EDI (Electronic Data Interchange)
Electronic exchange of business data between different companies
EDI is based on a structured data format that defines the content of business documents in a form that can be read and processed by computers. It uses various standards and protocols, such as ANSI ASC X12, UN/EDIFACT, XML and others, to enable data communication between the parties involved.
Problems in the purchase order process
- Generally high level of manual activities
- Increased susceptibility to errors due to manual input of documents (error messages)
- Processes are often not automated
- Throughput times are often too long
- Lack of transparency of purchasing data and documents
EDI is suitable for the exchange of documents between buyer (sender) and supplier (recipient)
- Orders - ORDERS
- Order confirmations - ORDRSP
- Dispatch confirmations - DESADV
- Invoices - INVOICE
EDI supports
- productivity
- Competitiveness
- Profitability
- Transparency
EDI reduces
- Re-entry of data (manual activities)
- Error rate due to multiple entry
- Paper-based document flow
- Processing times
EDI enables
- Fast and reliable flow of information
- Optimisation and automation of business processes (on the purchasing and sales side)
- Fast and enhanced customer service (stronger customer loyalty)
- The challenge of introducing an EDI connection
- High initial and maintenance costs (software, data converter & setup)
- High IT costs
- High complexity
- Only profitable with a high purchasing volume (number of orders/order items)
To create an EDI connection, an initial item synchronisation is required. Dynamic synchronisation via OCI-PunchOut is recommended for this.
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