Improve efficiency by replacing manual and time-consuming processes
Electronic Data Interchange (EDI) can help businesses save costs and improve efficiency by replacing manual and time-consuming processes that require human intervention and materials such as paper documents, meetings and faxes. Expenditure on forms, postage, storage and administrative overhead can be reduced or even eliminated by simply cutting the use of paper. This move of replacing paper-based processes with EDI not only offers cost savings and business efficiency, but also supports sustainability and corporate social responsibility (CSR) initiatives.
With any human intervention, there is an increased risk of error. Any error resulting from illegible handwriting and manual data entry can have a detrimental impact on business – resulting in delays, disputes and inconsistent data – ultimately affecting trading relationships. Legislation and financial regulation make it even more crucial for businesses to ensure that their business documents such as invoices are accurate and recorded effectively.
The UK Retail Grocery sector has been at the forefront of implementing technology such as EDI to maintain a lean supply chain and improve efficiency. More than 30 years ago, the sector started replacing its manual, paper-based processes with EDI based documents when trading with suppliers to cut costs, eliminate paper and improve efficiency. Today, the vast majority of UK’s leading grocers have rolled out EDI with their suppliers for purchase orders and invoices. A growing number has even extended its use to improve their planning, forecasting and reporting by collaborating with suppliers and sharing data.
There has been increased momentum in the use of despatch advices or Advanced Shipping Notices (ASNs) in the sector over the past few years. Leading UK grocery retailers such as Tesco and Sainsbury’s have started implementing ASNs with their suppliers, and many others are currently planning their roll-out programs.
Electronic Data Interchange (EDI) is the computer-to-computer exchange of standard electronic business documents
The number of suppliers using GS1 Serial Shipping Container Codes (SSCCs), which are usually included in an Advanced Shipping Notice (ASN) to identify pallets being delivered, has increased twofold over the
last year (GS1 UK Annual Survey 2009). The UK grocery sector has improved its supply chain visibility and significantly benefited from faster and more accurate transactions, deliveries and payments by using EDI. The technology has also enabled retailers to replenish their stock quicker and track trading documents more effectively.
Retailers know what is being delivered to a warehouse or store in advance when they receive an Advanced Shipping Notice (ASN) message from the supplier. Once delivered, they are able to check in the stock easily by scanning the bar-coded pallets to ensure it matches the information in the ASN message received. Suppliers are able to invoice their buyers quickly once the buyer sends a receipt advice message, and payment is processed faster due to the reduction in the amount of paperwork and reconciliation involved.
Benefits of EDI: It’s faster, Data is more accurate, Improved process, Efficiencies, Cost savings, Eliminates paper
Despite the significant benefits experienced by the grocery sector, many businesses in the UK have not taken advantage of EDI and continue to process orders manually. GS1 UK’s 2009 Annual Survey found that 81% of companies still use some form of manual, paper-based process. In a tough economic climate, cash is king. Accurate and punctual payment is a qualifying business process. Businesses today cannot afford to deal with late payments and poor trading relationships in a volatile environment – running the risk of going out of business.