Application integration/ EDI in logistics management system
Electronic Data Interchange (EDI) is the transmission of information from a computer to an electronic receipt machine, which uses certain standard formats. According to the United Nations Commission on International Trade Law, electronic data interchange is defined as follows: “Electronic data interchange (EDI) is the transfer of information from one computer to another. Other electronic means by electronic means, using an agreed standard to structure the information. ”
Smartlog Warehouse Management System (SWM) và Smartlog Transport Management System (STM) both apply EDI in logistics management:
- STM: Integrate with accounting system, GPS
- SWM: Integrate with ERP (SAP, Oracle)
EDI is the first form of e-commerce used in businesses, and has existed for many years before the term e-commerce. Until now EDI is still the most important transaction in B2B e-commerce. Transaction data in B2B transactions include information contained in invoices, purchase order, quotation request, bill of lading and receipt report. With EDI, bills, orders, bills of lading, quotation requests, receipt reports and other electronic business documents can be processed directly from the issuer’s computer to the public. You receive, with great savings in time, cost and avoid many common mistakes of traditional communication ‘on paper’. EDI standards are being popularized and applied in enterprises as UN standards or international standards: ANSI ASC X12, EDIFACT, XML, TXT, …
Principles of operation of EDI
In order to implement the EDI process, it is necessary to require partners to integrate the EDI system between the partnered companies. Participating parties will send and receive electronic data in EDI format. And now commonly use the standard form is UN/ EDIFACT. The sender prepares the electronic document for sending:
The sender’s electronic data is encoded as an EDI standard based on their software system before being sent to ensure data security and security
– Translation of data for transmission: From the EDI converter, the EDI envelope for modern data needs to be transmitted to prepare the transmission of data through electronic means.
– Data transmission:
+ Option 1: EDI transmission through the public Internet.
+ Method 2: EDI transmission through value-added network – VAN.
Here, with its own software system, the receiving side receives the transmitted data sent by the sender through their software system suite based on EDI standards have been defined.
– Electronic data processing received: The data after translation will be transferred to the electronic system for processing.
Benefit of EDI application
Cost savings for businesses
+ Costs related to paper, printing, copying, filing, postage and retrieval of documents are reduced or eliminated when you switch to EDI transactions, which reduces the transaction costs for the delivery. exchange information, paper costs, correspondence.
+ Reduce the cost of processing data manually.
+ Save time because there is no need to re-enter information several times.
The speed and accuracy of transactions
+ EDI can speed up the business cycle of the business. Exchange transactions in minutes instead of days or weeks of waiting time from regular postal services.
+ Improve the quality of information, provide accurate information by reducing errors due to manually re-entering the data several times.
+ Using EDI can reduce cash flow, improve business transactions and relationships with partners and customers. EDI’s archive system ensures that documents are delivered to the partner and can track the route of goods in each stage.
Increase business efficiency
+ Automated paper-based jobs allow employees to focus on higher-value tasks and provide them with the tools to work more effectively. EDI helps to minimize staff effort and helps to minimize delays or errors that are often associated with handwriting processing.
+ Quickly handle business documents accurately, reduce errors in orders, invoices, … help reduce the case of compensation, canceled orders due to errors. Automating the exchange of data between applications through a supply chain can ensure that critical business data is sent on time and can be tracked in real time. Sellers benefit from improving cash flow and reducing cash flow cycles.
+ EDI helps reduce inventory time, and also the amount of inventory as it is integrated with automatic warehouse system
+ The trade cycle of the trade faster, helping to meet the needs of customers more effectively.
+ Create opportunities to promote supply and production activities to increase competitiveness.
Benefits in business strategy
+ EDI allows real time visibility into transaction status. This will enable businesses to make faster decisions to respond to changing market needs, allowing businesses to adopt a demand-driven business model rather than a source of supply.
+ Shorten delivery time, improve products and distribute new products.
+ Promote social responsibility and sustainable development by replacing paper-based processes with electronic processes.