EDI Application In Various

Fields
International Trade
• Electronic Data Interchange (EDI) plays a essential role in the realm of
international trade, offering a suite of applications that streamline and
enhance various processes.
• The paper-based information exchange is problematic in international
trade. Vast amount of time and cost is required to exchange and check the
information in paper-based documents.
• Thus EDI is required to make the process automatic and at the same time it
makes the information exchange process faster and cheaper, which makes
the overall business faster.
• Here are some key application used in International Trade.
Order processing
Customs documentation
Inventory management
Collaboration across trading partners
Financial sector
• EDI is the automated exchange of business documents electronically. The
main purpose of EDI in financial sector is to streamlines financial
transactions, reducing manual efforts and errors.
• Benefits for financial institutions
 Cost savings: Reduce paper and manual processing costs.
 Speed: Accelerates transaction processing, improving cash flows.
 Accuracy: Minimizes errors, enhances data integrity.
• Importance in Finance
Efficiency: Accelerates payment cycles and improves data accuracy
Documents: Handles invoices, purchase orders, and remittance
advices.
Health care/ Insurance
• Claim processing
 Automation: Accelerates claims processing, reducing manual handling.
 Accuracy: Enhances accuracy in claims data, minimizing errors.
• Patient information exchange
 Efficiency: streamlines sharing of patient data between healthcare
providers and insurance companies.
• Billing and payment
 Automated Invoicing: Facilitates automated billing process for
healthcare services.
 Transaction Security: Ensures secure electronic transactions for
payments.
Manufacturing/ Retail Procurement
(Purchasing)
• In manufacturing, Electronic Data Interchange (EDI) supports the Just-in-
Time (JIT) concept, streamlining material requirement planning. JIT
production calculates daily material needs based on schedules, transmitting
orders to suppliers in real-time. This minimizes excess stock, optimizing
cash flow as companies only pay for parts in use.
• In retailing, EDI facilitates Quick Response (QR), improving customer
service and ensuring a diverse range of services. Retailers and suppliers
can adapt swiftly to market demands, gaining a competitive edge. EDI's
role in JIT manufacturing and QR in retailing highlights its significance in
modern business practices, offering efficiency, cost reduction, and market
responsiveness.
Automobile Sector
In automobile sector, EDI is used to keep customers updated with the
current product and pricing information during the purchase cycle. An
advance shipping notice is transmitted through EDI to the customers to
prepare a loading schedule and to ensure proper receipt of the product. The
customer may also make payment on receipt of goods via EDI to speed up
the payment process.