Improve Manufacturing with EDI Processing

6 minute read | 09 Jan 2024

By Boomi

Electronic Data Interchange (EDI) is a tried-and-tested technology that has become fundamental to how manufacturers handle their orders. But just because EDI has been around for a while doesn’t mean you have to stick to legacy solutions.

By modernizing how you use EDI for order processing, your organization can automate and streamline the exchange of critical business documents like purchase orders and shipping notices.

Automation accelerates the order fulfillment cycle, reduces the need for manual intervention, improves communication between buyers and suppliers, and leads to faster response times.  Above all, it makes your business more agile and gives you a competitive edge.

What Is EDI Order Processing?

Electronic Data Interchange (EDI) order processing is a computer-to-computer exchange of structured business documents in a standard electronic format, such as EDIFACT or ANSI X12. EDI order processing facilitates the automated and seamless transmission of purchase orders, confirmations, shipping notices, and other documents between trading partners.

How Does EDI Help Manufacturers?

Modernizing EDI is key to improving your trading partner network and crucial to digital transformation. By integrating EDI with the rest of your business-critical data and applications, firms can take advantage of the many benefits EDI brings to manufacturing, including:

  1. Efficient Communication: The automated and standardized exchange of business documents computer-to-computer reduces manual intervention and enhances efficiency in data transmission between trading partners.
  2. Stronger Relationships with Suppliers: Thanks to the rapid, reliable, and accurate exchange of critical business information, you can forge stronger relationships throughout the B2B supply chain.
  3. Faster Order Processing: Automating and standardizing orders and reducing manual intervention accelerates the entire order fulfillment cycle.

Learn how the Italian-French multinational manufacturer EssilorLuxottica optimized end-to-end order processing to just 30 seconds.

  1. Improved Accuracy and Data Integrity: Automated EDI transactions are not subject to manual data entry errors or illegible handwriting. So, they are highly accurate. When combined with IoT, EDI can use real-time, sensor-generated data to enhance precision in information exchange and the reliability of electronic transactions between interconnected devices.
  2. Scalability for Growth: EDI easily accommodates increased transaction volumes, allowing a growing business to expand its network of trading partners and adapt to growing business needs without requiring significant manual intervention.
  3. Enhanced Inventory Management: EDI offers real-time visibility into inventory levels as well as data on orders and shipments. This allows businesses to minimize stockouts and keep inventory levels optimal.

Read our Paula’s Choice case study to discover how the multi-billion dollar skincare brand leveraged the Boomi platform to implement an EDI solution that automates and integrates data flows with their partners. Read the Case Study.

4 Types of Manufacturing EDI Documents

While there are hundreds of types of EDI documents, your manufacturing operations will not use them all. However, the integration of EDI and ERP (Enterprise Resource Planning) systems has transformed the way businesses swap vital information and there are several common formats integral to both that you should be aware of.

The following standardized electronic document formats are pivotal to this integration process:

  1. EDI 850 Purchase Order: Allows the automated exchange of purchase order information between trading partners, providing essential data such as product details, quantities, prices, and terms.
  2. EDI 997 Functional Acknowledgment: Confirms the receipt of an EDI transaction, such as a purchase order or invoice, by the receiving party. In addition to acknowledging the original document was successfully received, it indicates whether it meets the agreed-upon format and structural requirements, ensuring a reliable and error-free exchange of electronic data between trading partners.
  3. EDI 855 Purchase Order Acknowledgement: Provides a structured and automated way for suppliers to acknowledge and confirm the receipt and acceptance of received purchase orders. It includes information about the accepted order, including confirmation of product details, quantities, prices, and delivery dates. 
  4. EDI 856 Advanced Shipping Notice:  This document is typically sent by a supplier or manufacturer to a customer to communicate key details regarding the shipped goods. It includes the shipment’s contents, packaging details, carrier information, expected delivery dates, and any other relevant data that aids in the efficient receipt and processing of incoming goods.

The Future of EDI in Manufacturing

While EDI remains integral for standardized data exchange, manufacturing is also increasingly adopting APIs (Application Programming Interface) alongside traditional EDI protocols.

APIs offer real-time connectivity and flexibility, further enhancing interoperability in the dynamic manufacturing landscape.

With the advent of smart factories that leverage IoT and AI, the future will depend on a harmonious blend of EDI and API technologies to ensure agile communication.

How to Get Started With EDI in Manufacturing

If you want to future-proof your manufacturing operation, you need to start planning how you will adopt this technology now.

Boomi can help you prepare for a successful transition towards intelligent, data-driven manufacturing processes that optimize efficiency, reduce errors, and pave the way for Industry 4.0 advancements. We can provide a complete solution to deploy EDI anywhere flexibly and give you end-to-end visibility throughout the order process.

Learn more about how Boomi can help you modernize your EDI order processing, and contact us today with any questions you may have.