Just what is EDI? And why is it so important to today’s Public Warehouse Management Software? In short, EDI stands for Electronic Data Interchange. Functionally, EDI is the exchange of specificallyformattedinformationfromonecomputerto another without human intervention. Essentially, a sending computer transmits standardized and formatted information to a receiving computer. What is its value? Speed and accuracy.
In the global economy, EDI has become a critical necessity that 3PL’s need to remain competitive in recruiting and retaining customers. Because of the elimination of human involvement in the transmission of data, errors are rare with EDI systems. What’s more, the speed of informationthatis relayed between sending and receiving computers is rapid. One result is that all of this sophisticated automation boosts order fulfillment capabilities by communicating inbound shipment requests with outbound shipment details. For 3PL’s, this level of qualitative productivity is vital in today’s marketplace.
Besides logistics and fulfillment functions, EDI processes also include primary accounting functions like invoices, purchase orders and bills of lading. In the past, human beings processed these important functions on paper or even if using computers, human interaction was required in the form of data entry. WithEDI,both humans and data entry has been eliminated thereby nearly abolishing errors. What’s more, EDI collapses time with instantaneous transmission occurring.What’s required for electronic data transmissions in public warehouse management software? Very simple tools are needed for EDI to function effectively. They include:
- Computers – laptop, desktop or mainframe
- Communication hardware – a simple phone line and modem
- Communication software – programs written to send and receive your business data
- Translation software – sent data needs to be translated into ANSI X12 standard formats for transmitting, incoming and receipt of returned transmissions.
In addition, some companies like 3PL Central offer a Value Added Network, or VAN, plus an FTP server to facilitate data transmissions. Further, 3PL Central’s Warehouse Manager package provides a variety of connection methods that can include:
- Direct connection with your manufacturing customer
- Integration with your in-house 3PL system
- Integration with third party EDI service providers.
Common file protocols might use the following:
- X12 (940/945)
- Fixed position flat file
- Tab delimited
- XML (via FTP or Web Service Calls).
An additional benefit to any 3PL public warehouse management software program incorporating EDI is that security is heightened using this method of information transfer. Plus, order lead time is reduced, quicker cash flow occurs, faster product cycles result, bloated inventories can be better managed and error detection and correction is enhanced dramatically.
Given speed, security and overall accuracy that EDI provides, it is easy to see how it has become a necessity in operating an efficient warehouse operation in today’s logistics world.