Benefits of Electronic Data Interchange (EDI)

The benefit of electronic trading is well documented. Here are the top five reasons why businesses adopt EDI -

i)  Remove document re-entry -

By removing the manual keying of key business documents such as Orders, Invoices, Acknowledgments and Dispatch Notes your company can benefit significantly by:

• Reduced labour costs

• Elimination of human keying errors

• Faster document processing

• Instant document retrieval

• Remove reliance on the postal service

ii) Eliminate Paper -

Paper-based trading relationships have some inherent disadvantages when compared with their electronic trading equivalents:

• Stationery and printer consumable costs

• Document storage costs

• Lost documents

• Postage costs

iii) Reduce lead times and stockholding -

Electronic trading documents can be delivered far more quickly than their paper counterparts, thus the turnaround time from order to delivery can be reduced.

By using EDI for forecasting and planning, companies are able to get forward warning of likely orders and to plan their production and stock levels accordingly.

Companies receiving advanced shipping notes or acknowledgments know in advance what is actually going to be delivered, and are made aware of shortages so alternate supplies can be sourced.

Integrating electronic documents means they can be processed much faster, again reducing lead times and speeding up payments.

iv) Increase quality of the trading relationship -

Electronic trading documents when printed are much easier to read than copies faxed or generated on multi-part stationery by impact printers.

Accurate documents help ensure accurate supplies.

Batches of electronic documents are usually sequentially numbered, therefore missing documents can easily be identified, not causing companies to wade through piles of paper.

v) Competitive Edge -

Because electronic data interchange (EDI) makes you attractive to deal with from your customers' point of view, and you are in their eyes cheaper and more efficient to deal with than a competitor trading on paper, your costs will be lower because you will require less manpower to process orders, deliveries or payments.

It is no accident that the leading UK retailers all rely on EDI for placing orders and receiving invoices - they know the benefits they get and the costs that can be saved.

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