Many businesses, whether domestic or international, are active in the transport & logistics sector in one way or another. In order to manage all their processes, business partners need to be able to exchange information. This is where Electronic Data Interchange (EDI) comes into play, offering companies many benefits in this regard.
If it weren’t for the transport and logistics sector, our society would be at a literal standstill. In fact, on 1 January 2020 there were 14,347 licensed road haulage operators in the Netherlands. Margins in the logistics sector are tight and competition is fierce. Using EDI to facilitate the interchange of data between distribution partners and transport & logistics companies can make all the difference when it comes to helping operators improve their competitiveness.
Electronic Data Interchange (EDI) can be used to process POs, BOLs, invoices, and many other documents. Although partners along the distribution channel rely on a number of different communication protocols (VANx, FTP, AS2) and file formats (XML, EDI X12, EDIFACT, HIPAA and NS), EDI makes it possible for these various standards to work together within the distribution channel.
Benefits of EDI for the logistics sector
Transport companies can achieve a whole host of advantages by using EDI to improve the competitiveness of their business.
1. AUTOMATE PROCESSES
EDI makes human intervention a thing of the past and automating processes a present-day reality. Benefits of automation include processes that run 24/7 and document-relevant data that need only be input into the distribution channel once. This means businesses can avoid doubling their workload within the chain.
- ERROR-FREE PROCESSES
- LOW LABOUR COSTS
- FASTER DELIVERIES
- SATISFIED PARTNERS
- IMPROVED PROFITABILITY
- COMPREHENSIVE SUPPORT
- USEFUL MIGRATION TOOLS
2. IMPROVE PLANNING PROCESSES
Introducing EDI to the distribution channel makes it possible to plan better. Companies become more adept at anticipating future developments thanks to the abundance of information available via EDI. One benefit is that it allows them to automatically place orders when their inventory dips below a certain level, for example.
3. INCREASE CUSTOMER SATISFACTION
EDI means faster deliveries – benefitting businesses and end consumers alike. With the help of track-and-trace features, customers are updated in real time on the status of their order, giving them peace of mind as to exactly when their order will arrive. This increases customer satisfaction, which in turn improves customer retention.
4. REDUCE ERRORS
Companies working with EDI no longer need to juggle with individual paper forms. This is a huge benefit, as it is precisely these individual bits of paper that are responsible for causing countless errors along the distribution channel. Using EDI means data only has to be entered into the system once, which allows users to bid farewell to manually retyping information from forms. EDI also allows businesses to immediately clock deviations from their regular patterns, so an abnormal order quantity, for example, would trigger an automated warning to a predefined user.
5. GET A HANDLE ON YOUR PROCESSE
By linking up with external systems, companies using EDI gain access to all information in the distribution channel. This enables them to make better decisions as well as save time and money. It is also possible to use EDI to cluster information from different sources which can then be input into management dashboards.
6. RECEIVE INFORMATION IN REAL TIME
Linking systems and exchanging information makes real-time information readily available. Companies that aren’t using EDI in their business processes need longer to compile the relevant information. This is not only unnecessarily laborious but it is also time-consuming.
7. CUT COSTS
Companies that choose EDI can see the impact in their bottom line. The abundance of logistics data allows them to make faster and better decisions. This, in turn, generates savings, which can be passed on to their customers, thus improving the competitiveness of the business.
8. IMPROVE YOUR DATA EXCHANGE
Logistics companies are known for working with huge amounts of data and not only are there numerous companies working together in one distribution channel, but these companies are also co-dependent on one another. They are each responsible for carrying out a successive step in the chain to get the order delivered to the end customer. Automatically exchanging information means logistics processes can be carried out faster, with more accuracy and at a more cost-effective price point.
9. SMARTER STOCK MANAGEMENT
Good stock management can make all the difference to transport & logistics businesses. Maintaining an unnecessarily large inventory in a warehouse is not cost-effective, as it increases expenditure due to higher storage costs. By using EDI, companies can better predict how much stock they need to store in order to meet customer demand, helping them to cut storage costs and save money.
10. LESS PAPERWORK
For years, the transport industry has relied on countless paper forms, such as packing slips, order confirmations and delivery notes. Wherever one finds paper forms being manually processed in the distribution channel, one finds an increased risk of human error. What’s more, these forms can also get lost along the way, which adds unnecessary delays to logistics processes. With EDI, on the other hand, the exchange of information is fully automated, so there is no longer a need for paper copies.
DO IT YOURSELF, OUTSOURCE OR CHOOSE LOBSTER?
Designing, building and maintaining an EDI solution in-house requires a lot of time, money and energy. Companies have to consider the cost of purchasing and maintaining servers, network equipment and connections. What’s more, creating connections by hand takes a lot of time. In fact, a company will oftentimes only notice quite how long it can take when they finally finish only the first connection. And let’s not forget that as the company grows, the number of these necessary connections also increases.
Some companies may choose to hire EDI managed service providers, which offer to create the connections for these companies at a set price. Although this solution may seem very attractive at first glance, upon closer inspection it becomes clear that the costs for these managed services can quickly add up. Each new integration comes at a cost and some providers even charge an amount per integration performed. Suddenly EDI managed service providers are not as cost-effective as they first seemed.
The best bet for companies wanting to work with EDI is to choose Lobster, which charges users a one-off licence fee to exchange an unlimited amount of data. Not only does Lobster’s user-friendly software take on the lion’s share of realising integrations, it can also be run on-prem or in the cloud.
SATISFYING CUSTOMERS SINCE 2002
Every year since 2002, Lobster has helped hundreds of companies across several European countries to realise integration within their business processes. Said process improvements have, in turn, enabled these companies to significantly improve their profitability.
CUSTOMISED TRAINING AND SUPPORT.
After a three-day training course with practical examples from your own company, you can start using Lobster immediately. And if you still have questions afterwards? Then, please contact our outstanding support team by email or phone.
Companies that choose Lobster’s EDI solution are required to take part in a two-day training course which covers all of the software’s features. The great thing about this training is that it uses examples from the respective business’s own operations, with the result that, thanks to the user-friendliness of the Lobster software, new users can be up and integrating their business processes as soon as they’ve completed the training.
WANT LEARN MORE?
Over time, margins in the transport & logistics sector will only become tighter as companies grapple with an evergrowing number of competitors. In order to stay afloat in this competitive industry and harness the possibilities of data interchange, it is important that companies opt for a good EDI solution.
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