EDI Basics
What is EDI?
Eliminate Paper - Paper based trading relationships have some noticeable disadvantages, including stationary and printing costs, document storage and postage costs. EDI relationship’s are by nature, better for the environment.
Reduce Lead times and stockholding - Integrating electronic documents means they can be processed much faster, reducing lead times and speeding up payments.
Put simply, EDI is about doing business and carrying out transactions with your trading partners electronically. EDI covers most things that are done using paper based communications, for example placing order with suppliers and carrying out financial transactions. More formally, EDI is described as the interchange of structured data according to agreed message standards between computer systems, be electronic means.
Electronic exchange of information in the context of pure EDI effectively means without human intervention. EDI may seem difficult to distinguish from electronic mail (e-mail) as both involve the transmission of electronic messages between computer systems. What differentiates the two is that e-mail is intended for human readers and EDI messages are intended for automatic processing.
Benefits of Using EDI
Eliminate Data Entry - By automating transactions with your Trading partners, companies gain by reduced labor costs, elimination of human error and faster document processing.
Increase the quality of the Trading Partner relationship - Trading Partners favor customers and vendors who have quality EDI systems in place because electronic data interchange (EDI) makes you and attractive to deal with from your customers' point of view. In their eyes your company is cheaper and more efficient to deal with than a competitor trading who uses paper, your costs will be lower because you will require less manpower to process orders, deliveries or payments.