No surprise, today’s most successful supply chain companies are doing more and more business electronically. From a personal consumer perspective, aren’t we all? Industry leaders like Amazon, AutoZone and Walmart understand this and are driven from the boardroom to the warehouse to handle all aspects of business over proliferating electronic channels. Suppliers at each level up on the supply chain are finding it necessary to accommodate their down-channel customers’ end-customer’s desire for, and reliance on, real-time transactions and information. This has a challenging ripple effect on their suppliers, carriers and 3PLs, as well as their own operations.
So, what’s becoming more important? For B2B, and B2B-fulfilling-for-C, interdependence, collaboration and flexibility are joining responsiveness, accuracy and quality product as hallmarks of a successful business relationship. For any kind of profitable volume, Integration at the data level between business systems remains THE basic requirement to achieve this.
Taking a high-level view, there are two main technologies being used today to exchange and integrate data between business systems: Electronic Data Interchange (EDI) and Application Programming Interfaces (APIs). The chart below examines the functional differences of these two approaches as might be important to a supply chain company.
|E D I||A P I s|
|Types of Message Content||PO, PO ACK, ASN, Invoice, Order Status, many more||Same, with an emphasis on real-time queries such as pricing & availability|
|Typical Trading Partners||Amazon, AutoZone, GM, Walmart- big retail & manufacturers, buying groups||Amazon, Jet.com, e-commerce shopping carts, carriers|
|Usage in the Supply Chain||Still growing||Growing exponentially|
|Max Speed||Minutes, although typically batch processed on a schedule||Real-time|
|Content Structure specified by||Usually provided by customer||Target business system|
|Response to message Content||Another EDI message||May be immediate and actionable|
|Visibility of messages end to end||Varies by business system and middleware||Varies by target business system|
|Use with Legacy business systems||Good||Not recommended for direct integration|
|Best Integrated by||Person most familiar with trading partner and target business system, and EDI implementer||Person most familiar with trading partner and target business system, and API developer|
|Maintenance required||Minimal, as usually stable & well-defined||Comparably, more due to moving target aspects|
|Transport||HTTP/S, SFTP, FTP||HTTP/S|
|Response to message Transport||Immediate for some, otherwise return EDI message||Immediate|
|Content Type||X12, EDIFACT||JSON or XML|
|Security of message||may be encrypted||may be encrypted|
|# of Transactions in a Message||One to large quantity||One|
|Bulk (size) of Message||Least, especially for larger batches||XML is bulky, JSON less so but still carries descriptors with each data element|
|Readability of raw message||Easy for EDI-savvy||Should be easier|
Both EDI & APIs may have a place in your organization. There is no need to choose one over the other, only what is most appropriate for your various business requirements and considering your human and system resources. GraceBlood’s typical distribution client is using EDI for trading with customers and suppliers, and APIs for carriers and their e-commerce shopping carts. In any case, achieving Integration for as much business activity as possible is paramount.
Preparation for Integration – Best Practices for EDI, Required for APIs!
- Inventory system is in order – items, warehouses, availability, catalog information including size & weights
- Order management system is well-used – pricing, fulfillment priorities, notifications, returns
- Shipping system is integrated with order management
- Inventory system is integrated with Everything
- Systems Housekeeping is a Routine Process
- Printing to paper is Very Unusual
- The company runs by ADWIAD, “A Day’s Work in A Day”, and usage of all business systems supports this
- Business partners are selected by their ability to ADWIAD too
More than ever, supply chain success means meeting the challenge of keeping up with the down-channel customer – us!