An electronic data interchange (EDI) is a method businesses use to communicate information electronically to other stakeholders, such as invoices or product information.
Electronic data interchange (EDI) is a standardized format for business-to-business electronic communication. Because of its standardization, businesses within a supply chain can quickly transfer information, such as invoices or purchase orders, in an easily understandable way.
Within the traditional method of exchanging information or communication, for example, businesses have to create, print, and mail documents to other stakeholders, which can be time-consuming. With electronic data interchange (EDI), on the other hand, businesses can use software to create a standardized, electronic version of the document and send it in near real-time. The receiving business’ system confirms receipt and stores the communication within the system.
Electronic data interchange (EDI) provides businesses with a number of benefits, including cost-savings, speed, and automation. To establish EDI within a supply chain, businesses need to integrate EDI systems into their existing communication systems. Then, they can onboard stakeholders to ensure they’re communicating effectively.