The use of EDI in the logistics sector plays an important role in global supply chain management. For this reason, many countries and businesses are increasing their efficiency and gaining significant competitive advantages by using EDI technology. We have summarized the role of EDI in the logistics industry and the advantages it offers.
EDI in the Global Logistics Industry
EDI (Electronic Data Interchange) technology is a widely used technology in the logistics industry, enabling faster, more accurate and less costly transactions by moving the data exchange between businesses from paper-based processes to digital processes.
EDI is widely used worldwide, especially in Europe, where around 90% of logistics companies are managed in a systematic and organized manner thanks to this technological infrastructure. Likewise, in the logistics industry in America and in various economic giants of the world, the use of EDI is widespread and a key technology to increase the automation of activities and reduce costs. In Asia, especially in China, the use of EDI in the logistics industry is also growing rapidly. Many countries around the world are encouraging the use of EDI. For example, the European Union has set many regulations and standards to support and encourage the use of EDI. Similarly, regulations have been introduced in the US to encourage the use of EDI.
Use of EDI in Supply Chain Management and Logistics Operations
The logistics sectors with the highest use of EDI include transportation, warehousing, distribution and supply chain management. In these areas, the vast majority of logistics companies use EDI as the digital infrastructure of their daily operations, as a kind of igniting force. The most important benefit of the widespread use of EDI in logistics is the demand for cheap, smooth and fast transportation. The infrastructure, systemization and automation required for the healthy execution of these demands in data stacks are provided by EDI. The implementation of EDI in the logistics sector means that businesses digitize data exchange in supply chain management and achieve a more efficient operation.
In order to create an EDI-compliant software and an EDI infrastructure specific to the needs of the company, support from experienced experts of the EDI provider company is important. Logistics businesses digitize their operations by choosing EDI-compliant software. This software allows businesses to exchange data with different supply chain stakeholders (suppliers, customers, carriers, etc.). The data format is determined by consultants. For EDI use, a data format is determined based on company needs. Specified data formats for EDI allow businesses to exchange data with different supply chain stakeholders in a standardized way. This makes data exchange between supply chain stakeholders faster and more accurate. Consultants introduce the system to company representatives and provide easy implementation solutions, as well as consulting services if needed. Thus, the logistics company can create EDI messages prepared with the support of EDI provider consultants between the supply chain stakeholders of the enterprises through EDI compatible software. These messages allow businesses to perform data exchange transactions such as orders, invoices, shipments, inventory tracking, etc. in digital environment. Thus, thanks to EDI-compliant software, data exchange between the supply chain stakeholders of enterprises is carried out systematically. The EDI Process is a digital process that makes a manufacturer, supplier or vendor’s communication with its own logistics team or a third-party logistics provider efficient and effective.
The digital document created using data from the logistics provider’s ERP system is transmitted to the ERP system by the EDI solution of the supplier or retailer, and the data exchange is transmitted many times faster than in a manual environment. Thus, logistics operation processes can be managed much faster and more efficiently.
Advantages of EDI Applications in the Logistics Industry
Thanks to EDI infrastructure in various areas such as order or shipment tracking; warehousing and inventory management; and management of transportation and logistics processes, companies can exchange data digitally. With EDI, transactions are carried out faster and more accurately and paper-based processes are eliminated. EDI is preferred as a modern and effective solution, especially in the logistics industry, as it is faster, more reliable and much less costly than manual data entry methods involving human labour. Because EDI saves costs and improves data accuracy, small businesses are also using this technology to make their operations more efficient and reduce costs. For this reason, the use of EDI is increasing every year.