WHAT ARE SOME ADVANTAGES OF API/EDI COMMUNICATIONS IN SUPPLY CHAIN?

Communication, or information exchanges, is vital for any business. This is not limited to human interaction. API, application programming interface and EDI, electronic data interchange, are a way for businesses to exchange information, which was traditionally done by paper documents.

It may come as a surprise to many that EDI was first developed by the US transportation industry for standardizing electronic transfer between customers and vendors as early as the 1960s, according to an article published by True Commerce. Today EDI and API communications, that specify how software components interact, are being embraced by an increasingly large number of industries and companies, especially with the rise in online transactions. In fact, as many as 59% businesses had EDI capabilities in 2017, according to an article by Data Interchange.

API/EDI solutions have proved to be particularly beneficial in enhancing strategic alliances throughout the supply chain. Here’s how this technology has helped transform supply chain management.

AUTOMATION

Internal management processes, such as sending, generating and recording electronic transactions, can be automated with the help of API/EDI solutions. It also enables the automation of interactions with ERP systems, which in turn helps in processing dispatch notices, invoices and orders, without any human interaction.

BETTER INVENTORY MANAGEMENT

Real time updates provided by API/EDIs help companies maintain optimal levels of inventory. Before the advent of EDI, business owners had to make approximations about the expected sales and manage restocking accordingly. With API/EDI solutions and their advancements, companies can effectively prevent both the evils of shortages and overstocking of inventory.

Using API/EDIs, the traceability of a product can also be improved. The location of an item can be monitored by the system at all times.

COST SAVINGS

Paper driven processes are time consuming, add to costs and bring inefficiencies into the process. Expenses associated with printing, paper, reproduction, postage, document retrieval and filing can be saved when a company uses to API/EDI solutions. This is also an ecofriendly option, as it saves paper.

GREATER ACCURACY

The risk of errors is much greater when hardcopies of documents are in use or data is handled by humans. Errors may occur due to a variety of reasons, such as lost faxes, illegible handwriting and re-keying errors. These errors can be eliminated using API/EDIs. With a reduction in paper-based document flow, transmission times of information can also be lowered.

REAL TIME VISIBILITY

With API/EDIs, there is real time visibility into the transaction status of various items. This helps in making quicker decisions and in adapting to changing customer expectations and the dynamic nature of the market. Businesses can adopt a demand-driven model and remain relevant for longer.

API/EDI solutions also enable businesses to shorten their lead times for new product delivery and enter new markets with greater confidence.