Recap of previous article ‘Is the Coalition Government helping or hindering Productivity Improvement in New Zealand?’:
In my last blog I wrote about my views on how we can resolve New Zealand’s productivity crisis. I reviewed whether I thought our Coalition Government was a friend or foe to productivity gains and reviewed some of their policies towards this.
Business Technology is changing.
The previous practice of purchasing servers and creating firewalls and purchasing hard drives etc are going quickly.
In its place are companies such as AWS and Azure offering a leased server option, where they provide the servers, the security infrastructure and secure housing with full disaster recovery redundancy.
Software solutions are also going the same way; Such as EDI software which is offered in a SaaS model. Totally managed for you by an EDI provider.
So, what is EDI?
Electronic Data Interchange or EDI is a process whereby electronic files like Purchase Orders can be transferred from the sender and uploaded electronically into the receiver’s computer system without human intervention.
What makes EDI so fantastic is that the EDI software breaks the purchase order down into data components and then re-maps the data into the format the receiver’s computer system can accept.
A bespoke EDI provider can also build into your solution, business rules and validation rules which checks the data before sending it to the receiver. In this way, files transferred via EDI are 99.5% accurate versus a 30 to 40% error rate in a manual data entry process.
Who uses EDI?
These reforms in brief are as follows;
EDI should be used by any organisation that send and receive large quantities of Purchase Orders and/or invoices and/or delivery notes to their trading partners. When the Supplier or customer uses 3rd party Warehouses (3PL), EDI becomes even more critical. An EDI SaaS solution is essential for any retailer, but especially if they offer online purchasing. When a customer orders online, the EDI solution will send the order to the warehouse. Once the goods are picked and ready for shipping, the EDI solution will send the despatch advice to the customer and an invoice to the retailer, all electronically without manual data entry! EDI can be used for sending any documents from one computer system to another. It does not have to be a Purchase Order or Invoice or warehouse documents like Picking Lists and Despatch Advices. EDI can be used to send for example, an insurance quote from a broker to the head office or inventory files from a warehouse to the retailer’s website to ensure only goods in stock are displayed on the website.
How does EDI assist Labour Productivity?
When talking about labour productivity improvement, EDI produces phenomenal results. A company implementing EDI can expect to get their product to market 61% faster compared to a manual supply chain process. EDI will eliminate all manual data entry functions within the supply chain. These human resources can either be eliminated or transferred to more value added positions with the company.
Want kind of savings can EDI provide?
It is not uncommon for EDIStech’s larger clients to eliminate up to $350,000 per annum out of their supply chain costs via our EDI solutions. Typically for smaller businesses this saving might be $50,000 to $100,000 per annum. EDI is just one SaaS software solution that companies can deploy that will have a significant impact on increasing Labour Productivity and assisting New Zealand become wealthier through increased productivity gains. If you are employing manual data entry functions within your supply chain function, contact me and let’s see what we can do for you. Oh yes and the best part is that our solution has a pay-back period of around 5 months!
Want to know more about EDIStech?
EDIStech are proudly Auckland based and are dedicated to providing leading edge, economical and secure EDI software solutions for businesses of all sizes that are time efficient and cost effective. With over 30 years’ experience in the electronic data interchange space, we developed our own proprietary EDI software, enabling us to offer standard and bespoke EDI solutions designed for SMEs right through to multi-nationals operating in the global space. Today we provide many of New Zealand and Australia’s largest Retailers, Healthcare providers, Manufacturers, Suppliers and a variety of medium sized enterprises with highly professional, secure and efficient EDI software solutions – together with friendly support and expertise.
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