Automating business transactions proves its worth in new report published by supply chain standards organisation, GS1 UK
Automating business transactions proves its worth in new report published by supply chain standards organisation, GS1 UK
A major new report released today by the not-for-profit supply chain standards organisation, GS1 UK, has revealed that UK grocery retailers and suppliers automating their business transactions using electronic data interchange (EDI) technology are saving £650 million a year from costs associated with manual, paper-based processes.
GS1 UK’s ‘EDI Cost Savings’ report highlights that approximately 27 million orders are made in the UK grocery sector every year, with 84% of orders by retailers and 87% of invoices transacted using EDI technology today. Although there has been significant progress in its use for order and invoice transactions, only 38% of orders use electronic despatch advices.
Urging on EDI dispatch
The organisation said the grocery sector could potentially save a further £200 million by introducing EDI for all despatch advices. The report identifies cost savings of £14 per individual order, £8.50 per invoice issued and £12 per despatch advice sent if EDI is used instead of manual, paper-based processes.
The GS1 UK report also discovered that the adoption rate of EDI outside of the grocery sector was particularly low, with only 27% of suppliers using some form of the EDI technology to improve business transactions. By automating business processes GS1 said they would be able to reap the benefits seen by the grocery sector, such as faster transactions, enhanced data accuracy, improved operational efficiencies, lower costs and reduced paper consumption.
Increasing supply sustainability
“EDI is a major element of creating a sustainable supply chain. It reduces errors, time and paper giving cost benefits and “green” benefits for all. Every organisation should explore how this well developed technology can be exploited further,” said Professor Richard Wilding, Professor of Supply Chain Risk Management at Cranfield School of Management.
GS1 UK chief executive, Gary Lynch, added: “This report highlights again, the importance of implementing simple EDI technology for basic business processes such as orders and invoices which, in a tough and volatile economic climate, helps businesses reduce costs, speed up the order to cash cycle and improve trading relationships”.
