Welcome to the first in a series of blogs where we will briefly describe the history of EDI in several different industries. In this first one, we will discuss the history and evolution of EDI in healthcare. Everyone knows about the Health Insurance Portability and Accountability Act (HIPAA) but what many don't know is that in 1991, the Workgroup for Electronic Data Interchange (WEDI) was formed as an answer to the Bush Administration's concern for rising healthcare costs. Essentially, WEDI paved the way for HIPAA to become a reality and many of HIPAA's provisions are based on the recommendations of WEDI. So in 1996, everything changed in the healthcare industry when President Clinton signed HIPAA into law. Before HIPAA, there were over 400 different medical forms used in the healthcare industry. While EDI implementation had been attempted in various manifestations (i.e. WEDI), HIPAA actually mandated it.
This is the time of year, before the holiday bustle really begins, that we can reflect on what we're grateful for. This is what Thanksgiving is all about. And whether you are grateful that you have the day off or that your kids are now sleeping until 7:30 am on a regular basis (mine are not), everyone can find something to be grateful for. The next several weeks make up a significant portion of our retail customers' annual sales and we are grateful for the opportunity to support them through this important time of the year. So in the spirit of thankfulness, we thought it would be fun (and useful) to list five reasons to be grateful for EDI integration. Feel free to add to this list via comments. Comments on our blog are always welcome!
Sometimes I will spend weeks talking with a lead only to have them call me, heaving a sigh of relief because their customer decided to give them a stay of execution. They do not have to be EDI capable after all. First of all, it makes me sad because well, I just lost a sale. But I am also fearful for these companies because clearly they do not really understand the value-add that being EDI capable can bring. I actually came across a company recently still doing their accounting by hand! Hard to believe, I know...but it's true. An organization must be willing to change in order to grow and resistance to change is the biggest obstacle in becoming EDI capable.
So how important is EDI in the supply chain? In my opinion, the supply chain would come to a screaming halt and the results would seriously affect our economy if EDI were to cease to function. The EDI supply chain starts when a Purchase Order is generated and sent to a supplier and/or manufacturer. I can remember being a receptionist for a small after-market auto parts company when I was college and one of my jobs was to check the FAX machine for orders. We won't say what year this was! These orders would then be manually entered into the computer for processing. This went on all day long. Now...EDI has automated the supply chain to the point that FAX machines are literally collecting dust. Does anyone use the 10-key part of their keyboard anymore? And what happened to those file storage rooms where paid invoices went to die? There's no doubt that the words EDI & supply chain go hand in hand.
In many, if not most, supply chain EDI relationships, one of the required documents is the Advance Ship Notice. The EDI 856 Advance Ship Notice is what is sent in response to the EDI 850 Purchase Order. If YOUR EDI relationship includes the 856, there is a good chance that you are using the UCC 128 label. UCC 128 labels, or now known as the GS1 128 label, allow your customer to scan the label's bar code and find out what the contents of the carton are before opening it.
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There are many benefits associated with implementing EDI. Of course, the biggest incentive for doing EDI quite often is that you have a potential customer, sometimes a big one, who is asking for it. But what many companies fail to see is that the benefits of EDI far exceed customer mandates and that EDI can greatly improve and streamline your business processes.
Guest blogging today for the Aurora EDI Alliance is Nathan Camp from Liaison Technologies.
In the 4 years that I have been in this industry, I have seen a steady increase in companies moving toward EDI outsourcing. What are the benefits of hosted EDI? What are the potential pitfalls? And when does EDI outsourcing make sense? I will attempt to answer these questions with a brief review of this growing trend.
Measuring ROI for EDI is no easy feat and there are no hard and fast rules. With so many variables, all too often EDI solutions end up with so much duct tape, companies forget why they implemented EDI in the first place. It's easy to say, "Well, how much do I want this customer's business?" Because for many companies, this is the bottom line. The problem with this attitude is that it's reactionary. Instead, figure out just HOW BIG of a return on EDI investment is possible in the long term and set yourself up for maximum dividends. Read on...