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The Advantages of EDI in Logistics and the Supply Chain

01/04/2019

In a decentralized and global scenario, exports and imports have increased sales and growth for thousands of companies. The world market runs on products and services conceived outside of their territory. Thanks to the development of communications and logistics, a product produced thousands of kilometers away can be competitive when compared to others in the country. Therefore any outsourcing strategy must take into consideration a comprehensive plan involving the supply chain and the logistics phase.

In the case of consumer goods such as food or drugs, the temperature control factor is an element that increases the demand of the supply chain and logistics. It is essential to maintain the proper temperature throughout the entire chain until the products arrive at the point of sale. A breakdown in the cold chain would harm the product, trigger losses and in the worst case, it could pose a risk to the consumer’s health.

There are determining factors in the logistics operations that can become real challenges if one does not plan properly and have adequate means to accomplish goals:

  • Full synchronization between manufacturer and distributor.
  • High degree of dialogue between all the agents of the logistics chain (manufacturer, distributor, transport, storage, customs, border inspection post…)
  • Perfect chain coordination.
  • Merchandise traceability.
  • Thermal traceability, that is, having real-time information about the temperature starting at a product’s preparation stage until it’s delivered to its destination.

For efficient communication

The supply chain industry faces new challenges in our decentralized and global scenario.  Exportations and importations are successful when they achieve immediate, safe and efficient communication between the origin and final destination of the product, and between the producer and the distributor.

Today EDI technology is indispensable in the logistics sector and the supply chain. It makes the relations between the actors in the chain more efficient. The electronic exchange of data facilitates the sending and receiving of all types of documents in commercial transactions in a safe, fast, and fluid manner and with full integration into the internal management systems of customers, suppliers and any partner involved in the production processes whether they are commercial or administrative.

The more members of the logistics chain use EDI technology, the more controlled the whole process will be. An export company must work with EDI solutions, and it is convenient for its partners to do the same because this will enhance the advantages of the system.

EDI technology is especially necessary in overseas exports for logistics operators that must manage shipping ports, customs, etc.

Advantages of EDI in the supply chain

For each link in the logistics chain, the application of EDI results in important concrete benefits:

  • Agility. EDI solutions allow for the automation of internal management processes such as generating, sending and recording any electronic transactions, and interacting with ERP systems so that orders, dispatch notices, electronic invoices etc., are processed without human intervention..
  • Minimize errors in management by automating the generation and sending of commercial messages (orders, shipping notices, delivery notes…)
  • Standardized messages. The exchange of electronic information via EDI uses a standardized language that structures the message and is shared by senders and receivers. Thanks to the use of a common language, the different information systems interact with each other overcoming language barriers and technical barriers.
  • EDI systems improve aspects as important as the traceability of the product. Through electronic data interchange solutions, the load and its traceability are monitored, so that the person in charge knows the status of the merchandise at all times. Users can validate the information that arrives and solve possible incidents quickly.
  • It provides information in real time that can avoid delays in the processes involved in dispatching and receiving products as well as transporting them to storage.
  • For the logistics operator, it integrates all operations by sea, land or air in the same communication flow.
  • In the management of Customs, PIF, etc., it streamlines and provides secure administrative procedures.
  • For the distributor, it helps in the planning of the resupply chain. In the case of perishable products, this management is fundamental since the expiration periods are shorter and therefore the stock must be well controlled.
  • Tools such as the CRP FLOW developed by EDICOM, facilitates the management of the continuous replenishment of the supply chain from end-to-end. This technology is based on the electronic exchange of data between the distributor, supplier and logistics operator through EDI tools. The analysis and treatment of the information and the automatic generation of orders, dispatch notices and purchase orders aim to respond to the anticipated demand through the efficient delivery of goods at the required time.

In short, an efficient logistics process is essential to supply distribution points according to demand and, consequently, to offer a quality service to the final consumer.

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