EDI connectivity: simplify exchanges with your suppliers and service providers!

EDI, or electronic data interchange, is an essential tool in the operation of a supply chain.

This innovative technology enables the various parties involved in a company’s supply chain (SMEs, SMIs, ETIs or large groups) to exchange information automatically and securely.

It enables companies to connect easily and efficiently with their trading partners. In other words, companies can exchange structured data in an automated and standardised way, which :

reduces transaction processing costs and times,
improves communication with trading partners
complies with the requirements of major clients
and improves the efficiency of logistics operations.

In this article, DDS shows you how EDI connectivity is the ideal logistics tool for simplifying your exchanges with suppliers, carriers, logistics service providers and customers.

What is electronic data interchange (EDI)?

Electronic Data Interchange (EDI) is a process that enables the electronic transmission of standardised documents between the information systems of different organisations or companies.

EDI simplifies all business transactions (commercial, administrative and logistical) while ensuring :

reduced costs,
optimised payroll,
and increasing the company’s productivity.

In practical terms, this tool enables your company to transfer (electronically and without manual intervention) data such as :

orders
delivery confirmations
invoices
dispatch notes
purchase orders, etc.

Thanks to EDI, these processes are fully automated, making it possible to :

Reduce the risk of errors due to the manual nature of the paper documents exchanged up to now,
speed up order
processing times,
and improve the visibility and traceability of goods throughout the supply chain.

How EDI technology works

The operating principle of EDI is based on the exchange of structured data between companies and their trading partners in an automated, standardised and secure way.

This exchange can be broken down into key stages, such as :

creation of the commercial document. The company creates a commercial document (order, invoice, delivery note, etc.) in its own information system;
translation of the document into an EDI message. The company’s EDI software translates the commercial document into an EDI message structured in accordance with EDIFACT, ANSI X12 or XML standards;
sending the EDI message. The EDI message is sent via a secure network, such as a VAN (Value Added Network) or AS2 (Applicability Statement 2) network, to the recipient trading partner;
reception and translation of the EDI message. The recipient partner receives the message and its EDI software translates it into a commercial document in its own information system;
processing the commercial document. The partner processes the document received automatically, which reduces transaction processing costs and times;
Sending an acknowledgement of receipt. The trading partner sends an electronic acknowledgement to confirm that the EDI message has been received and processed correctly.

The description of this sequence of tasks shows that the entire data exchange process is therefore fully automated and standardised, enabling companies to:

improve communication with business partners,
comply with the requirements of major clients.

EDI standards: EDIFACT, ANSI X12 and XML

EDI is a technology that uses standards and protocols to exchange structured documents.

The documents are transformed into a standard format, compliant with EDI standards, by specific software or services.

The most common EDI standards are :

EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport). It determines the syntax and format of EDI messages, and is mainly used in Europe and in the transport, logistics, automotive and distribution sectors;
ANSI X12 (American Natinal Standards Institute X12). It is mainly used in the healthcare, finance, insurance and government sectors;
XML (Extensible Markup Language). This is a universal standard that makes it possible to create EDI messages tailored to each sector of activity or company.

EDI follows international standards that specify the format, content and structure of the documents exchanged, such as :

orders, invoices
delivery notes or shipping notices.

EDI connectivity can be achieved by various means, such as private networks, on-line services or via the Internet.

The transmission network must be secure and reliable, to ensure data confidentiality, integrity and traceability.

The most common communication protocols are AS2, FTP, SFTP, HTTPS and VAN (Value Added Network).

XML (Extensible Markup Language) is a universal standard that can be used to create EDI messages tailored to each business sector or company.

The use of EDI technology in logistics

EDI (Electronic Data Interchange) technology is a highly effective tool in logistics and supply chain management for optimising the efficiency, reliability and speed of logistics operations, whether at a strategic, operational or analytical level.

The information exchanged via EDI is accurate, complete and reliable, making it easier to take decisions and plan logistics and transport operations.

EDI messages are structured into segments and data elements, which are defined in EDI standards.

Each segment contains specific information, such as sender, receiver, product and quantity information. Data elements are the basic units of information exchanged, such as product codes, quantities and dates.

Companies can use EDI software to translate incoming and outgoing EDI messages into their own data format. This enables seamless integration with their information systems.

EDI software can also provide :

transaction tracking and tracing capabilities,
as well as error and exception management tools.

In terms of business strategy, EDI enables companies to connect with their trading partners (suppliers, carriers, logistics service providers and customers). This connectivity facilitates coordination and collaboration between the various players in the supply chain:

reducing costs and delivery times
and greater customer satisfaction.

In terms of managing operational tasks, EDI is used to automate ordering, invoicing and payment processes.

In transport operations, EDI is used to track shipments and deliveries in real time. This enables more efficient management of logistics operations and better visibility of the supply chain.

The importance of EDI connectivity in exchanges with your suppliers

In the logistics sector, EDI (Electronic Data Interchange) is commonly used to optimise and structure purchase orders, order confirmations, dispatch notifications and invoices with suppliers.

Whether your business is an SME or a large group, optimising the accuracy and speed of exchanges with your suppliers is crucial to improving your company’s profitability and responsiveness.

This reduces costs and payment times and improves customer satisfaction.

EDI also helps to:

Reduce errors, especially when manually entering orders,
and speed up the processing of commercial and accounting documents.

Thanks to the electronic confirmation of orders received, and the automatic accuracy of quantities, tracking numbers, expected delivery dates and quantities shipped, disputes are reduced in number and complexity, making it easier to manage relations with suppliers.

The importance of EDI connectivity in exchanges with your suppliers

EDI is an essential tool for exchanges with logistics and goods transport service providers.

It enables commercial transactions to be automated and standardised, considerably reducing errors and improving the efficiency of exchanges between companies.

EDI is commonly used in the freight transport sector for :

transport orders
transport order confirmations
shipping notices (tracking numbers, expected delivery dates and quantities shipped),
and invoices with freight forwarders.

Carriers can send information on the status of shipments, such as estimated arrival times and any delays, directly to companies. Companies can monitor stock levels in real time. This allows them to replenish products in line with demand.

Thanks to this tool, SMEs/SMIs/SMIs and large groups can improve the accuracy and speed of exchanges with their logistics and goods transport service providers, reducing costs and improving customer satisfaction.

It also makes it easier to manage relationships with service providers, reducing disputes and simplifying shipment tracking.

The importance of EDI connectivity in exchanges with your customers

EDI is a technical tool that enables structured data to be transmitted electronically between companies and their customers, and has found its place in the logistics and transport sector.

By optimising the quality and efficiency of operations using shared standards and protocols, it facilitates the following transactions:

orders. Customers can send electronic orders to companies, reducing manual input errors and speeding up order processing;
Order confirmations. Companies can electronically confirm orders received, specifying quantities of each item and delivery times;
shipment notifications. Companies can send up-to-date, real-time information on shipments in progress (tracking numbers, scheduled delivery dates, quantities shipped, etc.);
Invoices. Sent electronically, invoices are available directly to the customer, whether a business or an individual, reducing payment times and making your company’s accounting easier.

As soon as you use EDI for your transactions, your company’s management becomes more accurate and exchanges with your customers faster.

Using EDI connectivity improves customer satisfaction, particularly by reducing errors and disputes.

EDI connectivity for SMEs and SMIs

EDI can help SMEs and SMIs comply with the requirements of major clients.

SMEs can :

connect easily to the EDI networks of major groups,
meet their requirements in terms of message format and content.

In addition, EDI can help small and medium-sized businesses (commercial or industrial) to boost their competitiveness by:

by reducing costs ;
improving the efficiency of logistics and transport operations.

Used to automate the ordering, invoicing and shipment tracking processes, this tool will reduce administrative costs and improve visibility of logistics operations, all of which are highly beneficial to your company’s proactivity!

At DDS, EDI exchanges are at the heart of our TMS technology, right from our 100% free, no-obligation offer.

Popular with many SMEs and SMIs, this offer can be implemented in your supply chain in 30 minutes.