Electronic Data Interchange (EDI) has changed the way companies communicate essential data. It used to be that, when working with disparate computer systems, companies had to input data manually because their systems could not “talk” to each other.
Even if every department in a company had the programs and applications needed to complete work tasks, they may not all communicate well internally and externally. To alleviate this problem, companies may invest in a more centralized network where data is shared between computing resources to eliminate the need to constantly input data manually.
However, the problem remains when a company works with multiple partners and vendors in the logistics industry. Manufacturers, suppliers, warehouse operators, 3PLs, distributors, and shippers often have unique computing systems. Again, the difference between these applications and computing systems leads to a lack of accurate data communication between companies. Workers must manually input invoice documents, payment transactions, and shipping information. EDI changes this, allowing data to communicate effortlessly — without manual input.
EDI DEFINED
As mentioned above, EDI stands for electronic data interchange. This technology allows for disparate systems between companies to share documents and information by changing them into digital data. As a result, computing systems can more easily interpret the data and extrapolate required information that is sent to the appropriate department and application.
For example, if a seller receives an order from a customer and sends that order to a fulfillment center, the fulfillment center does not have to manually input the order into its computer systems to process it. Instead, EDI helps the seller’s computer communicate with the fulfillment center’s network systems as the data is automatically transferred.
HOW SHIPPERS USE EDI
With EDI handling transactions, data within one application is categorized by its nature and location. Then, the data is sent to the required destination computer system for further processing. Shippers and 3PLs rely on EDI in shipping to handle the enormous amounts of data coming from vendors and partners as the shipment makes its way from the manufacturer to the end-user.
EDI allows applications to communicate with customers without using faxes, emails, or postal mail services. This interface also automates onboarding processes, purchase orders, load tenders, invoices, RFQs, loan applications, and other work processes.
BENEFITS OF EDI
Numerous benefits are found when using EDI in logistics management:
- Enhanced automated processes: With data communication happening automatically, EDI eliminates the need for workers to perform manual data entry.
- Error reduction for better data accuracy: EDI comes with rigid standardization protocols for transmitted and received data. This standard reduces the amount of data errors that may normally occur during manual data entry work.
- Provides data traceability and reporting: EDI can work with a range of network systems, offering more comprehensive data analysis and reporting.
- Improves productivity: By eliminating data communication normally done by employees, they may focus on other productive tasks.
TYPES OF EDI
Shippers and 3PLs may have EDI in a range of network systems and processes to streamline their operations. The following list showcases examples where EDI may be used in operations, such as EDI freight forwarding:
- EDI 109: Vessel Content Details
- EDI 129: Vehicle Carrier Rate Update
- EDI 217: Motor Carrier Loading and Route Guide
- EDI 224: Motor Carrier Summary Freight Bill Manifest
- EDI 312: Arrival Notice – Ocean
- EDI 325: Consolidation of Goods in Container
- EDI 356: U.S. Customs Permit to Transfer Request
- EDI 463: Rail Rate Reply
- EDI 715: Intermodal Group Loading Plan
- EDI 858: Shipment Information
- EDI 924: Loss or Damage Claim: Motor Vehicle
- EDI 926: Claim Status Report and Tracer Reply
(Please note, there are many other processes where EDI can be placed, but they are too numerous to be listed here.)
WSI EDI INTEGRATION CAPABILITIES
EDI in transportation offers automated solutions for shippers and other logistical solutions to automate their processes and better communicate data between companies. At WSI, our third-party logistics services allow for EDI integration to fit into your business capabilities and boost productivity.
Reach out to WSI today to learn more about this process.
