The digitization of documents has ended the era of paper documents

Electronic data interchange systems allow us to break free from routine activities that are crucial for harmonized cooperation with suppliers. They are no longer the prerogative of multinational corporations. Thanks to modern technologies, they have become available to a wide range of companies across industries. Electronic data interchange is rapidly becoming a standard, which is also environmentally friendly, thanks to its significant potential to streamline communication.

EDI (Electronic Data Interchange) is the process of electronically exchanging structured business data between different organizations. EDI enables the automatic exchange of business transactions, such as purchase orders, invoices, delivery reports, and more, between trading partners. These documents are exchanged in a standardized format that is understandable to all parties involved. EDI helps simplify and automate business processes, increases the efficiency and accuracy of information exchange, and reduces the need for manual processing of paper documents.

Digital original

The introduction of electronic communication for document exchange is part of the overall digitalization of a company. A properly configured system has a fundamental impact on efficiency, as it automates and optimizes the document exchange process. " In my opinion, EDI sets the bar very high in the field of company digitalization, because it has one unique feature compared to most other solutions - companies use it to share digital originals of documents with their business partners ," explains David Reichel, who is in charge of creating the solution architecture at GRiT, which supplies the market with a system for electronic document management. Orders or invoices sent via EDI are received by companies in the form in which their business partners issued them. The recipient therefore does not have to perform any document extraction checks.

Interest in EDI is growing rapidly

The pioneers in the introduction of electronic data interchange are traditionally multinational companies. They place increasing emphasis on the digitalization of processes, but also on reducing their carbon footprint. We can see the widespread use of EDI, for example, in the automotive industry or in the fast-moving goods segment. In recent years, electronic data interchange has also rapidly gained ground in the field of e-commerce.

" It is used by practically all major players, whether we are talking about the original 'pioneers' from the field of electronics and computing, such as Alza and Datart, to which e-shops from other segments are gradually joining, such as online retailers of food, medicines and other products ," said D. Reichel, Solution Architect at GRiT. The trend of electronic document exchange was also significantly supported by the recent coronavirus pandemic. " It can therefore be stated that EDI is no longer limited to just a few industries, but is expanding wherever goods are regularly delivered that need to be ordered, received and shipped quickly and accurately, i.e. put into storage and taken out of storage, and then paid reliably and on time based on fast invoice processing ," he explains.

When companies reach a certain size, they need to efficiently manage their warehouses and process a large number of orders. This is where automation comes in and document electronicization becomes an integral part of the process. In addition, digitalization and the "paperless office" are becoming an increasingly important topic for small companies or service providers. They often need to quickly and easily approve orders or invoices without having to print and physically send paper documents and finally process, check and send them automatically.

Time savings of tens of percent

Lidl Slovakia has so far used electronic document exchange mainly in the area of goods receipt. The company started exchanging orders electronically in 2010. " If all processes preceding order download are followed during goods receipt, EDI ordering can really save warehouse workers time ," says Peter Ištok, Head of Goods Receipt at the Záborské Logistics Center.

If the EDI order is complete and correct, the work of the goods receiving employee is also made easier. After downloading the EDI order, the employee does not have to perform any further operations and the order is immediately downloaded and saved in the internal module of the electronic system. " In contrast, with a regular order, the goods receiving employee must manually fill in data such as the delivery note number, delivered quantity, etc. The employee must search for this data in the delivery notes in a lengthy manner, which is not easy when there are a lot of delivery notes, " explains P. Ištok. The time savings for employees working with delivery notes when receiving goods are significant and reaches up to 40%.

Partners are gradually joining

The Kaufland Slovak Republic group has already implemented digital exchange of accounting documents. " We currently use EDI invoices and are gradually introducing EDI orders. EDI eliminates paper administration and saves time when processing and checking documents ," confirms Lucia Vargová, spokesperson for Kaufland Slovak Republic.

The group is actively trying to gradually involve each of its suppliers in electronic communication. Although electronic data exchange significantly facilitates cooperation, the chain is able to cooperate even with suppliers who do not yet fully use digitalization. " Electronic data exchange is not a condition for including a supplier's products in the company's sales network ," assures LH Vargová.

Emphasis on accuracy is important

However, the experience of EDI system users confirms that to achieve the full degree of optimization, a consistent approach of all stakeholders is necessary. " A system that connects multiple processes in our company with suppliers is prone to minor or major errors. On the other hand, if EDI orders are incorrect, the work of receiving goods becomes more complex and time-consuming. If the EDI order is incomplete or otherwise damaged, it cannot be used for our work and in this step we have to return to the original concept, to the classic order, " points out P. Ištok from Lidl.

Missing or invalid data, duplicate entries, or incorrect formatting are not necessarily the result of inconsistencies in the way data is entered into the system. Since there are several EDI standards on the market, if the systems that communicate with each other do not use the same standard or their implementation is not properly aligned, problems with data translation and interpretation can arise. Similar problems can also be caused by incorrect data mapping, as EDI often uses mapping tables to convert data between different formats.

Full automation of goods receipt

The benefits of properly configured electronic data interchange inspire companies to expand its use and introduce digitalization into other internal processes. Lidl's ambition is currently to fully automate the goods receipt process. " It always starts with an EDI order, which is somehow linked to the 'Driver Self-Check-In' system. Once the order is successfully and correctly used, it is then automatically processed in the system until the delivered goods are matched with the invoice for the goods and automatically paid ," describes P. Ishtok from Lidl. Currently, the chain is about halfway through the process of automating goods receipt. This department should be the first to be fully automated from the order to the self-service delivery of drivers from the warehouse.

Electronization, or more precisely, the electronic transfer of documents and data, must be seen as part of the entire ecosystem in the supply chain. Improving performance, quality and service levels will be key to maintaining the competitiveness of companies. They will have to innovate their processes and make greater use of the latest technologies that will help them optimize purchasing, speed up the handling of goods, efficiently store, ship and deliver, and get goods to the virtual shelves of e-shops as quickly as possible so that customers can buy their products.

Faster, more accurate and cheaper

" As business operations become faster and more complex, the demands on all parts of the supply chain are increasing. This also increases the need for fast communication and new levels of information sharing with trading partners. This then stimulates the expansion of communication to new processes, such as information on the availability of goods, specifying deliveries, passing on information about what is on which pallet, in which packaging and when the goods will be delivered, passing on information about inventory to improve forecasting, planning deliveries or production, and so on ," says D. Reichel from GRiT.

However, it can be expected that artificial intelligence will further streamline and accelerate processes, which will create a need for even greater data sharing. Although machine learning is already used in some areas, for example in demand prediction or processing of unstructured documents, it does not yet have the mass reach of, for example, language models. However, artificial intelligence will undoubtedly play an important role in the work of technology companies, which can increase the availability of necessary technologies and help with their faster implementation in companies.

The article was prepared by Vladimír Maťo and published on systemylogistiky.sk .