Prerequisites to successful EDI

Automating sales and ordering processes is an excellent way of optimising costs. Replacing email orders and invoices with electronic documents can save up to 90% of employees working time. Electronic data interchange allows them to focus on more important and beneficial tasks. First step towards it is preparing your business for EDI integration. 

Appoint team and project manager

Implementing electronic data interchange usually involves several parties: your own company and its departments, your business software (ERP) provider, your business partners (customers or suppliers) and an EDI provider. Coordinating tasks and communication between all these parties can be a lot to handle. There are many details that can get the project stuck. An active project manager and a well-prepared action plan are a prerequisite for any successful project. Add the necessary support from management and needed resources, and you have built a good base for EDI implementation. 

Choose an EDI operator

The most common way is to exchange documents through an EDI operator. Choosing the right one from over 500 operators in Europe can be challenging, but luckily we have prepared a guide on how to choose an EDI operator.

Train your people

It is not enough for only the EDI project team to be up to date with project goals, progress, and setbacks. All affected employees should know why electronic data interchange is being implemented, how it works and what are the benefits. It is easy to forget some colleagues, especially if they are diversely located in multiple shops or warehouses. Those people who actually handle the orders, invoices or deliveries should be trained to communicate about EDI towards your trade partners: to be able to demand electronic orders or electronic invoices, and address partners’ questions and concerns properly. The support of all those people in your organisation to the EDI project is a must. 

Set up your business software

Your business software needs to be connected to the chosen EDI operator’s system and also configured to work with electronic documents. This means receiving some set up cost from both the EDI operator and your ERP software support company, which are a good investment. 

The connection between the business software and EDI operator then needs to be tested. This helps to ensure that the correct information is reaching the right partner on time, and possible errors are identified quickly and corrected as soon as possible. After testing is complete with all document types, exchange of electronic documents can start.

Prepare your product and location data

In EDI projects, the delays are most frequently caused by and connected to product data. More specifically, missing common agreements about product data – codes and units – usage. 

Product codes: In the FMCG sector, the best practice is to use GTIN (Global Trade Item Number) for identifying products. GTIN is a format supported by GS1, a global standard institution. Some suppliers incorrectly use the same GTIN for variations of the same product (colour or size), and differentiate it with additional characters in the code. Instead, every such product/property should have its own GTIN for EDI and the retailer’s checkout system to function properly. 

Product units: It is important to agree between trade partners which units will be used in documentation. For example, whether 1 piece of individual muesli bar is ordered, or 1 box (of 24 muesli bars); or whether it’s one package of flour or 6 kg of flour. Otherwise, ordering one unit of something may end up getting the goods in unexpected and unwanted quantities. 

In addition to clarifying product data, location data is also important. Electronic documents are addressed to delivery points instead of the legal body. Best practice here prescribes using GLN (Global Location Number) for identifying the locations (shops). GLN is another GS1 issued standard that used by everyone for partner branch identification would simplify EDI a lot. All companies should apply for the GLNs from GS1 (just like they apply for GTIN codes). In Baltics, the majority of biggest retailers already have GLNs for their shops. 

Onboard your partners

The more electronic documents your business uses, the more value it gets. EDI will save up to 90% of document processing time and eliminate errors. So on-boarding your partners to EDI is crucial to maximise the benefits. EDI operators can usually give you an overview of how many of your partners are in their network and what are the benefits of starting EDI. Notifying your partners about EDI integration should be included in your EDI preparations. Customer service and marketing can be involved in successful partner onboarding, as well as in external and internal communication. Do not hesitate to ask help from your EDI operator. They have specialists who are ready to share their knowledge and carry out proper training. 

The EDI integration process can have its challenges, but it will benefit your company for years to come. Not only will EDI save the company time and money, but it improves employee productivity thanks to reducing the amount of tedious work. 

Read more about Telema EDI Supplier and EDI Buyer. Our specialists are happy to share their expertise with you to get your company started already today!