Electronic Data Interchange (EDI)
The electronic data interchange process is the computer-to-computer exchange of business documents from business to business. EDI replaces the faxing and mailing of paper documents. EDI documents use specific computer record formats that are based on widely accepted standards. Each company may use the flexibility allowed by the standards in a way that fits their business needs. Over 80,000 companies have switched to EDI in order to improve efficiency, and electronic data interchange is used in a wide variety of industries.
EDI provides many benefits, the most popular of which is that computer to computer EDI is a lot less expensive than paper documents. Processing an EDI order costs less than a dollar compared to a paper document that can be up to 70 times the cost. Electronic Data Interchange requires much less labor and time. Also, with electronic data interchange, the chance of an error occurring is far less than when processing orders by hand.
More EDI benefits include:
- EDI transactions flow faster and are more reliable
- Reduction in inventory and more warehouse space
- Less out of stock occurrences
- Fewer emergency expedites
- EDI orders can take as little as 1 day
There are a few possible drawbacks with electronic data interchange, as with anything. If you use both paper and EDI implementation, than you must manage both. But remember, EDI is much more efficient than paper. Your business must ensure they have the resources in place to support EDI.
The programmers at Page One Web Solutions make sure data security and control are maintained through out the transmission process using passwords, user identification and encryption. Both the buyer’s and the supplier’s EDI applications will edit and check the documents for accuracy.