EDI: Cost of Implementation & Cost Saving Potential

Electronic data interchange (EDI) is an extremely successful supply chain tool that can help warehouse operators to reduce costs, improve accuracy of operations and increase facility efficiency. As with any other project your team may plan, it is critical to identify the cost of the project and see where it fits into your budget, both short and long term. In this presentation we will review the cost of implementing and maintaining EDI networks and how implementation strategies differ. Before beginning your EDI project, have your team identify any existing pain points in your supply chain operation. Once these have been identified, project objectives and strategies can be developed with these components in mind. Be sure that these pain points are measurable so that your warehouse operators can measure the success of the electronic data interchange project. Next, your team must identify whether they would like to implement an internal EDI solution or outsource to a third-party or value-added network (VAN). The cost of these implementation methods vary significantly. When implementing an in-house EDI network initially you will need to invest capital in EDI software, communication software, mapping/translation software, EDI and mapping resources and IT resources to maintain and upgrade the network regularly. If implemented internally the cost of implementing for your trading partners may fall on your plate as well, another cost consideration to take into account. In most cases, in-house EDI implementation is done only by very large supply chain operators with significant IT resource availability, such as Walmart and Amazon. For most other, using a VAN is a more cost-effective choice as it does not require investment in many of the fixed assets. Multiple different pricing models are available, but the most common are pay-as-you-go, monthly and annual subscriptions. Here you will typically pay for only the service as needed and can adjust your needs as time goes on. But, before selecting this pricing model consider transmission volume and any hidden charges that may exist as this could make your cash outlay more than expected. Regardless of selected implementation method, ongoing costs will occur for your EDI solution. Throughout the years your supply chain operation should plan to pay transmission fees, support & maintenance and other fixed annual costs. Consider these fees when planning the scope of your electronic data interchange project. The top reason to implement EDI is the significant cost saving opportunities. To learn more about how EDI can save your supply chain operation money contact Datex experts today at marketing@datexcorp.com or view more resources here