Benefits of EDI Usage in Transportation Management Systems

The need for real-time visibility has reached an all-time high for transportation companies. As Bart De Muynck, Research Vice President, Gartner, says, “Organizations have increasing demands for real-time, or at least near-real-time visibility into their orders, multi-modal shipments, and inventory across a network of business partners, both stationary and in transit.”

Providing T&L companies access to real-time information is Electronic Data Interchange, which is the inter-organizational exchange of business documents in a pre-defined structured format. EDI permits trading partners to generate, receive, and process data with little or no human intervention. With EDI, standard business documents can be transmitted instantaneously using telecommunication capabilities.

Benefits of EDI

  1. With EDI, routine high volume communications can be automated. This ensures that dispatchers and accounts receivables staff have time to focus on value added services. For example, expenses associated with usual operational tasks can be considerably reduced or even eliminated, lowering transactions costs by at least 30 percent. When this number is multiplied annually, the savings can be substantial.
    A study by La Londe and Cooper found that firms with electronic ordering have experienced sales increases of up to 50 percent. EDI enables firms to be more responsive to customer needs by decreasing order transmittal time and lead times.
  2. EDI eliminates dispatchers from having to manually key information into dispatch operational and billing systems. This results in savings while eliminating any costly data entry mistakes. Thus, errors due to illegible faxes, lost communication or incorrect phone messages are eliminated and documents processed much faster.
  3. For the transportation industry, business cycles are revved up sharply. Normal waiting time for documents which range from a day to a couple of weeks, can happen in the space of a few minutes.
  4. Companies can use EDI to integrate with various transportation management systems or direct carrier systems. This will help to tender and re-tender loads, transmit and receive appointment time and status.
  5. Eliminating paper transactions and substituting them with electronic alternatives, is a display of corporate social responsibility.
  6. However, one of the key benefits of EDI stem from the real-time visibility into transactions. This makes for faster decision-making and improved responsiveness to rapidly changing economic and market scenarios. The business model is altered completely from a demand-driven model to a supply-driven one.

Successfully Delivered 30+ Digital Transformation Projects in the Last 10 Years

To summarize, In the quest to achieve a paperless society, Electronic Data Interchange has long been a leading technology. It predates the emergence of Internet and now a chief electronic network connecting just about every business to every other. To know more about the benefits, read whitepaper ‘EDI in Transportation: The Standard that Continues to Automate and Integrate Operations

EDI vs. XML – Which is the preferred mode to Improve Enterprise Productivity

Having worked as a tech lead for more than 6 years in a project, involving automation of supply-chain complexities, I would like to share my tryst with EDI files. Enterprises have long relied on EDI (Electronic Data Exchange) for automating transactions and as a medium to improve productivity by automating intense manual processes and minimizing associated overheads.

With the emergence of XML, enterprises are increasingly contemplating the viability of XML as an alternative to EDI that offers many-to-many connectivity and its transactional capabilities. Before arriving at a conclusion as to which is the best medium, let us make the field even for both EDI and XML. General guidelines one should follow while contemplating EDI or XML platform or any other platforms for that matter are: ROI on Investment? Whether to leverage existing set up or start building a new one right from scratch? Performance criteria? Does it subscribe to pay as you go model? Security, reliability and scalability and Feature extendibility concerns ? End user adoption?… and so and so forth.

These guidelines can help us make an even comparison between XML and EDI and which of the two makes a compelling force to adopt.

EDI – A Protocol while XML is a Data Format

Let us begin. Though an oft-debated comparison, when it comes to communication between two systems, EDI and XML are two separate concepts. XML is a data format, not a protocol or an application, on the other hand, EDI is. Though both are used to parse documents without manual intervention, it is important to understand their importance in the respective contexts.

An EDI file or document transmission can take anyone route among Serial Communications, Internet, Peer-to-peer, Value Added Networks (VAN) and gets translated via FTP or AS2 protocol. What this means is EDI renders solid security due to its stringent protocol something, which makes XML less so. further, there are lots of tried, tested, and proven off the shelves EDI tools in the market that eases the hassles of developing an application right from scratch which is most likely the case with XML.

On the flip-side, XML is gaining ground due to the proliferation of e-commerce sites and portals, which requires many-to-one transactional capabilities. XML makes more sense for small and mid-size companies that do not have to follow a standard format and whose transactional needs are less intense. On the other hand, as EDI is best suited for one-to-one, point-to-point connectivity, it is a viable option for two big companies with millions of transactions happening per day between them, through a standardized protocol. Since the volume of data managed will be high; investing in value-added networks (VAN) is worth the buck spent.

Finding EDI experts

It can be downright frustrating if you have to build an EDI set up at ground level if you do not have the expertise and business domain knowledge. Unlike, XML, which is in a way human readable, EDI is complex and is meant for two systems to communicate. I can tell from my experience in a project spanning 6 years, EDI programming can appear complex and daunting to a novice and can result in companies spending millions and getting nowhere. In addition, there are several industry levels of EDI standards that need to adhere that requires a lot of expertise. As an experienced EDI programmer, I have to pay extra attention to the tiniest details while developing translation maps between two systems. in the next blog post, I will share some real-life examples of complexities involved in EDI processing.

Here’s how EDI usage propels Transportation Management Systems.


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