Importance of EDI in Supply Chain and Logistics Industry
                     Enterprise 
System Solutions 
Pvt. Ltd. 
IMPORTANCE OF EDI IN SUPPLY CHAIN AND 
LOGISTICS INDUSTRY 
Importance of EDI in Supply 
Chain and Logistics Industry
 Electronic Data Interchange (EDI) format had been used 
since the 1960s between industries to exchange 
information. Prior to this format business computers were 
used by the companies to store and process data 
electronically. 
 But companies needed an expedient method to 
communicate data from one company to another. Therefore 
telecommunication was adopted as a medium to transmit 
data which as a result improved response time, reduced 
paperwork, and reduced the possibilities for transcription 
errors. However, it solved only certain part of the problem. 
Earlier electronic interchanges were based on proprietary 
formats agreed between the two trading entities. There 
was a need for a standard format for data exchange, 
therefore in the 1960’s a collective effort between industry 
types made the initial attempt at these common data 
formats. 
By the late 1970s, both users and vendors had put up the 
requirements to form a set of standard data formats that:
1. Were not hardware constrained
2. Were unambiguous; so that they could be used by all 
trading companies
3. Reducing the workforce-intensive jobs of exchanging 
data and 
4. Allowed the sender of the data to control the exchange, 
also knowing if and when the receiver received the 
transaction. 
EDI is crucial for the respondents, but on the other hand, it 
has many challenges associated with its implementation, 
using and maintaining the technological format. The biggest 
challenges companies had been facing with EDI. The most 
common challenges included: 
1. Problems in finding appropriate employees to manage EDI 
systems
2. Time is another issue which companies had pointed out as 
particularly with regards to time taken to set up with new EDI 
partners
3. Cost for implementation and maintaining of it is also an 
issue for EDI supply chain management
EDI helps companies to meet a wide range of goals set up 
under the supply chain management. EDI had been affecting 
the companies in a productive way as: reduces the processing 
time. Therefore this improves the productivity of an 
organization. Also, the number of errors are been reduced due 
to the usage of standardized interchanging data format. EDI 
has Improved inventory and warehouse management too. 
Which as a result streamlines the supply chain. 
With the EDI format, the relationship between the trading 
partners has improved. Now higher volumes of data can be 
managed and interchanged among the partners. 
EDI remains critical in any companies’ supply chain 
management strategies. Though Electronic Data 
Interchange has some of the challenges along with it, but EDI 
continues to provide companies a way to better manage their 
supply chain processes, and reduce the number of human 
errors. 
Enterprise System Solutions Pvt. Ltd.
UNITED STATES
Address: 1 City Place Drive, Ste. 282, St. Louis, MO 63141
Phone: +1-323-652-4500
-------------------------------
UNITED KINGDOM
Address: First National House, 79 College Road, Harrow, Middlesex, HA1 1BD, United 
Kingdom
Phone: +44(0) 2039661378
Fax: +44 (0) 203 178 2371
-------------------------------
DELHI
Address: C2, Sector – 1, Noida – 201301, Uttar Pradesh, India
Phone: +91-674-7106000
Fax: +91-674-7106050
-------------------------------
BHUBANESWAR
Address: InfoCity, Bhubaneswar, Odisha – 751024, India
Phone: +91-674-7106000
Fax: +91-674-7106050
Email: [email protected]
Website: https://www.esspl.com
Thank You