A manufacturer in the Netherlands sends a purchase order to its supplier in China, only to receive an electronic document stating that the item is out of stock. The company immediately sends the purchase order to an alternate supplier in Austin, Texas, who confirms the order. All this happens within a few minutes. That’s how critical electronic data interchange (EDI) implementation is for business success.
But is EDI implementation a cakewalk? Not really! Though EDI ensures uniformity and efficiency throughout the supply chain process, it comes with its challenges. However, it is possible to overcome these roadblocks with thorough planning and implementation. This blog takes you through the primary challenges in EDI implementation, along with ways to overcome them.
5 Ways to overcome primary challenges in EDI implementation
Here’s more information on the top challenges in EDI implementation and the ways to overcome them.
1. Difficulty scaling up EDI
With a diverse set of data rules and invoice formats available in the market, it is difficult to determine the scale and scope of EDI software during implementation.
You can scale your EDI program in the following ways:
- Ensure that your EDI solution can accommodate numerous sets of document formats and business rules of trading partners. Most trading partners can support up to 100 unique business rules, including data elements, document fields, and validations (business rule-driven) like shipping addresses or store numbers.
- A direct ERP integration with EDI transactions is a must if you manage three or more trading partners. If you have two or fewer trading partners, you can employ ‘swivel chair integration,’ which involves manually entering data into ERP through a stand-alone EDI
- EDI outsourcing can also be a viable option if you do not have enough resources to manage an in-house EDI program. A third party can take care of management, testing, and communication with your trading partners.
2. Impact of bad data
Inconsistent, inaccurate, or incomplete data is one of the main challenges in EDI implementation. Many bad data issues originate at the order level. Typical data inconsistencies include incorrect prices, out-of-stock or discontinued items, and duplicate orders. These inconsistencies mainly occur while manually entering the orders into the system.
The most efficient way to address this issue would be to set up an exception-handling tool to notify your team and your trading partners about the bad data before it affects your ERP system. The exception-handling tool helps set aside documents with missing or incorrect data, automatically improving the EDI process and reducing costs.
3. Issues with the speed of document processing
Your EDI system delivers documents in real-time, but can your ERP process those EDI documents as soon as they are received or ready to be sent?
Real-time document processing is the need of the hour. If your document flow is affected due to a processing error, you can switch on notifications and alerts to update you on discrepancies. To provide faster and uninterrupted service to your customers, you can set up mailbox imports or directly forward the documents from the EDI network on a real-time basis.
4. Lack of transparency
Complex supply chain processes can make transparency between trading partners a challenging task. Although EDI started as a means to automate document exchange, with supply chains becoming increasingly complex, EDI’s value has shifted to provide better visibility of inventory.
Businesses are no more interested in bulk fulfillment. Instead, companies are actively adopting one-to-one models for data transfer between trading partners. Transparency is of high priority in direct-to-consumer models to ensure seamless data flow between the partners. You can implement new EDI transaction sets to ensure better transparency in the system. Additional EDI transaction sets may include shipment status message, package status, inventory availability, motor carrier tender and response, and bill of lading.
5. Lack of interoperability
It is difficult to do business with a trading partner who has not implemented EDI.
You can persuade your trading partners to adopt EDI. By doing so, you would make your job easy and add value to your trading partner’s business. Your partners would be willing to do more business with you as you have their best interests in mind.
Sometimes, during EDI implementation, the most accepted EDI standards may not suffice. In such cases, you will need a flexible EDI solution that can handle different business scenarios according to the growing needs of your business.
Now that you are aware of the ways to overcome challenges in EDI integration, where do you begin? The first step that you can take is to understand your business challenges. Ask questions such as:
- What does our customer or trading partner expect?
- Is our supply chain digitized?
- What are our end-to-end revenue processes? (e.g.: order-to-cash, procure-to-pay processes)
- What are the EDI standards that we want to follow?
The challenges in the implementation of EDI need not hamper the efficiency of the B2B integration process. You are bound to have questions, and it’s only right that you leverage the expertise of your EDI service provider to answer your questions and equip you with the right tools to manage and overcome these challenges.
EDI is the most used B2B e-commerce technology that can drive efficiency, cut costs, and increase customer satisfaction. If you are looking for more information on how to streamline your EDI process, here’s an eBook that could prove to be helpful in your EDI implementation journey.