Understanding the Benefits of EDI in Retail Industry Electronic Data Interchange for retail industry was adopted more than 30 years ago. EDI replaces manual processes that used phone calls, paper or faxes as communication between companies ordering or selling goods and speeds up transactions and reduced costs. The EDI process in retail industry has proven to be the most efficient and secure process to exchange business documents such as the Purchase Order and Invoice globally.
The benefits of EDI Big retailers (Walmart, Amazon) require all of their suppliers to also use EDI. To comply, suppliers are required to establish an EDI solution by building it in house or Or Outsourced, What's Best For Your Business. Keeping EDI In-House is expensive and involves multiple components; EDI software, communications software, EDI transmission methods, mapping and translating software (and specialists for the process) and a dedicated team to manage upgrades, support and maintenance. A third party solution will handle the mapping, testing, integration and on-going support. Advances in technology have driven down the cost of EDI and oftentimes, it is less expensive to go with a third party provider. In addition to the opportunity to connect to large retailers like Walmart EDI, there are many other benefits of setting up EDI: 1. Cost savings & Speed: When a retail company implements EDI, the processing costs for business documents are slashed by at least 35% by eliminating the costs of paper, storage, printing, reproduction, filing, postage. EDI reduces more business operations with fewer human resources. EDI speeds up the administrative and operational processes by 61% because it enables real-time communication like buyer can submit a purchase order and supplier will receive it instantly. 2. Reduce human error and Increase data efficiency: EDI uses automation, improves an company’s data quality delivers at least a 40% reduction in transactions with errors. EDI mistakes in data entry or taking orders by telephone and lost files, etc. are avoided. EDI also avoids mistakes in data entry or taking orders by telephone and lost files. EDI gives a competitive advantage and raises efficiency into company system. EDI integrated into internal inventory gives possibility to take full control over goods supply and their delivery to clients.