EDI enables different manufacturers, suppliers, wholesalers and retailers and other commercial trade connecting their production management, material requirements, sales management, warehouse management, commercial POS system organic combination to improve their operating efficiency, and create a higher profit.
What is EDI?
Electronic Data Interchange(EDI) is a process that can transmit and deal with documents, such as orders, invoices and invoices, through the communication network without human intervention.
Why is EDI?
Always starts from cost, EDI can help save significant costs, and each time you add a document, you can increase the rate of your savings.
The average paper requisition to order costs a company $37.45 in North America, but with EDI, the costs reduced to $23.83 in North America.
EDI also save the time, improve the accuracy, and reducing the time of order processing and delivery help enterprises to reduce inventory.
- Usually it takes less than an hour to get through EDI, instead of 5 days when using Paper documents.
- EDI also reduce 30% to 40% errors in transactions.
EDI can improve the efficiency of chain. Automating paperwork work allows employees to have more time to handle more valuable work and increase their productivity.
How does EDI work?
An example will be helpful for this section. Suppose Company A is a supplier, company B is a customer and both company use SAP Business One System. What’s the process when Company B orders inventory from Company A every time?
The original way to finish one document Process likes below. The Company B make a Purchase Order, print it out and email or fax to Company A. Company A create the correspond Sales Order and send them to Company B for confirmation. It will be plenty of time if the orders between two companies are huge.
If we use EDI with this process, things get easier. Company B creates a purchase order. EDI system converts this purchase order information to EDI standard documents, and then sent it to Company A. The SAP Business One System of Company A receives the EDI document, decodes the Company B's procurement information based on Pre-agreed EDI standard, automatically create a sales order, and sent to the Company B to confirm the information. Company B then know Company A has confirmed their Purchase Order. We don’t need to send or input the information by our staff anymore.
To start EDI system, we need all the companies support EDI system. If you are SAP Business One user, you don’t need to worry about it. SAP Business One support EDI from version SAP Business One 9.0. You are always welcome to contact with us for more information.