Technology Update
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How EDI improves automation processes in Brazilian companies
05/06/2018
In a recent study, GS1 Brazil expounded on the state of automation in the country’s market and its impact between companies and consumers. Automation is a concept that’s associated with innovation and technology. Its application in different areas results in benefits such as saving time, resources and ultimately economic costs. Additionally, in everyday life it is association with well-being. In the industry and in commerce, the search for standardized processes that optimize costs has favored the implementation of EDI (Electronic Data Interchange) technology.
The objective of the report, “The impacts of automation between companies and consumers in Brazil” carried out in conjunction with the market research company Gfk Brazil, is to know what the trends in automation are so that companies can adapt and evolve in relation to demand.
The development of automatic processes varies in their application and development according to sectors. Strictly private fields like automation in homes, wearables, mobile applications, or serial devices in vehicles are extending the use of automation in daily routines. The high level of access to the Internet through smartphones and the use of mobile applications allowing users to control items such as appliances, security cameras, digital car panels etc., make life more practical, comfortable and safe converting these types of products into a growing need for consumers who purchase technological devices that are more popular and economically accessible.
In the industry and in commerce, automation helps to establish standardized processes in sectors such as automotive and retail. According to the study, in a very competitive market, automation becomes a driving force for differentiation in matters of product quality, better processes and lower costs.
Automation in Brazilian companies
Digitalization and automation define the industry and commerce of the present and future. In Brazil, this trend is mainly applied through the implementation of management systems and customer service software such as ERP systems and CRMs respectively. It is also applied to logistics (storage and distribution), to production lines, to the relationships with suppliers, to customer service and in the store.
According to figures, 67% of companies in the industry that were interviewed for the study use management systems, of which 88% apply to all areas of the business. In commerce, 54% have a management system of which 91% is integrated with all areas of the companies. A management system such as an ERP system provides all the company’s information in a single platform and allows for automated processes and for the integration of different company databases in a single program. It controls invoicing, purchases, inventory, human resources, etc.
In regards to production lines, equipment automation is high. In Brazil, factories have an average of five production lines, 65% of them are automated, which means that processes are carried out with machines and equipment without human intervention. In other fields such as storage and transport and applications such as tracking systems, automation optimizes the production line and improves processes.
Also in commerce, communication with suppliers is standardized in 63% of cases and in 44%, the stock sends automatic messages when replacements are needed.
One of the aspects in which the study reveals a huge lack of automation is in terms of customer relations (purchasing behavior, consumer profiles, etc.). The collection and analysis of this information is yet to be utilized especially in the case of the industry while in commerce 26% of companies already use the consumer profile for supplying products and services according to their preferences.
Brazilian companies are aware of the benefits of automating processes. However, they are inhibited by the perception of the need to change the entire production process for greater automation in the industry and by the perception of the need to make a high cost investment in order to yield long-term results in commerce and services.
How does EDI help automation processes?
EDI can be applied to each one of the areas where automation is currently most important in Brazil (management systems, logistics, production lines, supplier relations, customer service and stores) which will increase the figures in each case and improve development in areas that aren’t as automated.
EDI technology is in itself a tool for automating processes in different areas of business but also allows data and documents to be shared with different management systems such as ERP systems, a fundamental technology in relations with customers and suppliers. In this sense, EDI favors B2B communication no matter the sector.
In supplier relations, the exchange of messages allows for the integration and automation of messages such as generating orders with commercial partners into the ERP system, helping to optimize and make processes more efficient.
Specifically in the retail sector EDI favors:
- The development of a complete flow of transactions with any retailer incorporating new messages that favor communications throughout the entire supply chain: order, delivery notice, receipt confirmation, and invoice.
- Resource planning to reduce stocks of finished product and raw materials. Continuously exchanging information with customers allows companies to analyze demand forecasting based on realistic demand forecasting systems.
For more information, consult this post, “How to work via EDI with e-Commerce platforms on Amazon or Google”
In the logistics sector, EDI is applied to:
- Establish a shared message system that details the movement of merchandise between warehouses in order to save time and money and to ensure security and traceability.
- Develop permanent traceability between the documents issued and received by agents moving the merchandise: supplier, customer and logistics operator.
- Share information between the supplier and the logistics operator to control in real time the details of stock available in each warehouse. Through standardized and automatic communications, the warehouses are able to exchange a multitude of commercial documents, providing a large amount of information such as sales reports, stock reports, shipping notices, shipping instructions, etc. to the rest of the actors in the logistics chain.
For more information, consult this post, “The digital transformation of logistic warehouses: EDI and AS2 connections”
In the automotive sector, EDI allows users to:
- Automate the generation and integration of multiformat data structures adapted to the requirements of each client.
- Share information in real time to adjust the supply chain based on knowledge of stock inventory, notifications of receipt of goods, etc.
Read more about “Automotive EDI and what is OFTP2.”
EDICOM is a technology provider specializing in EDI technology. Its solutions create environments that favor the exchange of information between companies in an automated and secure way.
For example, EDICOMNet is one of the main trading partner communities for the exchange of electronic transactions in B2B environments. Its presence guarantees access to most business partners, simplifying the sending and receiving of structured commercial documents (EDIFACT, X12, XML, UBL…) with a 100% guarantee and maximum security.
For customers without EDI solutions, a B2B communications platform has been created through Partner Web Portal to integrate complementary solutions for the automization of 100% of orders.
Scalability in favor of automation
One of the advantages of EDI technology is its scalability, which allows a step-by step investment according to the client’s needs. Thanks to a technological infrastructure hosted in the cloud, the benefits that can be achieved with EDI are complemented, adapted and increased to the extent that it is necessary to respond to the growth of a company’s activity. This characteristic of EDI solutions is key to overcoming the reluctance that some companies experience due to their costs, since it is more of a mental factor than an economic one.
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