Supply Chain Management: EDI Versus API

Technology has a huge impact on the supply chain and has introduced several solutions that are designed to improve connectivity throughout the entire logistics operation. Two of the most common include electronic data interchange (EDI) and application program interface (API). 

These protocols are used throughout multiple industries to streamline the flow of communication and daily fulfillment tasks through cloud-based SaaS solutions. Additionally, they are both aimed at helping to automate various tasks. In turn, this saves supply chains money, time, and has the potential of increasing the speed of daily operations. 

So, which one is better – EDI versus API?

What is an EDI?

An Electronic Data Interchange is exactly as the name implies – an electronic platform used to move data within a network. It’s a platform that electronically transfers important files or documents from one computer to another. It facilitates the transition from physically mailing financial or shipping records such as billing invoices, order forms, and many other sensitive documents.

The EDI solution depends on advanced technology and algorithms to connect shippers, manufacturers, carriers, vendors and the fulfillment centers they work with.

EDI has found a home in the logistics industry due to its simplicity, customization, and ease of integration. 

What is an API?

While EDIs are intended to provide a highway for information to travel, and API adds an express lane to the network.

Application Program Interface solutions are built with computer code that is clear, structured, and simplified. It makes it easier for the SaaS to connect with other networks and applications.

Contrary to popular belief, API’s are not new. In fact, it’s a solution that has been used in the global supply chain and other industries for decades. The best example of a platform built on API technology are social media sites. The technology is flexible enough for a growing business to develop its network, and scale as needed. 

As the EDI is a network-based solution, the API streams connectivity to the cloud. This flexibility is a major reason why several supply chain businesses opt for API over EDI.

Solutions API and EDI Improve

The primary objective of both is to save time with the transfer of electronic files. This helps to expedite order entries, pay invoices, and provide a safe electronic record of transactions. It’s not at the level of cryptocurrency AI solutions, but both API and EDI are quite capable of accomplishing these tasks. 

These solutions are also intended to automate common tasks. 

Some of the popular solutions that API and EDI technology helps to improve includes:

Connect supply chain partners

The API and EDI technology is used to connect partners within the supply chain. Their mode of transportation, however, is much different. The EDI requires a physical network on both ends, while the API can be accessed from multiple devices with a single internet connection.

Improve payment gateways and processes

Both solutions can be used to process invoices, order products, or set up freight movement. However, like the above example, the EDI requires similar hardware and software to be installed in computers to accomplish this task – while the API is cloud-based. 

Reduce administration duties

When supply chain partners are connected through a network, many of the common administration duties of the past are eliminated or seriously reduced. 

Final Thoughts

There are other solutions that can be improved with the use of API or EDI technology such as improving supply chain optimization, inventory management, order processing, and customer communication. 

Like any other technology solution, the key to picking the right platform breaks down to several criteria. At the root of most decisions is money or the affordability of the solution, training, implementation and more. 

One of the best resources for supply chain businesses to rely on is a professional third-party logistics company like Redwood Logistics. Here at Redwood, we have a record of serving multiple industries, company types, and sizes of organizations. This flexibility gives us a wide range of experience with guiding customers to the right SaaS for their capacity, needs, and of course, budget.  

If you’re looking for a high-quality software solution – whether it’s powered through EDI or API, contact Redwood Logistics for the guidance you need to make an informed and wise decision.