EDI replaces order processes, transactions and basic communications that were once done with paper or fax— remember those? — with electronic transmission.
First, there are all kinds of EDI documents — some retailers will use a lot of them, others will rely on just a few. But the process typically begins when the buyer at the retailer creates a purchase order digitally with EDI — it’s a document called the 850 and the supplier gets it through our Lingo software if they’re working with us. The supplier sends back an acknowledgement that the order was received — a 997. After the order is shipped — there are a number of other EDI documents related to shipping — the supplier sends an invoice. In EDI, it’s the 810.
As you might guess, that’s a very simplified explanation of the process. The bottom line is that EDI speeds communication and ensures that the details both parties need are available.
It’s an essential component of modern commerce, allowing supply chains to function with speed and efficiency. Paper documents that were once shuttled back and forth for weeks can be exchanged in mere minutes, dramatically reducing the time between order and fulfillment. What’s more, cost-effective cloud-based solutions allow companies of all sizes to enjoy the benefits that EDI provides without making a major investment in costly hardware or additional personnel.