Optimizing EDI for the Modern Retail Landscape

EDI, or Electronic Data Interchange, is a standardized way to share business documents and data between organizations. It enables companies to transfer information such as purchase orders, invoices, and shipping notices digitally. For suppliers expanding to selling into large retail chains to both warehouse and eCommerce channels, being EDI compliant becomes essential. Industries like retail, manufacturing, and logistics widely use EDI to improve efficiency and reduce operational costs.

The Benefits of EDI for Expanding Businesses

As your company transitions to becoming EDI compliant, the benefits of EDI become evident:

• Faster Transactions: EDI speeds up the exchange of business documents, allowing for quicker order processing and payments, which is crucial for meeting the demands of physical retail.
• Streamlined Processes: EDI standardizes transaction formats, reducing errors and ensuring smoother communication between systems.
• Enhanced Relationships: Accurate and timely transactions can strengthen partnerships with new retail partners, building trust as you expand your market presence.
  
  

Why Traditional EDI Can Be a Challenge for Vendors/Sellers

If your company is looking to expand to sell to large retailers, you may need to adopt a new system of order management. Traditional EDI (Electronic Data Interchange) involves transferring data between business partners, typically between suppliers and retailers. While this system aims to streamline processes by automating the exchange of documents like purchase orders and invoices, it often becomes a complex and cumbersome task for vendors transitioning to physical retail.

How It Actually Works & Why It’s a Problem

EDI operates on a set of standards that dictate how data should be formatted and transmitted. However, these standards vary across retailers, meaning each new EDI partner might require significant adjustments or even a complete overhaul of existing systems. Traditional EDI systems are typically rigid and difficult to customize, making it challenging to adapt to the unique needs of different trading partners. Moreover, the implementation and ongoing management of EDI can be resource-intensive, requiring specialized software and technical expertise, which can be daunting for small to medium-sized businesses.

Traditional EDI is Expensive for Wholesalers

Traditional EDI can be costly, with monthly fees for basic dashboards and functionality. The expense grows with the volume of transactions, as each EDI order may require multiple documents, each incurring a cost. Additionally, managing multiple EDI sales channels means paying fees for each EDI provider, increasing the financial burden.

Traditional EDI is Labor Intensive Despite its automated nature, traditional EDI still requires significant manual effort. Wholesale business employees often need to log into EDI portals, download orders, manually enter them into the ERP system, and update logistics software separately. As your EDI partnerships grow, so do your labor costs, as more time is spent on these repetitive tasks.

EDI Codes Your Employees Must Manually Update

For each step in the EDI process, these are the typical document sets that need to be manually updated by your employees:

• 850 – Purchase Order
• 855 – Purchase Order Acknowledgement
• 856 – Advance Shipping Notice
• 810 – Invoice
• 997 – Functional Acknowledgement
• 846 – Inventory Feed
  
  

How Wholesalers Can Modernize EDI to Work for Them

The most effective way to handle EDI is by implementing an Order Management System (OMS) that translates orders from any of your partners directly into your ordering systems such as an ERP or accounting system, inventory WMS system, or logistics system. This reduces the time and effort needed to update clients while maximizing your employees’ efficiency. By tying this translation system to an order automation platform, you can receive orders, prepare them for shipping, update clients continuously, and invoice them—all without logging into multiple portals.

Taking a modern approach to EDI streamlines the entire order management process, eliminating manual labor and automating communication with customers at every step.

The Benefits of a Modern Approach to EDI Orders

Reduced Manual Input: With an OMS, you can automate your order management process while allowing your sales team to oversee orders and add value for your customers.

Simplified Communication: By directly pushing and pulling data from customers, you ensure they’re informed at every step, reducing the risk of fines from missed updates.

OrderEase: Your Path to Modern EDI Solutions

OrderEase functions as middleware between your sales channels and your business systems, making wholesalers like you fully EDI compliant and providing a central location to manage orders. We help manage large volumes of orders by automating the process from end to end.

OrderEase simplifies how wholesalers interact with large retail partners, handling EDI transactions without the typical challenges of manual intervention.

It’s Time to Move Away from Traditional EDI

The benefits of transitioning from traditional EDI to a modern, automated approach cannot be overstated. From reducing labor involved in processing orders to simplifying interactions with retail partners, modernizing EDI can save your company time, effort, and money. Whether you're new to working with large retail partners or looking to scale your existing relationships, OrderEase can help streamline your order management process.

For more information on how you can modernize your EDI orders, reach out to us today for a discovery call.