Modernize Your EDI System for Faster, Flexible Integration and Scale

The challenges posed by the pandemic are urging businesses to be agile and responsive. Both consumers and companies have undergone a significant evolution since the onset of the pandemic. The focus is now on digital transformation and its role in building resilience during anticipated or unforeseen events. The responsibility on the technologies and architecture that connect retailers, distributors, suppliers, manufacturers, and customers is enormous.

To deal with the disruptions caused due to the pandemic, organizations are now dependent on a highly available and scalable Electronic Data Interchange (EDI) more than ever before. Those who have already implemented it are looking for ways to optimize it and improve their supply chain operations and ensure stability and visibility. Not surprisingly then, the global EDI market1 valued at $2.46 bn in 2019 is now predicted to touch $49.21 bn by 2027 at a CAGR of 9.5% during the forecast period 2020-2027.

EDI enables organizations to move their paper-based documents such as purchase orders, invoices, and documents related to payments, inventory, shipping status, and other business-critical processes to a standard electronic format. It replaces traditional business communication with automated capabilities that allow organizations to share data in real-time. It is a boon for modern organizations in an ecosystem where goods and services are constantly exchanged as part of their supply chains.

Why modernize your EDI system?

Although EDI has been around for years as a dominant protocol in the world of B2B, the systems that enable the exchange of EDI documents have now moved to the cloud. The modern EDI setup simplifies the regular maintenance necessitating robust data backups to safeguard data at all costs. The modernized versions of EDI offer up-to-date features and security measures that are required to streamline your operations, securely exchange data, and increase business efficiency.

EDI integration facilitates data collection, visibility, reporting, and analysis. Efficient EDI transactions also ensure prompt and reliable product and service delivery, resulting in positive business outcomes and superlative customer experiences.

But as with every other technology, EDI integration also requires a bit of work and planning. There are things to remember and pitfalls to avoid to get the full benefits.

Here are our top 3 recommendations.

1. Incorporate flexibility to scale with Modern EDI system architecture

The one lesson we learned well in 2020 is the certainty of change. Things can happen when you least expect and turn your world upside down. In business scenarios, change comes in the form of unforeseen events. While the pandemic caused significant turbulence, seasonal changes along with industry and region-specific events are widespread. When the business network is available in the form of cloud or hybrid solutions, it is easier to scale up and down to accommodate these sudden fluctuations in transaction volumes. 

Cloud EDI system software comes with technological and business process improvements to offer greater elasticity and agility to your business. While traditional EDI enabled connections between external partners and internal resources, the new version connects partners, applications, services, and data with end-to-end combinations of both internal and client-facing business processes.

2. A robust B2B infrastructure

Your trading partners and vendors need seamless connectivity to fulfill your business demands and exchange information without disruption. The modern Cloud-based infrastructure with Native Apps, modular design, and APIs offer multi-enterprise connectivity and visibility that consistently demonstrates its ability to manage unprecedented growth in transaction volumes. 

Logistics companies have confessed to losing over $250,000 annually due to poor integration2 while 9 percent said they are losing $1,000,000 or more due to technology integration issues. Thirty-four percent of the research study participants admitted they depended heavily on manual integration processes and suffered from slow decision-making.

The right technology partner can help you implement EDI best practices while providing the necessary maintenance and support. EDI/B2B data typically comes from vendors and partners and a good service provider will help you manage it well to optimize performance and free up strategic resources.

3. Privacy and data protection

With the shift to the Cloud, you need to do everything possible to protect data. EDI brings you closer to your supply chain partners, which means essential details about your organization are vulnerable. Global operations bring in different legal frameworks, cultural differences, and diverse privacy and data protection rules. Encrypted transfer protocols and proper data storage are critical for end-to-end processes. 

You need to understand the sensitivity of data to incorporate best practices. For instance, invoice data is more sensitive than order data since it includes commercially sensitive information that needs to be protected from misuse. Ohio-based logistics startup Sauder Woodworking recently embraced a B2B fulfillment suite replete with EDI automation to drive business agility and security across its B2B ecosystem.

 Making a case for API

Modern application development enables companies to innovate rapidly by using cloud-native architectures with loosely coupled microservices that interact via Application Programming Interfaces (APIs). EDI architectures are transitioning from traditional monolithic models to a modular design that is enabled by APIs. 

Justin McMillan, the COO of logistics consulting company UpstartWorks, confirms, “Traditionally, EDI is a very strict, specification-driven technology or a way of transferring data. EDI uses AS2, a data transfer protocol, to ensure that the data between two parties is secure when it’s transferred. Whereas, API’s allow for flexibility in its abilities to customize, as it’s based on a programming format where you can make calls to certain sets of data to receive whenever you need to.”

The truth is API can serve as the perfect complement for EDI. Rather than pivoting from EDI to API, we need to augment EDI integration with API capabilities to optimize supply chain efficiencies. 

While EDI works effectively for batch processing mission-critical transactions such as financial documents, APIs come in handy for real-time data exchange.

For instance, freight carriers need real-time efficiency as well as secure B2B data exchange. APIs give them a competitive advantage with real-time shipment status and load-tender responses. At the same time, EDI formats support new standards for mission-critical transactions as per government mandates to ensure reliability and security. By integrating both into backend systems, freight carriers get the ideal mix. 

Explains Frank Kenney, director of market strategy for Cleo, “All along we’ve told our customers and prospects, ‘You’ll need real-time end-to-end visibility. You’ll need a way to connect on-prem to the cloud. API isn’t replacing EDI, they’re complementary, and you’ll need a single platform that can do both. You need the agility to turn on a dime. And you’ll want the choice to either do it yourself, get it as a managed service, or figure out some combination of the two. It’s all about you being in control of the customer experience. It’s all about optimizing your business ecosystem and creating value through integration.”

APIs help connect directly to applications and transactional systems like ERP for instant data transfer. API-driven transactions need lesser storage, memory, and computing effort to manage data exchange, making it easier to secure them with encryption and authentication methods. APIs also help onboard new partners quickly and self-service onboarding processes, making it easier for faster EDI data exchanges. No wonder APIs are an essential milestone in the digitalization roadmap of modern organizations. 

So if you are already using established EDI methods and practices to support mission-critical processes, you can strengthen them with API capabilities without making an additional investment to build separate infrastructure. A unified platform that supports such a blended solution will do the trick.

Winning with EDI

While there has been a lot of speculation and deliberation around EDI systems, the fact is EDI is here to stay. It offers concrete benefits to users and works exceedingly well in diverse IT systems. Giving it an additional boost with APIs can enhance your capabilities significantly. Collaborate with a service provider with ample experience in EDI and API integration to eliminate complexities from your business environment and get an edge to manage supply chain operations efficiently.

Switch to EDI with Trigent

Decades of experience and a highly competent team of technology experts allow us to help you improve data transfer and accuracy with EDI and API-enabled solutions. We can enable advanced supply chain process automation while supporting you during the entire process. 

Count on us for your modernization endeavors and unlock the true potential of a robust EDI system.

Call us today for a business consultation

References

  1. https://www.theinsightpartners.com/reports/electronic-data-interchange-edi-market/
  2. https://www.businesswire.com/news/home/20201214005149/en/One-in-Three-Logistics-Firms-Loses-250K-Annually-Due-to-Poor-Integration 

Top 5 Trends in the Logistics Industry to Look Out for in 2021

Logistics has been around for ages and has undergone major transformations time and again. With new advancements in technology, it continues to stretch its horizons. The burgeoning eCommerce sector has further propelled its demand. The logistics market globally is expected to touch $12,975.64 billion by 2027, at a CAGR of 6.5% for the forecast period 2020 to 2027.

Supply chain optimization technology companies Locus and Shippo recently announced $50 million in funding to expand geographically and invest in additional technology enhancements for last-mile optimization as eCommerce continues to grow globally. The eCommerce sales surged in the first quarter of 2021 by 39 percent compared to the first quarter of 2020, while the US domestic parcel market is expected to touch 100 million packages per day by 2023.

With logistics automation, IoT-enabled connected devices, and tech-driven logistics services coming into play, it’s safe to assume we are in for some significant changes in the industry. But then, change is not always bad because it brings opportunity too. In the current scenario, it has ushered in new business models and greater customer expectations. Amazon and many others are already putting customers into the habit of expecting same-day delivery. Needless to say, fast, flawless service has now become an industry standard.

There is no denying technology and changing times have sparked new trends that are all set to shape the future of transportation and logistics. While companies like Locus are leveraging technology solutions to improve visibility and on-time performance, those like FedEx are leveraging blockchain to increase their competitiveness. So let’s look at the top 5 trends that are forcing logistics companies to adjust their sail.

1. Artificial Intelligence (AI) and Machine Learning (ML)

According to a McKinsey survey, AI can help enterprises maximize their gains by more than 50 percent a year. Not surprising then, all forward-thinking organizations are now eager to adopt AI technologies. AI and ML can address problems early on and propose solutions that can help tide over challenges and improve operational efficiency. AI algorithms with the help of ML can help companies address demand fluctuations effectively. They help reduce operating costs, plan supply chain processes, and bring intelligence to administrative tasks to accelerate data-based processes. AI and ML are improving every aspect of warehousing operations, thus increasing profits. For instance, AI helps them access critical information, while machine learning helps them make sense of this information to predict and track trends and make smarter business decisions.

2. Internet of Things (IoT)

IoT sensor technology and connected IoT devices have simplified logistics chores to a great extent. From tracking shipments and inventory to vehicles and equipment, just about everything is easily accessible thanks to IoT. Modern enterprises now rely on IoT-powered container management to increase fuel efficiency, ensure preventative maintenance, and enable real-time monitoring. Drones and self-driving automated vehicles come with IoT sensors to ensure timely deliveries.
IoT startups and logistics companies are joining hands to adopt a proactive approach to container operations. Hapag-Lloyd, for instance, collaborated with Globe Tracker to come up with Hapag-Lloyd LIVE that offers powerful features like real-time GPS location, temperature information, and power-off alerts. With its fleet of around 100,000 containers equipped to serve better, this initiative will ensure enhanced supply chain transparency.

Juan Carlos Duk, Managing Director Global Commercial Development at Hapag-Lloyd, elaborates, “Customers expect more reliable supply chains, so the industry needs to change and invest sufficiently. It is imperative that we understand and fulfill our customers’ needs faster than our competitors. Inviting our customers to further shape our real-time monitoring products right from the beginning will allow them to receive products that are tailor-made for their needs – while giving us a chance to deliver the best possible service at the same time.”

3. Radio Frequency Identification (RFID)

While sensors continue to hold an important place in cargo ships, trains, and alarm systems for tracking and monitoring purposes, tags or sensors are also placed on products enabled by RFID technology. Data is sent via radio waves to be processed for tracking inventory. This is a popular labor-saving technique that allows businesses to scan tags, barcodes, and labels to get information pertaining to their containers. RFID tags have been used increasingly in the apparel sector, among many others.

The logistics industry is now leveraging RFID to get real-time visibility of goods, reduce errors, plan product locations in warehouses, and even measure temperatures in case of chemicals and medicines to ensure that the right storage requirements are met. RFID systems can pinpoint the exact location in real-time, giving logistics managers a bird’s eye view on trucks, pallets, and inventory to see things exactly the way they are across the supply chain. In sudden events or unforeseen circumstances, RFID systems work proactively by changing a delivery route.

4. EDI/API integrations

Both EDI (electronic data interchange) and API (application programming interface) are crucial for logistics companies to integrate data across communication channels. APIs, however, bring more power and flexibility to enable companies to exchange data with cloud-based apps and other digital ecosystem systems seamlessly. API integrations can be used to connect eCommerce stores with fulfillment centers to meet consumer demands successfully when same-day or next-day deliveries are becoming so popular.
Modern businesses are now exploring new possibilities by integrating EDI and API rather than choosing one over the other. They serve as a smarter solution for those who wish to modernize but are reluctant to give up on their traditional EDI solutions. In fact, the allure of an integrated platform is simply impossible to resist. It allows companies to upgrade their legacy systems and evolve into an environment that facilitates end-to-end visibility to conduct business rapidly.

5. Disruptive technologies

Technology adoption in warehouse automation globally is expected to grow from 8 percent in 2019 to 45 percent by 2030. Supply chain and logistics companies worldwide are accelerating digital transformation initiatives to make their operations more responsive. Disruptive technologies are now taking over every sphere of logistics, positively impacting businesses and those who run them.

83 percent of those participating in a survey by MHI in collaboration with Deloitte believed digital supply chains would become the predominant model in just five years. Says John Paxton, CEO of MHI, “Supply chain resilience has never been more important. Companies that made investments in digital technologies prior to the pandemic were more prepared and able to adapt, survive, and even thrive during this disruption. They will also be ready when the next crisis inevitably hits.”

Some of the top technologies that are making waves and helping organizations brave new storms include:

Blockchain – Relatively new but extremely powerful, blockchain is helping industry leaders induce transparency into their business. It facilitates safe transactions through an irrefutable decentralized ledger system and ensures quicker approvals and clearance. Blockchain with its trustless peer-to-peer network increases efficiency, reduces human error, and prevents fraud. For companies that are committed to enforcing digital initiatives, blockchain should be on the cards.

Robotics – Robotics play a significant role in increasing the speed, productivity, and accuracy of supply chain processes while ensuring that human jobs stay intact. Rather than replacing humans, they play a collaborative role to increase overall efficiency. For instance, collaborative robots offer assistance to humans in picking up, packing, and placing goods as required. On the other hand, autonomous mobile robots can help pick up goods and transport them to storage facilities. There are software robots that can do mundane, repetitive tasks to allow human workers more time to focus on chores that need human intervention. Logistics companies are leveraging Robotic Process Automation (RPA) for managing simple clerical tasks in areas like order management and after-sales service to reduce overhead costs and eliminate human error.

Related: Automated pricing operations powered by RPA helped a leading 3PL improve its revenue by 40%

Predictive analytics – Predictive analytics adoption, which currently stands at 31 percent, is expected to grow to 79 percent in the next 3-5 years. A good 43 percent of respondents plan to up their spending on predictive and prescriptive analytics to more than $ 10 million. Predictive analytics drives supply chain companies towards resiliency, helping them manage inventory, maintenance, pricing strategies, and forecasts.

Predictive analytics helps choose faster routes based on traffic, distance, weather, fuel consumption, and vehicle condition. It also helps anticipate maintenance of equipment and vehicles to minimize downtime. It forecasts demand accurately across any logistics network using historical data and market analysis data. It also helps companies adjust their prices based on need. Demand forecasts also help supply chain managers maintain an optimal level of inventory to ensure that demand is met at reduced costs by storing stock at appropriate distribution centers.

Cloud Technology – Software-as-a-service products hosted in public clouds are now a given, considering public cloud solutions are easier to implement. They allow logistics companies to leverage pay-per-use models, thereby necessitating low capital investment. Companies do not have to pay for the hefty cost of maintaining the IT infrastructure and yet get the security and scalability that the cloud offers.

Logistics companies are now leveraging cloud integrations to collect data from management systems, collaborate, and communicate to build process efficiencies and garner better business outcomes. Cloud-integrated logistics is not confined to time or space and gives greater freedom and accessibility that we desperately need today.

Sharpen your digital edge with Trigent

Trigent, with its decades of experience in the logistics sector and a process-driven approach, has been helping supply chain leaders and their ecosystem partners respond intelligently to market disruptions. Our technology experts help create lasting value by giving you keen insights into market trends and empowering you to adopt the latest innovations. Our solutions are custom-made to help you manage diverse aspects of transportation and logistics with amazing ease.

Call us today to book a business consultation.

References

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