Commercial EDI automates document entry in business operations

You, retailer: would you be able to respond now if that order you made to the distributor reached him and if your point of sale will receive the goods on time? And you, supplier, do you know if all the orders sent by the retailer reached your company? Will you be able to meet all the demands by the deadline they need it? If you don’t have the answers right away for these relatively simple questions, it’s a sign that the commercial process is not yet automated in your establishment. But there is a solution for that! You’ve probably heard of EDI (Electronic Data Interchange) and know that this software, responsible for conducting the electronic traffic of documents among supply chain participants, has features divided according to the process and the information transmitted through it. One of them, the subject of this post, is Commercial EDI.

What is Commercial EDI?

Commercial EDI engages customers and suppliers in the supply chain and, through system integration at both ends, it allows the exchange of documents between them, such as purchase orders, invoices, order confirmations and amendments, and tax disputes – when inconsistencies are noticed in the issued invoices. All this is provided to their ERPs (integrated management system) automatically, eliminating the work of typing and including the information received in the program and at the same time ensuring data consistency. Also, it can be queried via web.

It works like this: purchase requests are sent via EDI to the distributor or the manufacturer, which will receive them in their business management software. Using a single channel, suppliers will be able to answer the customer if they can handle the request and delivery date, for example, and send invoices related to the service as well. Meanwhile, the retailer has visibility into the status of their order and can track whether it has been received and analyzed. If this submission were done by email, tracking would become much more complicated, because the purchasing team would have to interrupt their activities to gather feedback from the suppliers.

Think about the situation of pharmacies with their drug distributors. When ordering products such as headache relief pills of a certain brand, for example, which have a high rate of daily sales and their inventory has already entered the safety stock level, they need to know quickly if the supplier will be able to deliver the order on time, otherwise, they need to order from another, as shortage of this item can result in out-of-stock at the point of sale and compromise the level of service provided to their customers.

Another segment with critical processes is dairy, where suppliers usually set a deadline for receiving orders given the perishability of the products, and this condition should be noticeably clear in the relationship between customer and supplier so that there are no delays in deliveries. That’s why specificities like this can be registered in EDI and make transactions between the two companies more productive.

Standardizing document layouts

Another highlight of Commercial EDI is that it standardizes the format in which requests reach the supplier according to the nomenclature and measures used by this supplier. Imagine a cosmetics distributor that receives orders from at least 30 stores, each in a different way. “Boxes” can come as “bx” and “bxs”, for example, and the unit used by the distributor system is “bxx”. With Commercial EDI, cosmetics points of sale can continue to send orders the way they want, because the system is programmed to read these variations and make the conversion before making the information available in the ERP. This facilitates interpretation and return of the request, as well as customer service assertiveness. All this without the need to have a dedicated team to handle the arrival and content of these requests, as this unification also helps with automation.

Keep following this series about EDI on the blog to learn about other features of this important tool and learn how to boost your company’s performance by exchanging electronic data in all business areas!