Electronic data interchange (EDI) leverages specialized software to reconfigure business documents in a standard electronic format. This allows supply chain and logistics companies to share and gather data from documents (e.g. purchase orders, invoices, customs forms, bills of lading) regardless of their original format.
EDI reduces the need for manually re-keying data, speeding up fulfillment and streamlining back-office processes. However, like any technology, it comes with its own set of unique challenges. Here, we’ll discuss three common types of EDI challenges and provide some insight into how to solve them.
Setup and implementation challenges
Especially for companies with no prior experience, EDI setup can be a daunting task. It requires not just technical knowledge and skill, but time and resources, which can take focus away from other business processes. In addition to deciding on any special features, you’ll need to determine whether your EDI system will require integrations with your existing tech stack and/or your clients’ systems — and how to build those integrations.
To address these challenges, many companies opt to hire an in-house EDI specialist. However, depending on where your business is located, this can be challenging due to the ongoing tech skills shortage. Where there’s high competition for qualified candidates, smaller companies can easily be priced out by larger companies with bigger budgets for recruiting, salaries, and benefits.
One alternative option is to work with a supply chain technology partner to develop and implement a custom EDI system that will work with your needs. If applicable to your business, you can also partner with a 3PL that utilizes a solid existing EDI system for services like warehousing and distribution.
Data quality challenges
Even if you have an effective EDI system, poor data quality can lead to errors and impact your ability to make informed decisions.
Poor data quality can be caused by human error, inconsistent processes, integration errors, lack of compliance with regulations, and more. For example, if there is a flaw in one of your integrations between your EDI and another platform, your data might end up missing, duplicated, incomplete, or categorized incorrectly.
When it comes to the supply chain, even a small error can lead to major issues (e.g. quantity discrepancies, customs non-compliance, delivery to the incorrect place), so it’s vital to keep your data in good shape. To do so, follow these best practices for EDI data management:
- Ensure your EDI standards/formats are aligned with your clients’ to reduce the risk of data getting lost in translation.
- Test integrations frequently to assess interoperability and data quality across platforms.
- Establish clear QA/verification processes to catch errors, and perform regular training on those processes.
If you’re experiencing data quality issues, consider working with a trusted supply chain technology provider that has data quality measures in place.
Ongoing maintenance challenges
An EDI system isn’t “set it and forget it” technology. Over time, you’ll need to make adjustments in order to:
- Comply with new regulations
- Troubleshoot and fix bugs as they arise
- Build new integrations as your tech stack changes
- Meet the needs of new clients
- Adapt to the changing needs of existing clients
Proactively managing these tasks can take resources away from other areas of your business. But if you leave maintenance on the back burner and take a reactive approach, you’re likely to end up with data quality issues that require even more resources to fix.
As with implementation, one option is to hire someone in-house to manage your ongoing EDI maintenance — but attracting qualified candidates can be difficult in such a tight market. Working with a supply chain technology partner or technology-focused 3PL is a strategic way to keep your systems running smoothly without going through the high-effort process of recruiting and hiring.
EDI systems are a powerful tool in the supply chain industry, but they require skill and effort to implement and manage. Working with a technology partner can help you solve EDI challenges related to setup and implementation, data quality, and ongoing maintenance.
Looking for a 3PL partner who utilizes EDI software for services like drayage, transloading, warehousing, distribution, and more? Need a custom-built EDI network? The experts at GlobeCon can help.
Let’s discuss your EDI needs. Contact us.