Enterprise-level supply chain management has always been a complicated, multi-layered process. From on boarding new vendors to interfacing with third-party logistics providers (3PLs) and maintaining compliance with industry-specific EDI standards, technological advancements seem to bring increasing complexity and a greater variety of data formats to maintain.
Let us go over how we can simply the challenges of managing and thriving in an environment where every supplier and vendor has its own EDI data standard. Using B2B EDI for your entire supply chain you can not only fast track digital transformation in your organization but you can become the supply chain hero.
You know there are multiple and industry-specific EDI standards. EDI which stands for Electronic Data Interchange is the computer to computer exchange of documents. In a Supply Chain EDI, documents like purchase orders, shipping notifications, invoices, payments, and other documents are exchanged in electronic format between trading partners. EDI eliminates paper mail, fax and email document exchange between businesses. In a paper supply chain environment, the buyer would send a purchase order to the supplier, the supplier would send a confirmation email, then send paper shipping notification, invoices, etc. All of these documents would have to be entered and processed manually by the buyer. Rather than exchange paper documents, the virtual exchange of documents via EDI brings about digital transformation by automating the process, eliminating paper trails, improving efficiency and reducing errors.
B2B is Business to Business exchange of documents.
In Supply Chain EDI, the complications arise from:
Each vendor uses its own EDI standards, protocols, and methods. If you are a large vendor like Walmart or Amazon, you can dictate the format in which your suppliers have to send the EDI documents. Smaller suppliers have to comply with the requests from larger vendors and it leads to multiple protocols and formats that they need to use.
In the current environment where businesses use a large number of trading partners supply chain, EDI becomes very complex. Businesses are realizing that managing their own supply chain is an expensive process that takes away from its core mission of providing the product to its customers.
In spite of the tremendous advantages of B2B EDI over paper-based processes, companies struggle with building an effective EDI network. Effective Supply Chain B2B EDI requires EDI standards, formats, mapping, translation, and transmission software. Creating all these in-house requires in-depth knowledge, expertise in EDI technologies and a huge outlay on infrastructure. Once it is built, then it needs an upgrade, support, and maintenance.
The advent of Cloud and SaaS (Software as a Service) has resulted in several managed EDI service offerings. Managed service providers have stepped in to manage the day to day complexity of supply chain management. They use powerful EDI translator to translate the data so it can be used by software applications for straight-through processing.
Typical Managed Service Providers (MSP) solution includes:
There are MSP that offer innovative single platform that can handle all and any data formats, protocols, translation, transmissions allows you to manage all vendors, suppliers,clients and distributors in one place. A single platform supply chain vendor with real-time status dashboards tremendously reduces costs, increases efficiency and brings about a digital transformation across your entire B2B supply chain ecosystem.