Streamline Consumer Packaged Goods Supply Chain Management with EDI Solutions
Although Electronic Data Interchange (EDI) has been around for over 50 years, recent supply chain disruptions have brought its value back into focus. In this blog post, we'll explore the advantages of leveraging EDI transactions for CPG companies, along with key statistics that demonstrate the substantial impact of EDI on cost reduction and increased accuracy.
In the complex landscape of consumer packaged goods (CPG) in 2023, successful companies understand that efficient supply chain management is crucial for success. Supply chain leaders know all too well the importance of seamless collaboration with contract manufacturers and contract packagers to stay ahead of the competition. EDI has long been a cornerstone in streamlining communication between trading partners.
From Moving Paper to Making Connections
EDI transactions standardize the way businesses communicate, eliminating the need for repetitive manual data entry and reducing errors in the process. CPG companies that use EDI transactions streamline their supply chains, enhance collaboration with contract manufacturers and packagers, and achieve significant cost savings and improved accuracy.
Integrating basic EDI transactions such as Purchase Order collaboration (document types 850/855/860), Inventory/Production (852), and Receipt and Ship Notices (940/943/944/945) into procurement can transform typical points of error into process strengths. This can result in better customer service and increased sales, ultimately enhancing your company's overall supply chain performance.
The Benefits of Electronic Data Interchange are Real
Key statistics highlighting the benefits of EDI include:
- Up to 40-50% savings on transaction processing costs (Aberdeen Group)
- Improved data accuracy by up to 30-40% compared to manual methods (Gartner)
- Faster transaction processing times by 60-70% (Forrester Research)
- Reduced Days Sales Outstanding (DSO) by an average of 20% (Electronic Payments Association)
Partnering with MSI Express
As a leading contract manufacturer, MSI Express works with customers to create a document exchange solution that best suits their business needs. More and more of our customers are choosing to transact through EDI, and it is typically required for larger-scale operations. While not exactly plug-and-play, the move towards adopting common EDI transactions typically involves the following steps:
- Discover whether customer EDI connection specifications exist or provide MSI Express standards.
- Test the connection to the EDI provider of choice using the required data format (X12, XML, EDIFACT, etc.).
- Train customer users on how EDI transactions impact business processes.
- Go live.
By following these simple steps, your company can unleash the complete potential of its supply chain, boost collaboration with contract manufacturers, and ensure timely availability of your products on store shelves. However, smaller copackers may not provide EDI services, leading to complications as your business grows. With MSI, you can begin on a strong footing and fuel business expansion using efficient EDI solutions that deliver substantial cost savings, heightened precision, and expedited processing times. Contact MSI Express now to get started!