Recently, we have been seeing more and more companies running warehouse management solutions (WMS) adding electronic data interchange (EDI) to optimize their business processes. For this quick blog, we are going to talk about how EDI and WMS benefit one another and why it makes sense for companies in need of solid logistics to invest in both WMS and EDI services.
But first, a definition of terms:
WHAT IS WMS?
WMS, or Warehouse Management System, is an in-house technology that allows warehouse managers to control the movement and storage of goods within a warehouse. WMS helps warehouse managers streamline typical warehouse logistic practices like transactions, shipping, receiving, putaway, and picking.
WHAT IS EDI?
EDI, or Electronic Data Interchange, is the formatted standardization of electronic communication between two companies. EDI platforms standardize business data exchange to streamline business communications and remove the need for paper transactions. For example, EDI services replace traditional invoice management by generating, standardizing and sending invoices electronically as opposed to printing, physical sending, marking up and uploading.
HOW DO WMS AND EDI BENEFIT ONE ANOTHER?
WMS aims to simplify warehouse management, and EDI seeks to streamline direct business-to-business data communications. When joined, WMS and EDI allow companies to maintain inventory control with real-time processing while simultaneously exchanging documents and business data between suppliers and customers.
When used together, inbound/outbound inventory control gains a higher level of execution and the business deals powering those inbound/outbound inventory transactions take place instantly through secure data transmissions instead of slowly through traditional sending avenues.
Moreover, with both systems working together, the concept of lost in translation (i.e., confusing outbound/inbound inventory or misplacing valuable sales documents) becomes moot. As WMS and EDI work together in congruence, real-time processing of all transactions matched with real-time logging of all inventory ensure companies never lose sensitive business data and cargo is never misplaced.
Essentially, as the systems work together, a higher level of accountability, security, and trust is established between companies and clients.
WMS AND EDI: MONEY, MONEY, MONEY
Look, while we stand by and cheer for improving accountability, security and trust within business transactions, at the end of the day the bottom line is always what matters. In this vein, it should be noted both WMS and EDI are cloud-based services that, if you read any number of studies, has been shown to reduce costs of IT drastically for companies in all industries. The cost savings of harnessing SaaS-based applications to run your business has been consistently shown to free up additional funds to provide better solutions and services to customers. At the end of the day, this is what you want.
To bear this out, Open Sky Group, has a great three part series on the overall cost of WMS solutions highlighting cost benefits associated with utilizing a WMS service. The three-part blog focuses on:
- License Cost
- Support and Maintenance Costs
- Replacements and Consumables
- Enterprise Infrastructure Costs
- Facility Infrastructure Costs
- Education Costs
- Implementation and Integration Costs
When compared to traditional warehouse management, in every category, WMS services are consistently shown to lower warehouse operating costs, both physical and logical.
Adding EDI to the equation carries significant benefits:
- Lower business transaction costs by at minimum, 35%
- Remove legibility errors and time spent fixing them on all business documentation
- Speed up business transaction cycles by at least 60%
- Improving data quality by reducing transaction errors by 30% – 40%
- Improving order to cash cycle time by north of 20%
…you start to see where and how money can be saved.
If you are a company looking to speed up business transactions, cut down on data errors, and build security, accuracy, and trust within shipping logistics, looking into EDI and WMS is an ideal solution for you.
BOLD VAN offers EDI solutions ideal for logistics and supply chain management. To speak to an EDI logistics and SCM specialist, call today (844) 265-3777
Dig deeper into EDI and Supply Chain Management or Optimizing Logistics Through EDI