The restrictions imposed by COVID-19 resulted in delays in the supply chain, as well as overall problems in business operations. At the same time, they revealed the need for digital technology, which is critical for both Business-to-Consumer and Business-to-Business relationships. EDI can play an important role in helping retailers overcome the effects of the pandemic and become more competitive.
Retailers are known to spend a lot of time and money on routine daily activities, such as submitting purchase orders, monitoring the supply chain, tracking inventory, and managing invoices and payments, which prove to be time-consuming if not automated, result in delays, and add extra cost to the process.
Moreover, non-automated processing entails errors in purchase orders and payments, which result in inventory delays, and can lead to penalties such as late payment fees. It may also mean a higher processing cost and more management time for both retailers and suppliers.
EDI addresses these challenges, as it helps retailers and suppliers streamline the process. With EDI, files such as purchase orders, shipping alerts and invoices are exchanged directly between the retailer’s and the supplier’s software systems, facilitating almost real-time interactions.
The most successful retailers recognize strategic functions in EDI, making it a critical part of their business, although smaller retailers tend to overlook this. EDI has a significant impact on business profitability, which can prove to be a competitive advantage in the post-Covid era.
Businesses are looking to EDI to minimize errors, speed up processes and reduce costs. EDI also provides transparency in the supply chain and frees up valuable time for employees and resources that can be devoted to vital operations.
The key aspects affected by EDI are software, processes, and suppliers.
Businesses should consider the capabilities of the software they are using for supplies, including whether it supports the types of messages they wish to use, such as advanced shipment alerts, and whether they have the required technical knowhow.
EDI can simplify many business processes related to supplies, from ordering, stocking and inventory updating to receiving and paying invoices. As it is a new technology, businesses will also need to train their teams, so that the solution proves to be truly effective.
EDI works best when partners are engaged, and retailers should take into consideration the suppliers they work with and their limitations. Knowing a supplier’s potential is a critical step that must be taken early on, so that any deficiencies in knowledge, technology or funding can be addressed, ensuring the solution will meet the supplier’s potential and needs. Understanding exactly where the business is and where it needs to go will ensure a smooth transition, minimizing unexpected issues that will affect the budget and team morale.