3 Simple Steps To Streamline Your Business Order Process with EDI

3 Simple Steps To Streamline Your Business Order Process with EDI

Written by Deepak Bhagat, In Business, Published On
July 15, 2022

The retail industry is the busiest industry of all with to and from of the product demand and supply. Dealing with multiple requests by customers and trading partners, the retail industry has to deal with a heap of data and information to process and transact. It is simply not easy to channel every data that is distributed from shopping malls to stakeholders and others.

As retail businesses are growing, retailers are adopting modern and technologically advanced solutions to streamline the business as well as meet customer & traders’ expectations.

Regardless of the methods, infrastructure, and wages needed to complete the task the time invested may magnify the cost.

How does EDI help the Retail Industry?

Instead of spending hours creating and receiving orders, the retail industry can equip itself with EDI solutions. EDI helps in a quick and easy transaction of data like invoices, payment details, shipping details, and more. Retail EDI is the process and methodology for retailers to have seamless communication replacing the manual processes which eliminate the manual processes.

How does EDI in Retail Management Work?

Retailers & traders that collaborate are connected through an internal server to communicate vital information electronically. Hence any data, such as purchase order is automatically sent to the EDI system of the vendor, generating a label for every pallet. EDI also sends the shipment information and details to the retailer attached to an invoice hence, there is no minimum human intervention needed to complete the transaction.

EDI offers –

  • Speed –

Retailers can reduce their time for every order by eliminating complex steps and hours needed to complete those steps.

  • Lowered Expense –

Retailers can minimize their costs as EDI can reduce the wear and tear of the printing and faxing machines as no paper-based documents are needed to store and file a document.

  • Greater Accuracy –

EDI deter errors caused by manual entry of the information. As an order is placed via EDI, part numbers and related item info are directly integrated into the system. With EDI, your staff will not have to struggle over shipments as the system can reduce the possibility of missing, transposed numbers or letters, or other errors.

  • Increased Efficiency –

When employees have to spend less time on creating orders or manual entry, they focus more on higher-value tasks improving customer service. EDI eliminates the lengthy processes resulting in fewer out-of-stock situations, canceled orders, improved cash flow, and turning merchandise faster.

  • Better Business –

When you have accurate and error-free data at hand, you tend to make informed decisions. Retail EDI makes retailers agile and better at responding to customer needs and changing the market while opening doors to new opportunities.

EDI Documents Used In the Retail Industry

Message Types Description ANSI X12 EDIFACT
Purchase Order Transmission of data from buyer to supplier to order goods/services 850 ORDERS
Purchase Order Response Transmission of data from the supplier to the buyer to comprehend the amount of order to be fulfilled, and any discrepancies from the original order 855 ORDRSP
Invoice Transmission of data from the buyer to the supplier for payment of the goods/services 810 INVOIC
Despatch Advice Transmission of data from the supplier to the buyer to display status of the goods shipped 856 DESADV
Remittance Advice Transmission of data from the buyer to the supplier for confirming payment 820 REMADV
Product Catalog Transmission of data from the supplier to the buyer with up-to-date product and its cost information 832 PRICAT
Functional Acknowledgement An automated response sent from a receiver with EDI message to confirm receipt of the message 997 CONTRL

Key EDI Document Standards Used Within The Retail Industry

Ways To Optimize Order Fulfillment

There are a few EDI document standards used within the retail industry.


One of the early EDI standards that were heavily adopted is Tradacoms. The standard is now famously known as an EDIFACT EANCOM. Yet there are multiple companies in the retail industry that are unaware of the change and continue to use TRADACOMS.


Voluntary inter-industry Commerce Solutions was created to increase the efficiency and effectiveness of the retail supply chain. VICS pioneered the implementation of the “quick response” standard to simplify the product flow information for suppliers and retailers. VICS is now a part of GS1 US that handles planning, forecasting, collaboration, and replenishment.


This standard addresses common standards in the supply chain. eCOM consists of a group of standards that are widely used in the retail industry. However, new and improved XML eCOM standards are emerging to streamline the EDI processes.

Automated electronic data interchange and data analytics can help companies find new improvements and even new fulfillment channels to satisfy the customers.

EDI is used for streamlining the processes, such as order retrieval & fulfillment, and more. Additionally, it also aids in identifying the methods customers use most and ways to remove any bottlenecks that cause problems. Additionally, you might also want to add another fulfillment channel for keeping customers content.

Let’s move further, discussing how EDI can help streamline the order fulfillment channels.

Ways To Optimize Order Fulfillment

Any business order process is fulfilled when you are able to assess and analyze the order fulfillment model, inclusive of dropshipping, in-house shipping, outsourced 3PLs, buying & picking online/in-store, in-store fulfillment, and 3rd party marketplaces.

Moreover, you might want to ask these questions to streamline the order fulfillment, like which retailer is seeing the most significant sales, what is damaged shipment rates, is there an out-of-stock problem, and what time takes to fulfill & ship an order?

  • Integration of systems and Re-assessment of Processes

The order fulfillment process can easily be integrated with managed EDI services. EDI systems can be integrated with different software systems, like ordering & e-commerce, warehouse management, inventory management, and accounting, to simplify the processing.

After integrating all systems with EDI, you will be able to read the same data and re-assess and see if you get a common outcome. Focusing on finding and improving the bottlenecks can help you eliminate potential problems. With EDI, companies can eliminate manual processes along with the ordering process.

  • Automating Inventory Communications

By setting automatic inventory inquiries, companies stay updated in the form of alerts that keep them posted on the inventory threshold of the products. Inventory records can also be automated, set to reach a predetermined level.

Combining the sales information from all order fulfillment channels can help you from overselling or overcommitting products. Using EDI can help in keeping track of the total inventory all in one place, streamlining the order fulfillment process.

  • Aligning the Process To Reduce Friction

Look for a scenario where you have to deliver an order. You will have to carefully package the order for transportation hence you will evaluate the right side of the box. Along with receiving orders and dispatching, a retailer also has to manage returned orders.

Handling product returns are headaches, yet retailers have to deal with the inevitable. Retailers who do not focus on easy returns for their customers have the chance of losing them. More than returns, losing a lifelong, loyal customer will never help the scalability of the business.

Making necessary changes and then measuring the changes, including daily sales & returns, complaints on returns, and more can help you compare the stats with industry expectations. If you are able to meet the benchmark, it’s time to identify operational & cost efficiencies.

In a Nutshell

Integrating EDI professional services can have a great impact on the retail industry. The elongated and manual order fulfillment process can be shortened and accelerated seamlessly. With EDI, you get more visibility, improve your processes, reduce risk, eliminate errors, reduce complexity, and assess and control functions within your business.

You can cost-effectively grow your business and open doors to new opportunities while staying competitive in the market and meeting customer needs while utilizing resources mindfully. Data Interchange can certainly ensure that the business is prepared with effective and flexible order processing that gives an edge over the competitors. If you are looking for a fresh approach to EDI, you must contact a reliable and professional EDI services provider today and ensure increased efficiency and optimized scalability.

Author’s Bio:  Scarlett works with the editorial team of A3logics, a leading company offering EDI Solutions. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.

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