Why is my business partner requesting I do EDI with them?

December 11th, 2009 by Joe_EDI

Many factors come into play when your business partner requests you become EDI capable.  EDI can provide a clear insight into a company’s supply chain operations providing them with better accuracy in ordering and receiving your goods.

One of the many challenges that your business partner faces is having a large number (sometimes hundreds) of vendors communicating business transactions with them.  On average a big box retailer receives hundreds of transactions a day.  Can you imagine if all those transactions were done via mail, fax or email?  Your customer would never be able to efficiently run their supply chain operations, and the manual processing required would cost them millions in lost opportunities, waste and revenue.  This would also create opportunity loss and negatively impact cash flow for your business.  By utilizing EDI your invoices are sent electronically and imported into your partner’s financial system in minutes verses days or weeks, speeding up the payment process and helping you get paid faster.

EDI is critical in helping you get your products on the shelves of major retailers.   With EDI, business partners are able to receive business data such as invoices, purchase orders, shipping information, etc., in a standard format.  Data that is formatted for EDI is often controlled by customer-specific business rules designed to further reduce manual processing and optimize operations.  

An example of this might be seen in your business partner’s warehouse.  If they are receiving EDI Advance Ship Notices from their vendors, they are better able to determine what shipments will be arriving at the receiving dock.  This data assists them in scheduling and managing receiving which helps the warehouse run efficiently. 

There are many advantages that benefit both you and your business partner when adopting an EDI program:

• Improved Accuracy
• Reduced Data Entry
• Improved Operating Procedures
• Enhanced Customer Service
• Increased Cash Flow
• Better Inventory Management
• Increased Productivity

EDI can also be a competitive advantage in expanding your sales to more large, big box retailers, grocery stores, and other EDI-enabled customers.  Suppliers that can easily accommodate customer-specific EDI requirements often achieve better vendor score card rankings, improve customer satisfaction and ultimately discourage your customer from looking at competitive vendors. 

Ready to begin exploring EDI solutions?  Check out this guide: How to Evalute EDI solutions  It’s 26 pages but an easy read with checklists, surveys, assessments and more.