The Role of EDI in Supply Chain Management

For decades, EDI (electronic data interchange) has connected suppliers, manufacturers, distributors and retailers around the world by providing a standardized, multi-industry format for data exchange. Even today, an estimated 85% of supply chain transactions are managed through EDI — a fact that soundly puts the common rumor that EDI is “dying out” to rest.

But while EDI isn’t going away, the technology is evolving to better meet the demands of the modern supply chain. Through integration and AI, electronic data interchange is able to go beyond simple point-to-point document transfers and integrate with the entire tech stack to fully automate supply chain management tasks.

Why Do Supply Chains Need EDI?

EDI is the common protocol for sharing information B2B (business-to-business). Depending on the information being exchanged — such as an invoice, purchase order, or ASN (advanced shipping notice) — an EDI system will automatically translate that information into a standardized format that ensures all parties receive consistent, accurate data.

In supply chains where even small disruptions can ripple through production and delivery, EDI is the “digital bridge” that lets data flow seamlessly between stakeholders, eliminating time-consuming paper transactions and reducing human error.

Common Supply Chain EDI Transactions

When it comes to supply chain management, the most common EDI transactions are:

There are more than 300 unique EDI transactions businesses can use to exchange data — explore the full list of EDI document types.

How EDI Optimizes Key Supply Chain Processes

Procurement

Procurement is one of the most document-intensive and time-sensitive areas of supply chain management. Yet PwC’s 2024 Global Digital Procurement Survey reported a procurement process digitalization rate of just 43%. That means the majority of companies are still relying on physical paperwork and manual data entry to manage transactional processes.

EDI streamlines procurement by replacing paper-based transactions with standardized electronic documents. These documents can be sent, received and processed in hours instead of days, dramatically speeding up approvals and order fulfillment. And when EDI is integrated with existing ERP systems, documents are updated in the ERP in real time, eliminating the need for manual data entry and providing a single source of truth.

Inventory Management

Inventory management depends on accurate information that can be communicated quickly and transparently. Without EDI, it often requires countless phone calls, back-and-forth emails, and manual stock level updates across spreadsheets.

An EDI system automates the exchange of inventory information by sending standardized electronic updates directly between suppliers and buyers, and — when integrated — updating ERP systems in real time. For example, EDI 846 (Inventory Inquiries/Advice) quickly and clearly communicates important details like inquiry date, product identifiers and inventory quantity so that teams can make more informed decisions about purchases and sales.

Order Fulfillment

In the fulfillment stage, EDI ensures that every detail — from product codes to delivery timelines — is transmitted instantly and without error. Warehouse orders, shipping notices and invoices flow seamlessly between partners, reducing delays and improving accuracy.

EDI integration also ensures that every department involved in the supply chain — from logistics to finance — sees the same data at the same time.

Benefits of EDI in Supply Chain Management

Improve Visibility

EDI provides end-to-end visibility across procurement, logistics and fulfillment. Teams can track order status, shipments and payments in real time, creating a single source of truth that supports faster and more confident decision-making.

Functional acknowledgements (EDI 977) can be used to further enhance visibility and prevent disputes, acting as a receipt to confirm that an EDI document was received successfully.

Automate Transactions

By automating document exchanges like purchase orders, invoices and shipping notices, EDI removes manual effort and reduces turnaround times. This streamlines communication, minimizes errors and allows teams to focus on strategic initiatives instead of routine tasks.

It also helps control costs. Large retailers and enterprises can process up to 10 million EDI transactions per day, which can add up quickly. Unlike many EDI vendors that charge per message, Jitterbit offers unlimited transactions and predictable pricing, eliminating billing surprises as your volume grows.

Strengthen Vendor Relationships

EDI fosters stronger vendor relationships by enabling consistent, reliable communication and ensuring both sides have the same up-to-date information at every stage of the transaction.

The Future of EDI in the Supply Chain

B2B Integration

One of the biggest challenges in modern supply chains is fragmented data. Trading partners often only see part of a transaction, while the full picture remains siloed across systems. This lack of transparency can slow decisions, increase errors and reduce overall efficiency.

The future of EDI is about bringing all these pieces together in a unified, scalable platform. Modern B2B integration solutions combine traditional EDI with APIs, ERP systems and other enterprise applications to create a single hub for managing data, workflows and transactions. This allows organizations to scale commerce across suppliers, partners and geographies while maintaining consistency and accuracy in real time. By connecting systems inside and outside the EDI network, businesses gain a clearer view of the supply chain, reduce manual intervention and can respond faster to changes in demand or disruptions.

EDI & AI

EDI systems are increasingly being infused with artificial intelligence (AI) to boost productivity and improve supply chain resilience. For example, generative AI embedded in EDI systems can be used to automatically generate document templates and validation rules based on existing data patterns, reducing the time and expertise required to onboard new trading partners.

Combining EDI with AI-driven insights provides opportunities to optimize workflows and enhance supply chain visibility. By identifying recurring errors and predicting potential delays, this helps teams make proactive, data-driven decisions.

Unlock End-to-End Supply Chain Automation with Jitterbit EDI

EDI has always been essential to global commerce, but its role is expanding as supply chains become more connected and data-driven.

Jitterbit combines EDI with API integration, automation, and AI — all within the unified, scalable Harmony platform. With Jitterbit EDI, you get:

• Access to 1,000+ pre-built trading partner connections
• 2.68 average months to EDI go-live
• A single dashboard to manage trading partners, integrations and B2B workflows
• Unlimited messages and predictable pricing — no surprises
• Seamless integration with legacy systems