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Data Integration and Transformation Blog

The Evolution of EDI in the Retail Industry

Written by Brooke Lester

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May 11, 2017 8:00:00 AM

EDI softwareThe retail industry has transformed tremendously in the past few decades; back in the 1980s, it would have been unthinkable to order merchandise from your computer. Yet today, buyers do it from our mobile phones all the time. 

One of the changes that has altered the retail landscape is the evolution of EDI. Read on to learn how EDI systems have evolved, how modern EDI software supports the retail supply chain, and how it allows retailers to stay compliant while streamlining internal and external processes.

EDI Systems: The Transformation from Unwieldy to Indispensable

EDI systems have existed for decades. As is the case with many technologies and systems, they have undergone a transformation in recent years that has made them even more useful and usable than ever. 

EDI systems have undergone a transformation that has made them more useful and usable than ever.

Up until a few years ago, implementing an EDI system was a challenging and expensive process. For a start, you either had to hire or train someone to establish and maintain connections between you and your trading partners, and you needed to invest in expensive equipment and software. The IT department was heavily involved in integrating existing systems such as ERPs and CRMs. Once the system was set up, an employee had to monitor it full-time to ensure it worked smoothly. 

Those days have come to an end, thanks to cloud computing. Now, EDI software often is based in the cloud. Retailers do not have to invest in expensive hardware or software. They also do not need to involve the IT department; integration is hassle-free. And they do not need someone to always monitor the system full-time anymore. 

The Role of EDI Software in the Modern Retail Industry

EDI software makes today’s supply chain more efficient and agile because it significantly reduces the amount of human intervention in it. Consider an example. 

Hart Toys produces some of the top children’s toys on the market. It uses cloud-based EDI software to maximize its supply chain’s efficiency. Suppose that Hart needs to order more parts from Rapid Plastics for its popular doll line. Employees create a purchase order, and it automatically enters Rapid’s order fulfillment system thanks to Hart’s EDI software.

The order does not languish in someone’s inbox for days on end.

The advantage of EDI software are that the order does not languish in someone’s inbox for days on end (or longer). Rapid Plastics processes the order faster, which means that Hart receives the parts it needs earlier, and it can get its products to market sooner. An added bonus is that Hart will have less inventory because it can sell merchandise more quickly. 

EDI software

EDI Software: Balancing Streamlined Processes with Regulatory Compliance

As a retailer, you have to balance your business goals with the need to comply with government regulations. That can be quite a challenge, but EDI software can help you fulfill both of those goals.

EDI software can help you balance your business goals with complying with government regulations.

EDI software creates a record of every transaction, so there is a trail for government agencies to follow if you are audited. The paper-free nature of EDI software also helps retailers streamline their internal and external processes. Instead of relying upon emails to communicate with supply chain partners, EDI software automatically sends information to the partner’s system, so orders and invoices are transmitted and processed faster. 

Moreover, internal processes work more efficiently, too; employees do not spend valuable time and effort entering data (and worrying about whether they completed the task correctly), because it is already in the software system.

Cloud-based EDI software has the power to transform the retail supply chain for the better. If you want your retail operation to become more agile and efficient while complying with all applicable regulations, contact us to begin a conversation about your EDI needs.