A manufacturer spent six months and $200,000 implementing EDI (electronic data interchange) with their largest trading partner. Launch day arrives, orders start flowing, and then everything breaks. Wrong product codes, incorrect pricing, and other errors begin to flood the system, shipping gets delayed, and the trading partner threatens penalties. If this sounds familiar, the problem may not be what you think it is.
When you reach out for help, most advice focuses on technical glitches or software bugs. But you find that the real issue is people, not technology. Companies treat EDI like a software implementation – and it is, but it’s more than that. It's actually about changing how humans and machines communicate.
Those companies that succeed fix both their code and their processes. They understand that EDI is 20% technology and 80% change management.
Before embarking on an EDI implementation, review common pitfalls and how to avoid them. These lessons on EDI for manufacturers are important for leaders and IT teams in EDI production environments.
Here are 10 common EDI implementation mistakes and how to avoid them:
Relying solely on IT teams for EDI projects can lead to technological solutions that are ineffective in practice. These teams tend to concentrate on system connectivity but neglect how data flows influence frontline teams.
IT does a great job on the technical side, but often, the daily business processes are not considered in the design and implementation of EDI.
EDI errors often arise from discrepancies between technical designs and actual workflows. The data that flows in may not be inclusive of the needs of the business downstream from the initial data flow.
For example, IT might denote "delivery date" as a single field, while shipping teams utilize three distinct timestamps (promised, estimated, and actual). Such disconnects can lead to production timing issues as well as shipping dates being missed, which then leads to Purchase Order Confirmations (855) and or Advanced Shipping Notice (ASN/856) failures.
Establish an implementation team composed of end users from purchasing, logistics, finance, and customer service. During design reviews, give departments decision-making authority. This strategy minimizes post-launch errors by ensuring EDI mappings align with real-life business practices.
Encourage IT staff to rotate through operational roles during execution. Job shadowing can be a valuable tool during the design phase. When developers experience the real work firsthand, they create practical solutions.
For most companies, your data is messier than you realize. Product codes vary, customer numbers overlap, and pricing exceptions are hidden in spreadsheets. There can be multiple obsolete parts or products that no one realizes is hindering the smooth flow of data.
Poor data quality leads to numerous EDI transaction failures, each requiring manual intervention, resulting in chargebacks and strained relationships with partners. Having 20 representations for the same product across your systems is far from ideal, and not informing your trading partners of the correct ones to use will cause headaches during an EDI implementation.
Conduct data archaeology before you even begin your EDI project. Export your product catalog, customer list, and pricing tables to identify duplicates, missing fields, and inconsistencies. Address these issues now internally and with your partners to avoid future issues that can lead to additional costs.
Companies that achieve smooth EDI rollouts prioritize data cleanup before implementing EDI. Although it may seem cumbersome and may slow down the project initially, it is the quickest route to success.
The misleading common belief is that it EDI will run itself once implemented. In a perfect project, the majority of the transactions will run through seamlessly, but there will always be exceptions to be managed.
Trading partners frequently update their requirements, and product catalogs are constantly changing. Partners are adding new ship-to locations on a regular basis. Without ongoing monitoring, these changes can escalate into significant disruptions. A single missing error notification can lead to thousands of transaction failures downstream.
Incorporate error management into your business framework. Educate staff to identify and address frequent problems and set up alerts to capture attention. Transition away from email notifications that get lost in inboxes and use error reporting in an effective and useful way.
Delegate EDI health checks to someone outside the IT department to ensure that the right issues are identified. Your system is resilient if the end users are the ones who can determine where efficiencies could be achieved. Listen to the input of those who are processing the transactions daily and maximize their knowledge base. Giving them a voice in the process will greatly enhance the efficiency of EDI.
A common blind spot focuses on internal systems, neglecting the fact that EDI involves collaboration with external partners.
Developing an EDI system that integrates seamlessly with your ERP but causes challenges for your trading partners can lead to difficulties. They may find it hard to work with your data formats or struggle to incorporate your transmissions into their workflows. Having regular errors on any transactions is not efficient for your company or the partner.
It is crucial to prioritize understanding your partner's needs over your internal capabilities. Start by outlining data requirements, then identify how to extract that information from your systems. This strategy helps avoid costly rework and fosters stronger partnerships.
Use supplier scorecards effectively to identify gaps in the process. If you are regularly scoring 95% and above on scorecards, you have a pretty good indicator that things are going well. Anything below 90% should be identified as a gap and should be a good indicator of where you may have data issues.
Before starting any design, engage with your top three trading partners. Ask about their EDI standards, testing needs, and any challenges they face with their suppliers. Use this valuable insight to inform your implementation strategy. You may not be able to glean this information from your partners directly, but a quick internet search can also help you learn what others have learned.
EDI execution errors are not random; they adhere to recognizable patterns. Companies often repeat the same errors in a similar order, leading to failures that appear distinct but are systematic.
The pattern looks like this:
Create a "pre-mortem" exercise. Imagine your EDI undertaking failed spectacularly. Identify all potential issues that could have occurred. Then, develop preventive measures for each situation. This can save you from costly corrections in the future.
This less effective process involves selecting EDI software first and then adapting your policies and procedures to it. It can also be choosing to use a legacy system that is no longer ideal, but sticking with it because it is familiar.
A more efficient strategy is to:
Only after this is completed should you select technology that supports your ideal workflow.
Your EDI system should seamlessly integrate with your daily operations. If employees need to consciously consider EDI to perform their tasks, the solution may be inadequate or improperly designed, or improperly implemented.
Completing basic tests is often mistaken for being production-ready because teams focus on ideal scenarios rather than everyday complexities. EDI failures typically occur in untested edge cases, such as partners sending old EDI segments or UTF-8 characters that break XML parsers. They suddenly sent new, unseen before data, and if you have not tested the complex cases, you’ll be in a pickle trying to determine how to dig out of the mess.
Comprehensive testing requires:
Creating custom code for partner-specific exceptions can quickly lead to accumulating technical debt. Coding for each possible scenario is unrealistic and costly.
To navigate out of this situation:
Documentation seems to take a back seat more often than it should. When teams lose essential knowledge after key personnel leave, things deteriorate faster than you may expect.
Building only for current partners while ignoring industry changes leaves companies vulnerable. When major platforms switch systems, outdated connections break, leading to payment delays.
Here's how to future-proof your business:
Treating EDI as a standalone tool creates data silos that kill efficiency. Companies with a deep ERP integration complete more orders per hour than those using middleware. EDI integration with your ERP system removes data silos and boosts automation.
The integration playbook:
Choose an ERP-integrated EDI solution like EnTrust to reduce manual work and connect EDI to your business systems.
Manufacturers often view EDI as a chore, checking a box to keep partners happy. Instead, companies should view EDI as a relationship builder. When transactions run smoothly, partners want to work with them. They win business through price, quality, and seamless operations.
These Electronic Data Interchange strategies eliminate errors and build supply chain success.
Ready to simplify your EDI implementation? Schedule a Free Discovery Call to see how EnTrust can help you avoid common EDI pitfalls.