Electronic Data Interchange (EDI) involves automated data exchange between business entities in standardiZed formats. EDI transactions effectively contain the same data as a traditional paper-based transaction. Since it is automated, EDI greatly improves the speed of business transactions when compared to conventional transactions requiring human intervention.
EDI has been implemented in many organizations in order to further increase efficiency and increase profits. EDI provides the following benefits:
• Improved inventory management
• Improved accuracy
• Minimize paper user and storage
• Reduce cycle times and costs
Some of the Industries using EDI include:
Advantages of EDI
• Traditional paper-based business transactions are usually time consuming and required resources to handle order forms, invoices, shipping documents, and numerous other forms to gather and record important data.
EDI allows for the potential to have:
O single-point data entry
o reduced errors from data duplication
o on-line data for secure storage and easy access
o faster report generation for all levels of management
o automatic reconciliation
• EDI transactions are much quicker than paper-based transactions due to the fact that electronic information can be delivered and processed much faster than paper can. EDI saves time and money by eliminating physical packaging and postal/courier costs.
• EDI allows uniform data to streamline communications along the supply chain including vendors, customers, and financial institutions.
• Companies and enterprises who implement EDI will enjoy a distinct advantages over non-EDI competitors.