EDI Mythbusting: Separating Fact from Fiction in Supply Chain Automation

If you work in manufacturing or distribution, you've probably heard of the concept of an electronic data exchange (EDI). But chances are you've also heard some negative things. Maybe someone told you that it's too costly. Perhaps you've heard it's outdated. Or that it's only useful for larger companies with complex, intricate systems.

That reputation has stuck around longer than it should have. And unfortunately, those myths cause businesses to hesitate when considering a tool that could save time, cut costs, and make their operations run smoothly.

So let's clear the air on what EDI is and what it can do for your business. 

EDI in manufacturing allows businesses to automatically exchange important documents like purchase orders, invoices, and shipping updates between systems. Instead of relying on email, spreadsheets, or manual entry, EDI moves the data directly into your enterprise resource planning (ERP) tool or other systems in a structured format. The result is fewer delays, fewer errors, and enhanced visibility into your operations.

So while the idea of EDI is simple, the conversation around it has gotten somewhat confused and complicated. That's because a lot of people are working off outdated information. Let's dive deeper into the most common myths about EDI and show you what it really looks like today.

Why These Myths Still Exist

One reason the myths around EDI still abound is because of how EDI worked in the past.

If you used EDI twenty years ago, it probably involved...

• Expensive servers
• Custom development
• Systems that were harder to scale

For small businesses without the resources to support them, this likely caused a lot of headaches. Those early challenges created a lasting impression. Even though EDI has improved a lot since then, the reputation stuck.

Another factor is the rise of newer technologies. APIs, for example, are often seen as the modern way to connect systems. That's true in some cases, but it doesn't mean EDI has disappeared or become irrelevant. In fact, many companies use both EDI and APIs to handle different types of communication.

The result is a lot of confusion. Some companies put off adopting EDI because they think it's too old or too complex. Others assume their ERP already does everything EDI can do. And many just aren't sure what to believe.

But don't let the past dictate the future of your business. Here's the truth behind EDI. 

The Top 7 EDI Myths (and the truth behind them)

Myth 1: EDI is an outdated technology

Not remotely true. EDI is still widely used and continues to evolve. Modern EDI platforms are cloud-based, integrate with APIs, and work directly with today's ERP systems. It is still one of the most reliable ways to exchange structured business data.

Myth 2: EDI is only for big companies

Once again, false. Small and mid-sized businesses use EDI every day. Cloud-based tools and managed service providers have made it affordable and accessible. You don't need a big IT team or a massive budget to benefit.

Myth 3: EDI is too expensive to implement

The only thing riskier than implementing EDI is what might happen if you don't implement EDI. Manual processes often cost more in the long run. If your team spends hours every week rekeying orders or correcting errors, that time adds up. EDI eliminates those tasks and reduces costly mistakes, which leads to long-term savings.

Myth 4: EDI replaces people

EDI handles repetitive tasks like data entry. What it can't do is replace your staff. It gives them more time to focus on strategic, high-level tasks that contribute more to your business's bottom line. Think of it as an augmentation for your team members, not a stand-in. 

Myth 5: Once EDI is live, it runs perfectly without help

Like any system, EDI needs regular updates and monitoring. Trading partners may change their document requirements. Your ERP might get upgraded. The right EDI provider will help you stay in compliance and keep everything working as expected.

Myth 6: APIs have replaced EDI

APIs are useful for real-time communication, but they do not replace EDI. Most supply chains still rely on EDI because it is secure and structured. Many businesses use APIs for certain functions and EDI for others. Both have value, depending on the situation.

Myth 7: My ERP already handles everything

Your ERP system manages many internal processes, but it still needs clean, accurate data from outside sources. EDI delivers that data in a structured format that your ERP can use. Without EDI, your team may still rely on difficult-to-navigate spreadsheets, which slows down your operations and increases the chance of error.

A quick summary of what you should know about EDI

• EDI is not outdated. It is modern and built for today's systems.
• EDI is not just for large companies. It scales well for smaller businesses, too.
• EDI is not too expensive. Manual work and errors cost more.
• EDI does not replace people. It helps your team focus on meaningful work.
• EDI is not set-it-and-forget-it. It needs updates and support like any system.
• APIs have not replaced EDI. Most businesses use both depending on the need.
• ERP systems are powerful, but EDI gives them the external data they need to work efficiently.

If your business is still handling orders and invoices manually, you're likely spending more time and money than you need to. EDI offers a proven way to automate routine tasks and make your supply chain more reliable.

EDI for SMBs

The right EDI solution will do more for your small business than just move data between systems. It will help you:

• Improve order accuracy
• Reduce manual entry
• Speed up communication with your trading partners
• Comply with your retail and manufacturing partner requirements
• Increase the ROI you receive from your existing ERP

With better data and fewer delays, your team can make smarter decisions and respond faster. EDI might not be a new concept, but it is still one of the most trusted ways to keep your supply chain running smoothly. It's not a tool of the past. It's a modern solution that many growing businesses of all sizes rely on every day.

Ready To Take The Next Step?

If you are curious about how EDI would fit into your business for supply chain automation, we have two easy ways to get started.

Take the EDI ROI Analyzer Quiz to see how much time and money you could save by automating key processes.

With the right approach, EDI can help you enhance your operations, cut down on mundane, manual tasks, and improve how your ERP performs.

For more on how to move forward with EDI, schedule a consultation.