Increase Supplier EDI Compliance and Maximize Your EDI Investment

Compliance is a big word with even bigger implications, especially when it comes to managing supply chain operations. Have you ever considered how seamlessly your supply chain could operate if all your suppliers were fully integrated with Electronic Data Interchange (EDI)? By improving EDI compliance across your supplier network, you significantly increase the efficiency, accuracy, and reliability of your operations. This blog post discusses how to get more of your suppliers to reach EDI compliance and boost your supply chain's performance.

Understanding the importance of EDI compliance

Having suppliers agree to new or updated EDI policies is one of many challenges buying organizations can face when streamlining supply chain efforts. Buyers may require suppliers to begin exchanging EDI or update the business documents they already exchange via EDI for many reasons. Benefits of increasing supplier EDI compliance through onboarding initiatives include: 

• Reducing the cost of manually processing EDI documents
• Experiencing faster order processing and fulfillment 
• Creating cost savings for materials and resources
• Reducing the need for manual data entry and paperwork 
• Introducing more environmentally friendly business practices
  
  

Increasing supplier EDI compliance

When it comes to implementing EDI, compliance makes for a smooth and successful process. To help achieve higher compliance rates during onboarding, Edict Systems works with businesses to tailor messaging and expectations for suppliers. Below, we list helpful information to include in supplier communications to achieve higher compliance during onboarding initiatives. 

Details of Upcoming Changes

Clearly identifying upcoming changes helps suppliers understand the buying organization’s needs, whether in the form of a request or an EDI mandate. Providing details may reduce the number of questions and errors throughout the onboarding process or help identify which suppliers may be exempt or need to be moved to a separate initiative. 

Reasons for Changes

Get ahead of confusion, push back, or potential issues by addressing the “why” upfront. Reasons for changing a process include reducing the cost of manual labor for processing EDI documents, significant cost savings for resources, an overall reduction in the need for manual data entry, and introducing business practices that are more environmentally friendly. Buyers may find it helpful to include supplier benefits like reducing the number of chargebacks, speeding document exchange, and using less administrative resources.

Expectations

In order to have a successful supplier onboarding period, it is important to set clear expectations. When clear expectations are communicated with suppliers, buying organizations can achieve up to 80% EDI compliance. By communicating the importance of participation and the expectation of EDI compliance, businesses can expect higher success rates.

Onboarding Letters

An onboarding letter is a concise explanation of the expectations buying organizations set for their suppliers. Onboarding letters include background information, details and reasons for any changes in the EDI program, and how to comply with the changes. This information helps suppliers understand the goal and how to work with an internal team or EDI service provider to reach compliance. The more information onboarding letters include, the easier it is to communicate with suppliers throughout the onboarding process.

Tips for increasing supplier response

Use an EDI Mandate

Buying organizations that do not introduce an EDI mandate see compliance rates as low as 20%. To increase the number of suppliers exchanging EDI, businesses can use an EDI mandate with a clearly defined request urging suppliers to comply.

Introduce Penalties and Incentives 

Introducing penalties for non-compliant suppliers helps buyers manage supplier refusal. Suppliers unwilling to meet EDI requirements may be motivated to update their EDI practices to avoid issues. Using fees or penalties as a result of failing to comply helps communicate the importance of the EDI initiative. Suppliers are more likely to participate than risk paying high fees for missed deadlines. It may also be helpful to reward suppliers who consistently meet EDI standards. This approach creates a balanced motivation system that encourages adherence to established requirements. 

Set a Deadline

Establishing a clear deadline creates a sense of urgency. Together with communicating any fees and penalties, establishing a deadline helps businesses achieve up to 80% supplier participation. It is important to include deadlines that give suppliers adequate time to reach compliance, but that are not too far into the future. There are many ways to state a deadline in an onboarding letter. To avoid confusion, it is best to include a specific date like sixty (60) days from the date of the letter or including a specific date for deadlines.

Working with a trusted EDI provider

Despite the benefits, achieving EDI compliance has its challenges. Expanding and managing an EDI trading community can be a difficult, time consuming, and expensive task. Identifying solutions for common barriers like incompatible systems or outdated software helps more suppliers reach compliance.

Buying organizations benefit from working with a trusted EDI provider to help create an easier supplier onboarding experience. Edict Systems’ customized Supplier EDI and Onboarding services save buyers the time and valuable resources required to expand and manage their supply chain EDI operations. We work with some of the largest buying organizations in the world to develop successful programs that EDI-enable their suppliers to maximize EDI participation and their EDI investment. 

For suppliers, our EDI experts are well-versed in EDI processes and capable of addressing problems quickly and effectively. We help suppliers reach compliance with services like WebEDI, EDI integration, and testing and certification, designed to help suppliers reach compliance whether they have EDI experience or are just beginning. We manage suppliers from initial communications and EDI-enabling to ongoing support, whenever they need it.

Prioritizing EDI compliance unlocks numerous benefits that can transform your supply chain. Our goal is to help buyers maximize the number of EDI trading partners in their network so they can then focus on business initiatives with full confidence their supply chain EDI operations will keep pace. If you are ready to take the next step toward mastering EDI compliance, contact Edict Systems' onboarding experts to learn how our tailored programs can streamline your supply chain.

At Edict Systems, We do EDI so you don't have to^®. 

If you’re ready to take advantage of the value EDI can add to your business, contact the EDI experts at Edict Systems. We’ll assess your business needs and tailor a solution that’s right for you.