital data transmission? These tools can help!
- Docloop : our tool automatically processes, transfers and structures any type of document. Docloop can interact with all the other services and software in your ecosystem. Whatever the format of your documents, their technology is capable of receiving and exporting them to most other services without your intervention.
- Business System Integrators (BSI): BSI provides complete EDI solutions, including on-premise and managed cloud options. Their solutions can be deployed standalone or integrated with existing ERP or WMS systems.
- Youredi : an integration platform that helps logistics and supply chain companies automate API and EDI transaction processes.
- Lobster_data : this tool lets you connect to anyone, on any system, in any format. It streamlines processes with pre-configured industry standards and over 14 partner channels.
- Cargoson : Cargoson is a cloud-based transport management system (TMS) that helps shippers organize their daily logistics tasks.
The role of this software is to automate and standardize data exchanges between business partners. These tools facilitate the transformation, translation and transmission of data in a format that can be understood and accepted by all parties involved in the exchange. They also guarantee data security by ensuring secure connections and following appropriate security protocols.
Electronic Data Interchange (EDI) is a system for the electronic exchange and processing of standardized business documents between trading partners. It is an efficient and secure method for transmitting information such as orders, invoices, shipping notices, etc.
Software tools such as Docloop, BSI, Cargoson, etc. improve the efficiency and accuracy of EDI in several ways:
- By automating processes.
- By standardizing data.
- By reducing costs.
In logistics and the supply chain, electronic data interchange is now widely used to automate communication and document handling processes. It offers a number of advantages, such as improved operational efficiency, better visibility of goods flows and improved coordination between supply chain players.
To implement this information exchange, software is required. It is this software that converts commercial documents into electronic formats, validates data, secures and manages data exchange processes.