How EDI & APIs are shaping the future of supply chain in 2022?

Previously, EDI was simply thought of as the exchange of standard electronic documents, which were defined by standards organizations, such as ANSI X12 and UN/EDIFACT. And while modern EDI systems still adhere to many of these standards, they also support non-standard, proprietary documents, such as flat file, XML, and spread sheet syntaxes.

EDI and APIs both are simply forms of messaging, and supply chain success really boils down to finding a partner with a holistic technology solution for supply chain optimization.

The right kind of EDI supply chain strategy will enhance your operational efficiency, improve your relationships with your customers and trading partners, and give you increased visibility into your overall supply chain.

Application Programming Interfaces or APIs are actually not a new phenomenon, and some technology companies have used more robust forms of APIs – tools built for analysis and optimization – in their solutions for years.

Application Programming Interfaces or APIs are actually not a new phenomenon, and some technology companies have used more robust forms of APIs – tools built for analysis and optimization – in their solutions for years.

But the emergence of direct-to-carrier transactional APIs has led some companies providing these messages to call for a complete rejection of EDI. No single technology solution can provide all the answers. While transactional freight APIs solve many problems, they aren’t a panacea; they should be used in combination with other technologies as part of an overall shipment optimization strategy. Deploying API technology to facilitate EDI connectivity

While APIs might allow shippers and 3PLs new ways of communicating with their partners, a lot of the industry is still hesitant to embrace this messaging as the only way to do business.

Historically, price, product features and brand recognition were enough to differentiate many products in the marketplace. With the continued commoditization of many products, companies need better ways to distinguish themselves. Product innovation and brand equity no longer allowed them to command a higher price in the market. In order to continue to compete with that commoditized product the firm made significant cost improvements with supply chain redesign and technology.

The way to go:

1. vendor managed inventory (VMI)
2. labelling & packaging
3. drop shipping
4. collaboration

As supply chains continue to develop and mature there has been a move toward more intense collaboration between customers and suppliers. The level of collaboration goes beyond linking information systems to fully integrating business processes and organization structures across companies that comprise the full value chain. The ultimate goal of collaboration is to increase visibility throughout the value chain in an effort to make better management decisions and to ultimately decrease value chain costs.

No standards for API

One trend taking off in Europe is the Pan European Public Procurement Online (PEPPOL) EDI protocol. It seeks to facilitate EDI connectivity the same way a VAN would, but in a standard way. They sign up for this and that means they are signalling they are ready to recover the data and they don’t need to talk to each other- low cost of setup. EDI is pretty popular in the supply chain industry, with somewhere between 59 and 85% of companies adopting the technology. PEPPOL might be the way these companies move into EDI, strengthening the technology’s presence. Or, they might choose APIs, causing a swift takedown of EDI. One way we might see a major shift away from EDI is if all the major players in the supply chain like Walmart and Amazon moved away from it first. This would force smaller companies to follow suit. But we could also see mass adoption of API technology by smaller companies with the help of iPaaS vendors, which could then lead the larger companies to join in.

EDI and APIs have been considered adversaries as of late. But as critical as EDI is to an organization, APIs are just as integral. APIs offer additional communication flexibility, so you can more easily exchange data with cloud-based apps and other digital ecosystem systems. Instead of having to choose one over the other, companies are learning the power of EDI and API technologies working together. If you plan on evolving and growing your business, then supporting EDI and API-based processes simultaneously will give you the flexibility to support everything from legacy B2B technologies to SaaS applications and cloud storage platforms. The reality is that you shouldn’t have to pick one or the other, as they largely augment each other.

The Amazon Effect certainly has disrupted retail and e-commerce industries, and many long time business stalwarts, including Sears and Toys R Us, have been caught flat-footed and negatively impacted. Amazon changed the game with competitive pricing and lightning-fast shipping to real- time tracking and mobile support, and now providing all those things – while making yourself as easy to do business with – is of the utmost importance.

1. Moved from a brick and mortar to an online shopping system where customers are shopping from places like Amazon
2. Consumer behaviour in the last decade has changed
3. New business models for drop shipping products to customers
4. There is an increasing demand for same day and next day shipping-companies are under significant pressure to move at a rapid pace with limited disruption-cutting down on order- to-cash cycle significantly
5. Warehouse is a crucial part of the supply chain- it acts as a central depot through which everything right from raw materials waiting to be manufactured into finished goods are waiting downstream to a distribution center, retailer, or end customer to move.  Plethora of comprehensive processes that companies get caught into to keep track of inventory and load statuses which involves a lot of money and time. There are some good warehouse management software to optimize operations and drive efficiency
6. Another challenge that logistic companies face- they often struggle to have better visibility and automation of its freight and transportation dept. with no or little visibility for reporting and analytics-what is needed is real time updates about load statuses, email alerts, web- based visibility of all shipping efforts on-the-go- this will help improve on-time delivery
7. Freight Tracer utilizes advanced geo-fencing technology allowing the system to automatically track a truck’s arrival time at pick up locations or delivery destinations instead of relying on any information could be accurate or inaccurate information by the drivers- bridging the gap between manufacturers, truckers and freight carriers

To learn more about how Infocon Systems can take care of your EDI needs for supply chain EDI, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.