EDI 4.0 for agile supply chains

EDI 4.0 for agile supply chains


Manufacturing and retail supply chains need to become ever more agile. Whether its delivery to the home or production line-side, expectations are of instant availability. On the other hand, a wider supply base and the ability of customers to specify individual preferences militate against the concept of a ‘standard’ product. 

With demand ever more fragmented and unpredictable, companies need agility to become more responsive to retain and grow business. As a consequence, the amount of data communicated up and down supply chains is growing exponentially. Today, complex data set traffic for even relatively small or niche manufacturers is on a par with what major automotive, electronics or FMCG manufacturers were coping with only a decade or so ago. 

Those companies back then found a solution in EDI (electronic data interchange) and it is becoming an imperative for many more businesses as the concept ‘Industry 4.0’ becomes a reality.

Industry 4.0 brings increasingly widespread commitment to technologies such as the ‘Internet of Things’ (IoT), predictive analytics, and autonomous and self-learning systems, seems bound to further accelerate timescales and increase the requirement for agile responses.

Where does this leave the mature, technique of EDI? The answer is: still, and increasingly, at the centre of things – although perhaps not quite in its current form. The key point about the IoT and the other new technologies is that they will disrupt the familiar, linear progression of design – plan – source – make – deliver, along with the orderly flow of data and instructions.

Tomorrow’s world will be one of digital, dynamic, interconnected systems in which vital data is exchanged synchronously rather than sequentially. 

A Tier 3 supplier in the car industry, for example, may have almost immediate access to dealer sales and forecast data and thus be able to plan for change immediately.

More excitingly, Industry 4.0 will mean yet further increase in the sheer volume of data being gathered, from the billions of IoT devices and otherwise. Smart analytics will sift through this – identifying trends and threats and learning from experience – to recommend and perhaps autonomously implement changes and remedies. Sales, planning, scheduling, manufacturing and, crucially, financing and costing systems will be working out the significance of a new order or a delayed shipment, in collaboration with the systems of other supply chain partners, in close to real time. 

Systems, talking machine to machine, may ‘negotiate’ on alternative solutions based on common, if distributed, sources of data but applying the varying business logics and imperatives of all parties. This may include elements of dynamic pricing. A whole new class of data sets will need to be exchanged.

This could all be done through EDI very much faster and more reliably than any conceivable system based on manual inputs and communications.

However, this approach does require EDI to be affordable, almost infinitely scaleable, readily updateable, totally reliable, and cyber-secure. ‘EDI 4.0’, if you like.

It is increasingly difficult, even under current conditions, for even the largest manufacturers or retailers to create and maintain such a network for themselves, especially as the cast of other players (customers, suppliers, carriers and others) in the network is ever more diverse and changeable. Rather, the core of the ‘EDI 4.0’ solution should lie with common, preferably open, standard managed services, with a secure and distributed (cloud-based) architecture, and with transparent, usage-based charging.

In this brave new world, effective EDI will no longer be ‘merely’ a tool for cost reduction and efficiency gains: it will be an entry level requirement.   

For further information, send us an email at info@datainterchange.com or keep up-to-date on the all the latest developments in EDI by following our Linkedin profile.