Technological innovation is fast becoming the norm in the food and beverage industry. New technologies allow for seamless interactions along the supply chain, allowing for faster ordering, production, and delivery with a higher degree of accuracy.
As seen in From farm to fork: Exploring the state of America’s food industry, food and beverage manufacturers are seeing the transformative impact of adopting new technologies. Electronic Data Interchange (EDI) is one major innovation that allows for suppliers and manufacturers to operate at a much faster pace.
EDI allows companies to move away from paper systems for business transactions and information sharing. With computer-to-computer system integration, information can flow directly from one company’s software to another company, eliminating costs associated with lost time, manual data entry, or order processing.
Standard formatting systems already in place allow for smooth exchange of purchase orders, invoices, bills of lading, shipping information, and inventory documents.
Here are five benefits of EDI for food and beverage manufacturers.
1. Cost savings
An EDI system reduces expenses related to paper, printing, faxing, filing, reproducing, storage, postage, and document management, plus the labor costs associated with those clerical and data entry tasks.
2. Improved accuracy
Faxes can be illegible. Data entry mistakes are common, even among the most accurate clerks. With EDI, automated order processing allows for more precise entry, even with supplier- or customer-specific discounts, promotions, and pricing. Order fulfillment and shipping can benefit from improved automation.
3. Regulatory compliance
With the arrival of the Food Safety Modernization Act (FSMA), food manufacturers are under increasing scrutiny for anticipating threats to food safety throughout the supply chain. An EDI solution allows for accurate monitoring and measuring of source ingredients mandated by various FSMA rules. In the case of a recall, EDI enables digital reporting in real time and more accurate track and trace functionality without having to rely on manual record review.
4. More speed, faster cycles
An EDI system can speed up your business cycles. Transactions that previously took hours or days can now be completed in minutes. The processes allow for shorter order-to-cash cycles and more reliable revenue flow and projections. Digital records facilitate better relationships with suppliers and customers alike.
5. Efficiency in operations
Imagine if staff who are currently managing paper and data entry could be used for higher-value tasks. Imagine the staff satisfaction and job quality improvement when workers are equipped with tools that make their work easier and more effective.
More accurate ordering also prompts a reduction in order errors, waste, and re-processing. With more accurate ordering, production processes such as scheduling, inventory management, and distribution can have more predictability, driven by analysis and predictive use of real-time data. Lags in production disappear with more efficient turnovers of equipment and processes.
At NexTec, we have a deep understanding of the products, features, and benefits of EDI add-ons to robust ERP products like Sage X3. Our consultants work closely with each of our clients to understand their distribution management software needs and recommend the right solutions. To learn more about how NexTec can help with your EDI needs, get a list of NexTec’s software add-ons designed for the food industry.