How to Improve your Supply Chain Strategy

2023 is an important year, and for many businesses, supply chain management will be the key to success. An effective auto supply chain strategy sits at the heart of your plan to:

  • Grow a business, both in the short- and long-term
  • Differentiate from the competition
  • Achieve optimal performance
  • Create & maintain a sustainable competitive edge

The companies that responded with flexibility to the health crisis of 2020 were the same ones that bounced back quickly, and supply chain management is central to any organisation’s ability to adapt at speed. So what’s the most straightforward way to improve such a complex part of your business? Simple: Electronic Data Interchange (EDI).

EDI is the lifeblood of supply chain management. For businesses without EDI, effective EDI adoption will provide a significant boost to supply chain effectiveness. For businesses with established EDI systems, taking stock of that infrastructure and looking to update processes and technology can deliver an equally large benefit.

Significant advancements in EDI have been made recently. Today’s forward-looking approach to EDI is modern, flexible, and best delivered as EDI-as-a-Service (a hybrid approach combining self-service tools and managed services). This not only simplifies getting started, but improves outcomes, streamlines maintenance, and increases adoption rates within your supply chain.

Here, we are going to look at how effective application of EDI can transform supply chain strategies and help you build a more sustainable future. But first, we need to look at the basics of supply chain management and the outcomes you should be looking to achieve.

Ready to learn more? Let’s get started.

Additional reading: For more details about how orientating your business around supply chain management can deliver a competitive advantage, check out our free ebook — The Supply Chain Centred Business.

Supply chain strategies: responsiveness vs efficiency

At its simplest, supply chain management (SCM) is the management of the flow of goods and services across a supply chain. The focus here is on developing supply chains that are as efficient and cost-effective as possible. Of course, managing your supply chain also includes streamlining your business’s supply-side activities to maximise customer value and gain a competitive edge. By managing the supply chain and maintaining tighter control over inventories, production and services, and distribution and sales, companies can cut excess costs and deliver goods more quickly.

What role does strategy play in this? It depends. Ultimately, a supply chain is shaped by the marketplace, a company’s competitive positioning, its internal supply chain processes and its managerial focus, which links supply chain processes with the larger business strategy.

Broadly speaking, there are two main categories of supply chains and, thus two broad strategic approaches:

  • Efficiency-oriented supply chains: Driving efficiency requires strategies where the value proposal is oriented toward low cost or high relevance of asset utilisation to total costs. Example industries include fast fashion, steel and commodities.
  • Responsiveness-oriented chains: Enabling responsiveness requires strategies that leave space for considerable demand uncertainty — often due to customisation requirements — and therefore provide the capacity to respond to fluctuating demand. Example industries include electronics, automotive, packaging and services.

The ultimate goal is to combine both of these outcomes within a single supply chain strategy — building a solution that is both flexibly responsive and optimised for efficiency. Supply chain visibility is the main tool at your disposal for enabling responsiveness. EDI is central to both visibility and efficiency, empowering businesses to manage their supply chain strategy in line with future demands.

Improving supply chain visibility

For most businesses, improving your supply chain visibility is one of the best things you can do to optimise your strategy. Achieving total visibility allows you to gain a holistic view of every component of your supply chain, from raw materials and goods in production to demand signals and relevant customer data.

For businesses using a responsiveness-oriented strategy — especially those delivering customised, on-demand products — visibility is essential, as it can improve sales and operational planning processes, help with better production and inventory management, and offer a clearer picture of all associated costs. And for efficiency-oriented businesses, visibility improves forecast accuracy, which helps guarantee product availability and ensure order fulfilment.

However, it’s important to note that visibility doesn’t carry much weight on its own — it requires technology and a human touch to bring its potential to life. In short, visibility empowers you, as a business, to act — to plan, communicate, and make sharper and more informed decisions.

Ultimately, deriving the most value from your supply chain’s visibility means harnessing it as a way to gather the real-time data you need, which helps you generate valuable insights about what comes next for your business. Emerging technology, such as machine learning, can help here.

With the data that visibility brings, you can:

  • Make predictions and identify any possible disruptions
  • Gain a sense of possible demand surges
  • Improve your supply chain’s overall sustainability and compliance
  • Ensure ethical product sourcing
  • Streamline cross-border transaction processes

In turn, this will empower you to improve your agility and responsiveness, minimise risk and meet customer demands.

How modern EDI changes best practices

EDI delivers visibility by facilitating back-and-forth flows of information throughout the supply chain.
Your information is digital, and (with a modern EDI solution) accessible from a single portal. The critical advancement made by modern EDI tools is two-fold:

  1. Simplifying adoption by trading partners: In order to achieve full visibility, you need a 100% adoption rate within your supply chain. Web EDI solutions, in particular, facilitate increased adoption, as they don’t require any special EDI skills or investments — only a simple web browser.
  2. Streamlined reporting: Every element of your EDI system needs to be integrated in order to centralise access to supply chain information. You then need analysis tools to sift through that data. To accommodate complex and global supply chains, this potentially means combining multiple types of EDI within a single solution. Managed services and cloud-based tools with customised dashboards deliver the holistic reporting your need, within a system that is as efficient as it is effective.

When information flows smoothly, companies can see the bigger picture and perform sharper strategic/tactical business planning based on supply chain specifics. With the visibility EDI delivers, you can fine-tune your strategy, and take advantage of the boosted control and communication to execute that strategy more effectively. Today’s EDI tools also make it easier than ever for all of your trading partners to hop on board and contribute to more visibility.

Achieving process optimisation & efficient transfers of information

For a strategic supply chain to live up to its maximum potential, processes must be optimised, and transfers of information must be made more efficient. This means using automation wherever possible. Doing so frees up your team to focus on the value-added activities that put the customer first — and ultimately, centring your business around the supply chain means centring your business around your customers.

Automating processes and information transfers requires an accurate picture of actual demand, which comes back to visibility. To get precise demand data, you’ll need to capture demand signals from multiple sources — think orders and IoT sensor data, as well as emails, sentiment analysis, predictive algorithms and social media. Together, these pieces of information form a picture of demand, yielding further insights that can help you improve your business performance and customer service.

Looking for a supply chain strategy fit for a post-pandemic world? Our team can help.

Depending upon your specific industry and strategy, how you begin to approach process optimisation might differ. For instance:

  • For responsiveness-oriented businesses, particularly those dealing with customised products, it’s vital to focus on optimising order-entry processes to gain a straightforward and error-free understanding of customer requirements.
  • For stable, mature businesses operating with a continuous flow supply chain strategy, it’s crucial to focus on streamlining transfers of information, including electronic transactions to reduce the overall number of transactional processes; the sharing of sales data; and the free flow of inventory information to improve demand predictions.

How modern EDI changes best practices

EDI enables you to automate many supply chain processes. Creating efficiency by simplifying the flow of information is the central reason EDI exists in the first place. When calibrated correctly, automation drives efficiencies and creates more effective solutions with less risk of error.

However, efficiency through EDI is only possible if your EDI system is able to work as a whole. If different supply chain partners sit within information silos, not only is visibility damaged, but it becomes likely that ad hoc and manual processes will develop to share that information. Again, this comes back to achieving a high EDI adoption rate among your supply chain partners. However, you also need to accommodate different EDI standards (e.g. EDIFACT, ASC X12 and PEPPOL) and protocols (e.g. FTP, SFTP, HTTP, OFTP and AS2) used across your supply chain.

Underestimating complexity is one of the most common EDI implementation issues. Modern EDI minimises the challenges of getting started, and improves efficiency for many of the same reasons it improves visibility. You get increased adoption rates, a simpler system that unites all elements of your EDI network within a single interface, and more automation. You don’t need to worry about different standards and protocols, and simply get a system that works.

Fine-tuning two-way communication

Your supply chain matters — now is the perfect time to take your strategy to the next level. Fortunately, all of the main areas for improvement we’ve covered — visibility, process optimisation and communication — are made easy by modern EDI.

If you’re seeking to revolutionise your supply chain management this year, you’ll need EDI solutions that are as flexible and diverse as your supply chain itself. You need an EDI solution that is able to facilitate two-communication across your entire supply chain, enabling better planning, increased efficiency and improved supplier/customer relationships. Remember, EDI is about creating a flow of information that enables you and your supply chain partners to better collaborate and improve outcomes for your business and your customers.

At Data Interchange, we offer self-service toolsmanaged services and a combination of both within bespoke EDI-as-a-Service options. Our goal remains simple: to simplify EDI adoption and management, allowing you to focus on what really matters — harnessing the power of EDI to improve your supply chain relationships and drive commercial success.

Ready to improve your supply chain strategy this year? Get in touch!

Talk to us

Transform your approach to supply chain management

Talk to an Expert








    Epicor values your privacy. Website terms and conditions.

    RELATED ARTICLES

    EDI vs API: What’s the Best Method for B2B Integrations?

    EDI 214 T-Set: Structure, Benefits & Use Cases

    The ANSI X12 EDI 862 T-Set: Structure, Benefits & Use Cases

    The ANSI X12 856 T-Set: Structure, Benefits & Use Cases

    ANSI X12 EDI 846 T-Set: Structure, Benefits & Use Cases

    855 T-Set: Structure, Benefits & Use Cases

    Making the Move to Cloud-Based EDI Solutions

    EDI 940 T-Set: Structure, Benefits & Use Cases

    ANSI X12 EDI 865 T-Set: Structure, Benefits & Use Cases

    The VDA 4987 Message: Structure, Benefits & Use Cases

    Top EDI Solution Providers in 2024

    ANSI X12 EDI 850 T-Set: Structure, Benefits & Use Cases

    The VDA 4938 Message: Structure, Benefits & Use Cases

    The EDIFACT DELJIT T-Set: Structure, Benefits & Use Cases

    The EDIFACT DELFOR T-Set: Structure, Benefits & Use Cases

    The VDA 4915 Message Explained

    The VDA 4905 Message Explained

    T-Sets | ANSI X12 810

    How to optimise your EDI and ERP system integration

    T-Sets | ANSI X12 997

    T-Set | EDIFACT INVOIC

    T-Set | EDIFACT DESADV

    Exploring Cloud EDI Services in ERP: Architecture, Security, and Scalability

    VDA Explained: Message Standards and Transaction Sets

    ANSI X12 Explained: Message Standards and Transaction Sets

    EDIFACT Explained: Message Standards and Transaction Sets

    The Power of Web EDI for Global Supply Chains

    How to Get the Most Out of AS2

    How EDI Simplifies Transactions in the Manufacturing Sector

    Why Your Automotive Supply Chain Needs an OFTP2 Connection

    Digital Supply Chain Trends Impacting 2023 and Beyond

    How to Manage Global Supply Chain Complexities

    How to Overcome Supply Chain Risk

    What is the Future of Supply Chain Management in 2023?

    Why Scalable EDI is Integral to Rapid Business Growth

    How to Pick the Right EDI File Transfer Protocol

    An Introduction to OFTP2 (Odette File Transfer Protocol)

    What are the Costs of EDI Implementation?

    What is PEPPOL?

    A Guide to EDI Protocols

    EDI VAN Costs: Get the Right Solution for your Business

    How Much Does EDI Cost?

    How Do On-Premise EDI Solutions Work?

    Our Plan at Data Interchange to Change EDI and Supply Chain Management

    Integrating EDI with your ERP

    In-house vs Managed Service EDI

    What is an API Integration? And how does it affect EDI?

    Epicor Acquires EDI Provider Data Interchange

    6 Benefits of EDI in the Logistics Industry

    4 Challenges Facing the Logistics Industry and How to Overcome Them

    Solving Supply Chain Problems in the Logistics Industry

    B2B EDI Integration Best Practices in 2023

    How to Choose The Right EDI Provider in 2022

    Supply Chain Analytics Trends in 2022

    Future-proof your business: Take Advantage of Market Growth

    Announcement: Andrew Filby becomes CEO of Data Interchange

    7 Advantages of EDI in The Automotive Industry

    Consumer Expectations cause Demand for Integrated Data

    How to Optimise Your Automotive Supply Chain Processes

    Post-Pandemic Supply Chain Challenges Increase the Pressure

    EDI Made Simple for the Automotive Industry

    Overcoming Supply Chain Visibility Issues in the Automotive Industry

    Complex Supply Chain Problems and Simple Solutions

    Supply Chain Flexibility: Why your customers need it

    5 Automotive Supply Chain Challenges Facing the Industry

    Supplier Performance Management Reimagined in 2023

    How to Unite Emerging Supply Chain Management Technology Trends

    Meet the Team: Marketing

    Supplier Management Best Practices after COVID-19

    The Future of EDI: Looking Beyond 2025

    The top three supply chain data exchange requirements

    The Advantages of EDI in E-Commerce: How to Gain a Competitive Advantage Online in 2021

    A Crash Course on EDI Industry Standards: ANSI x12 vs EDIFACT vs OFTP and more

    What is EDI Mapping?

    What is EDI: The History and Future of Electronic Data Interchange

    The Future of the Automotive Supply Chain

    Supplier Relationship Management: How to reduce risk and improve performance

    How EDI-as-a-Service Changes Supply Chain Best Practices in 2021

    Agile Supplier Onboarding: Supply Chain Security in Uncertain Times

    The impact of failed EDI on Supply Chain

    Cloud-Based EDI Solutions vs On-Premise

    Different Types of EDI Compared

    5 Most Common EDI Implementation Issues and How to Solve Them

    Are your EDI documents ready for the new EU/UK customs border?

    B2B Integration Challenges

    EDI vs API: Bridge the B2B connectivity gap

    Ten things to look for in an EDI Managed Service Provider

    World Mental Health Day 2020

    Logicalis & Data Interchange – partnering for success

    EDI – A data integration service critical to business success

    Joining forces with SnapLogic: bringing together market leading iPaaS and EDI solutions

    Joining Data Interchange: My lockdown experience

    Data Interchange announces strategic partnership with SmarterPay

    Access new trading partners quickly for COVID-19 support

    Keeping supply chains moving

    Our Web EDI solution gets a makeover

    Coronavirus: Our Business Continuity Plan

    With love from Data Interchange ♥

    A new decade, renewed ambition and the next generation

    Brexit and EDI

    Data Interchange transform their Support service for an improved customer experience

    Interview: An update on Data Interchange’s new CEO, Robert Steiner

    Data Interchange appoints Robert Steiner as new CEO

    MQ messages over ENX – Renault

    Five key questions for your EDI provider

    Data Interchange at the Odette Conference 2018

    How to select the right EDI provider

    Future proof your EDI and unleash growth

    EDI: the Supply chain performance enhancer

    Taking cost out of the chain

    Non-EDI users held up in the mail

    Over 41% of companies at risk without EDI

    ​Consolidating VAN providers

    Increase visibility and productivity of supply chain logistics with Data Interchange’s B2B integration solutions

    Data Interchange wins large business of the year award

    Data Interchange launch new Support Portal

    Data Interchange will be showcasing our EDI solution offerings and promoting the benefits of MMOG/LE

    Metaldyne receive special recognition from Ford for 11th consecutive year

    Top 5 reasons to switch to EDI Managed Services

    Data Interchange to power QAD Managed EDI On Demand