Benefits Of EDI

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Benefits Of EDI

EDI is the abbreviation of Electronic Data Interchange and facilitates the inter computer exchange of documents between different businesses or companies. As the data is digitally exchanged through computers most of the allied business processes are easily automated. Thus these processes run with little or absolutely no human requirement for data entry. EDI helps companies to automatically exchange business documents such as invoices and purchase orders.

1.Removes re-keying of documents.
EDI helps to remove manual keying of main business documents like Invoices, Orders, Acknowledgments and Dispatch Notes. As a result the company gets immensely benefitted by it in terms of reduced labor costs, exclusion of human keying errors, quick document processing, instantaneous document retrieval and no reliance on postal services.

2.Eliminates the use of paper.
Electronic Data Interchange helps to eliminate the use of paper in trading relationships. This results in numerous advantages for the companies using EDI. These are printer and stationery consumable costs, costs incurred in storing documents, reduce the chances of losing documents and postage costs.

3.Helps to reduce lead times
The delivery of Electronic trading documents is quite quick as compared to their paper counterparts. This reduces the turnaround time beginning from the order till the time delivery is made. Use of EDI helps the companies in forecasting and planning of likely orders. This helps them to plan their stock levels accordingly. Through EDI companies receive Advanced Shipping Notes, which help them to know in advance the things that are being delivered to them. They can try to source supplies from alternate sources. Reduction in lead times results in faster payments to their suppliers, keeping them satisfied.

4.Improves the trading relationship
Printing and reading of Electronic trading documents, is quite easy as compared to faxed copies or those made by impact printers. The accurate documents produced ensure accurate supplies. As batches of these documents are y sequentially numbered and there are less chances of missing these documents.

5.Provides competitive edge
Companies using EDI appear quite attractive, reasonable, cost effective and efficient with respect to the thoughts of the customers. They thus prefer to deal with such companies rather than those trading on paper. The costs of trading are much less because less manpower is required to process orders, make deliveries or payments.

6.Enhanced productivity.
Use of EDI by companies helps to enhance their productivity without making any investment for increasing the staff and employees.

With so many advantages most companies nowadays prefer EDI in comparison to other traditional methods.

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