6 Benefits of EDI in the Logistics Industry
The disruption of recent years has caused significant problems for the 205,000 logistics companies operating in the UK.¹ In an industry which requires a constant flow of documents across supply chains, getting back on track following the pandemic has been difficult.
Furthermore, manual processes and the continuing use of paper documents have, even in stable times, contributed to communication barriers and supply chain management issues. Fortunately, there are solutions with the capacity to make this a thing of the past.
By enabling the real-time exchange of documentation, electronic data interchange (EDI) offers a viable solution to many logistics supply chain problems. Cutting-edge new solutions now also allow logistics companies and their partners to communicate efficiently across different protocols, formats, and locations.
This article will consider the benefits of EDI in logistics and how businesses can access these to obtain a competitive advantage. Let’s get started.
Suggested reading: If you’d like to learn more about gaining a competitive advantage with the help of EDI, check out our free eBook — The Supply Chain Centred Business
#1: Increased customer satisfaction
Consumer demands change and evolve over time, and up to 70%2 now cite order tracking as a top consideration before purchase. As a result, EDI’s ability to provide real-time oversight of long-distance orders across global supply chains can significantly enhance customer satisfaction.
This can provide a much-needed edge for companies operating in an increasingly complex and competitive market. Furthermore, it can help secure initial purchases and, in the long term, build a loyal consumer base.
Furthermore, EDI’s capacity to automate crucial processes can also prove invaluable for companies operating at capacity. By implementing EDI, logistics companies can see a reduction in the number of consumers seeking customer service solutions, which alleviates the burden on an already overloaded workforce in many instances.
#2: Less manual work
EDI solutions that centre around automated processes also reduce workloads by eliminating the need for manual work and paper documentation, both of which can be problematic in the modern-day logistics industry.
This can accelerate supply chain procedures by as much as 60%³ and help to address common logistics setbacks, like delivery delays, fragmented communications, and escalating costs on non-negotiable elements like transportation.
As well as allowing increasingly overwhelmed team members to focus on higher-value activities, such as acquisition and retention, EDI implementation can provide a wide range of operational benefits in global supply chains. These include:
- Faster deliveries
- Smoother trading partnerships
- 24/7 order processing
- Comprehensive support
- Lower labour costs
#3: Reduction in errors
By replacing paper-based processes that are continually exposed to human error, the use of EDI across global trade partnerships can significantly accelerate the accuracy and efficiency of data and information transfers.
Implementing EDI in logistics supply chains helps to eliminate costly manual errors like miskeying or mistyping information in systems. This can contribute to a significant reduction in processing errors that have previously proved fatal to trading partnerships.
The automated nature of EDI in modern solutions also means that unusual purchase orders, such as an abnormal order quantity, result in warnings that require manual checking before sign off. This helps to guarantee that orders are prepared for timely deliveries, ensuring smooth supplier relationship management moving forward.
#4: Cutting costs
As the industry deals with challenges like inflation, shifts towards sustainability and new governance and regulations, logistics businesses are increasingly looking for ways to reduce their overhead costs and better utilise resources. EDI can help with both of these.
Implementing an efficient EDI system facilitates the automation of transferring crucial business documents. By removing human intervention from these processes, which often come with expensive logistics processes like printing, storage and postage, EDI significantly reduces the cost of each supply chain transaction.
The ability to speed up and optimise processes using EDI data transfers is also significant, removing the risk of the most expensive logistical mistakes, like lost or incorrect orders. Instead, EDI facilitates smoother processes that operate on basic inputs, enabling the reallocation of crucial expertise to high-value processes, such as production and assembly processing, that would otherwise be required for basic functions.
#5: Improved stock management
By providing real-time updates regarding both outstanding inventory and upcoming market trends, EDI can lead to improved stock management despite ever-changing markets and requirements. Just a few benefits felt through the faster decision making, and enhanced responsiveness of EDI’s stock visibility include:
- Reduced lead times
- Efficient order processing
- Improved supplier relationships
- Cost savings
This change is crucial, considering that maintaining optimal stock levels is one of the largest hurdles currently facing logistics managers. Furthermore, EDI can also significantly reduce expensive and ineffective large inventories.
Automated inventory management that accounts for consumer demand can also help boost company reputations, ensuring that order-fulfilling inventories are always on-hand and that stock management is implemented with future fluctuations or decreases in mind.
#6: Significant return on investment (ROI)
EDI facilitates significant return on investment (ROI) across logistics processing by making it easier to meet trading partner and consumer demands. The opportunity to build far more effective and mutually lucrative supplier relationships is particularly valuable from an earnings standpoint, with simplified onboarding processes possible with modern EDI solutions helping to ensure faster returns.
A reduction of manual errors also makes it possible to finally get a handle on costly mistakes. Reallocating resources off the back of this benefit then enables increased investment into the highest-value, growing areas of the sector, such as global trade and omnichannel fulfilment.
This forward-thinking focus ensures that companies remain at the forefront of the industry and that they’re never again at risk of losing money from outdated business processes that simply don’t serve the reality of logistics at any given moment. All of which come together to make EDI an increasingly wise investment.
Get the best results with modern EDI solutions
EDI’s usefulness across often convoluted logistics processes is undeniable. Automation and a reduction in avoidable errors can transform supplier relationships at a time when it’s never been more important to do so.
That said, legacy EDI systems have long been plagued by setbacks, including convoluted onboarding and high costs. As a result, the opportunity to enjoy any of these benefits relies on the ability to modernise and adapt using EDI systems that operate outside of these limitations.
Here at Data Interchange, we’ve developed our EDI-as-a-Service offering for precisely this purpose, modernising EDI and ensuring that implementation within a logistics setting is flexible and accommodating. By combining self-service and managed EDI integrations, EDI-as-a-Service provides numerous benefits, including:
- Simplified onboarding: The simplified integration of a wide range of EDI standards and protocols makes it easier to onboard even unversed business partners, ensuring better relationships and increased supply chain efficiency from day one.
- Enhanced visibility: A holistic oversight of entire supply chains and single-source access to all supply documents significantly enhances processes like forecasting, risk assessment, and decision-making.
- Always adaptable solutions: Managed oversight and the ongoing handling of EDI that grows as your relationships do also ensure the adaptability that’s too often lacking from legacy solutions, ensuring data transfers that respond to changes as they’re happening to avoid supply delays, inaccurate stocking, and more.
The logistics industry is in flux, and modern problems like convoluted supply chains and generally altering operations require modern solutions built with these setbacks in mind. Get in touch today to find out precisely how EDI-as-a-service can ensure that your logistics processes never get left behind.
¹ The Logistics Report Summary 2021
2 “Where’s my package?” Why answering this question is the key to building customer trust