How API/EDI Benefits the Supply Chain

Startup Fortune

Information exchanges are the backbone of any successful business, but this isn’t just limited to emails and phone calls made between customers, clients, and business representatives. Digital data exchanges are just as important as human interaction.

Two of the biggest drivers behind data communication are application programming interface (API) and electronic data interchange (EDI). The use of EDI dates back to the 1960s, and the technology was first developed to be used by the U.S. transportation industry as a way to standardized electronic data transfer between vendors and customers. 

In today’s digital world, API and EDI have replaced the data exchange that was traditionally conducted using paper documents. Both API and EDI are used in a variety of industries. In fact, according to an article in Data Interchange, in 2017, as many as 59% of businesses used EDI capabilities as a way to streamline how software components interact in order to share data.

One of the biggest business operations that API/EDI solutions are used to improve is the supply chain. Here’s how API and EDI technology has transformed how businesses manage this vital business operation.

Improved Inventory Management

Did you know that around 46% of small businesses don’t track inventory at all, or they use a manual method? If you’re one of them, now is the time to learn how API and EDI solutions can be used as a way to better manage your inventory and stock levels.

By using APIs and EDIs, it’s much easier for companies to maintain optimal inventory levels. With an API/EDI solution, the days of manual counting and paper spreadsheets are of the past. You also don’t have to worry about guessing and making approximations when it comes to expected sales.

Using an API/EDI solution will enable you to avoid product shortages as well as the risk of overstocking inventory that simply isn’t moving off the shelves. With API or EDI, the technology will be able to:

  • Monitor the status of items at all times
  • Identify which products are selling the fastest and slowest
  • Alert you when stock levels are low

Having a properly managed inventory is extremely good for your brand, as customers can count on your business to always have the items they need, when they need them, which is a huge boost to customer satisfaction. There’s nothing worse for a business than being out of a stock of a top selling product, as customers are likely to take their business elsewhere.


When conducted the traditional way, internal management processes, such as generating and storing transactions as well as creating invoices and receipts can be cumbersome. They require human interaction and involvement, which poses the risk of human error as well as slower processing times. 

The benefit of using API/EDI is that these processes can be automated, which streamlines invoices and orders as well as dispatch notices without the need for any human involvement. This not only reduces the risk of human error, it also ensures a fast and accurate process, which boils down to cost savings.

While you don’t want to automate your workforce out of a job, by adding automation to your business’ supply chain, you can allow employees to focus on other important tasks that require hands-on work.

Access to Real-Time Data

Businesses and customers alike want to know the status of transactions. For businesses, it’s important to know where an item is within the supply chain process, while customers want to know whether their item has shipped and when it is scheduled to be delivered.

With API/EDIs, it’s much easier to meet ever-changing customer expectations and needs, as well as internal business needs to track the status of orders through every step of the supply chain. By moving to a demand-driven data model, companies and customers will have real-time access to the data that they care about the most.

With real-time data, companies can make smarter decisions when it comes to inventory management, marketing, and even customer experience. By enhancing customer service and providing precise routing calculations, businesses can better manage and improve their reputations.

Improved Accuracy

Accuracy is vital in maintaining your business’ reputation, profits, and overall customer satisfaction. Imagine the amount of money businesses lose because of lost paperwork or poor timing that delays processing time. 

Without the use of API/EDI solutions, businesses face a higher risk of:

  • Data loss
  • Human error
  • Data mishandling
  • Re-keying errors

By using API/EDIs, all of these issues can be completely eliminated. With an automated and digital document flow versus one that relies on paper copies and wet signatures, data can be transmitted much faster and without the risk of error.

Cost Savings

There’s a reason why so many businesses have turned to email, digital marketing, and other web-based processes: cost savings! The fact is that paper driven processes are not only time consuming and more prone to being inefficient, they’re also quite expensive. The cost of printing, postage, document retrieval, filing, and reproduction all add up – quickly!

By sending digital invoices or allowing customers to track their order through a web-based system, you’re able to save money on supply and materials. This not only leaves more room in your budget, but it helps to meet the needs and expectations of many of today’s customers.

At the same time, reducing the number of paper-based processes not only saves money, but it’s also an eco-friendly effort that reduces your business’ carbon footprint. More now than ever before, consumers care about how green companies are!

The Future of API/EDIs

While EDIs have served businesses well for decades, APIs are the face of the future of digital data sharing. APIs will eventually completely replaced EDIs, as they are often much faster and more efficient when compared to EDIs. With APIs, businesses of all shapes and sizes can enjoy the many benefits of data-driven supply chains with the addition of a new layer of connectivity. APIs offer a centralized location to store and view data, which in turn allows businesses to make informed, data-driven decisions.

With the growing popularity of APIs used in consumer technology, now is the time to get on board!


APIs and EDIs are vital tools for business operations and problem-solving. When it comes to the supply chain, using an API/EDI solution offers a host of benefits, including access to real-time data, improved inventory management, and the ability to make data-driven decisions, which can result in time and cost savings.

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