EDI IS ESSENTIAL TO SUPPLY CHAIN MANAGEMENT

By
Nicole Wilson
August 27, 2023
5 min read
Share this post

Within the field of supply chain management (SCM), ElectronicData Interchange (EDI) is an industry standard. Big retailers, such as Amazon.com and Walmart, require EDI from all their suppliers. However, even still, not all companies in the supply chain utilize EDI. Others use EDI minimally.

Industry leaders require EDI from suppliers because of the many benefits and efficiencies EDI provides.

Communication between trading partners in SCM is constant. A typical transaction between a buyer and a supplier functions as follows. A supplier receives a purchase order from a buyer. The supplier then needs to acknowledge the order with any changes if required. The buyer then confirms the acknowledgment. The supplier sends a final order acknowledgment, an Advanced Shipment Notification, and an Invoice to the buyer.Manually receiving orders is still taking place, especially by smaller companies. A person takes the order over the phone, via fax, or by email and enters the order by hand. This process wastes time and introduces errors due to mishandling and entering data incorrectly. Furthermore, because of time wasted and miscommunication suppliers' inventories may not be optimized.

This process wastes time and introduces errors due to mishandling and entering data incorrectly.

Other suppliers may use EDI only to receive orders so they may conduct business with buyers that require EDI. Because of out-dated order systems they receive an order electronically and then manually handle the order. Electronically receiving orders and then manually controlling them does little to mitigate errors. Some suppliers are only capable of receiving a limited number of EDI documents.With EDI, the SCM process is automated and takes a fraction of the time and eliminates the errors of manually handling transactions. EDI works by converting data and forms into standard formats so that different electronic systems may communicate.Buyers, suppliers, logistic providers and customers all utilize EDI. Thus, when one part of the supply chain manually handles transactions, the bottleneck affects the rest of the chain.Electronic Data Interchange generates faster ROI and creates better relationships between trading partners.If a supplier expects to gain the business of industry leaders, they must implement EDI.In the situations of not using EDI at all and limiting the use of EDI, the most common belief is that implementing EDI is cost prohibitive. This may be true if a supplier tackles EDI in-house: suppliers will purchase both hardware and software, they will hire an EDI staff, and suppliers must make updates to systems.

OUTSOURCING EDI SERVICES TO A VALUE-ADDED NETWORK (VAN) IS A VIABLE SOLUTION FOR COMPANIES OF ALL SIZES.

A VAN handles all the complexities of EDI so that suppliers may focus on day-to-day business. They onboard trading partners. Data and forms are retrievable. No software or hardware may have to be purchased as many VANs operate from the cloud. Most VANs enable suppliers to manage EDI from any device.BOLD VAN advances EDI for SCM further by integrating data from trading partners into readable files. You no longer have to wait for flat files to integrate and have immediate access to readable data.BOLD VAN thrives in finding ways for EDI to make business easier and more efficient.Want more? Read about optimizing logistics through EDI.

Nicole Wilson
Content Manager

Latest articles

Solutions
October 22, 2025

Consolidating EDI VAN Providers: How a Unified Platform Reduces Risk, Cost, and Complexity for Manufacturers

Consolidating multiple EDI VAN providers into a single unified platform streamlines your supply chain by eliminating hidden fees, reducing risks, and simplifying management. This approach offers predictable pricing, centralized compliance, and expert support, helping manufacturers boost efficiency and scalability while cutting costs.

Solutions
October 21, 2025

Real-World Lessons from Integrating EDI with Shopify, BigCommerce, and D2C

This blog provides practical insights into integrating EDI with e-commerce platforms like Shopify and BigCommerce, emphasizing the importance of understanding trading partner requirements, robust testing, and choosing scalable solutions over cheap, one-size-fits-all tools. It highlights real-world lessons for avoiding common pitfalls, ensuring data mapping precision, and maintaining responsive support to keep D2C and B2B channels running smoothly.

Solutions
October 20, 2025

Why Chargebacks Happen in CPG and Retail and How EDI Mapping Can Prevent Them

Chargebacks can drain profit across the CPG and retail supply chain, but most are preventable. Learn how disciplined, proactive EDI mapping eliminates labeling, timing, and data errors before they trigger costly deductions and delays.

Achieve more from your EDI VAN provider.