While the pandemic's shock to healthcare supply chains is mostly debated in terms of delayed and indirect costs, COVID-19's impact on digital megatrends is also hard to overlook. Although the talk about market failures and other global supply chain affects may be more interesting, the fact that COVID-19 revealed an industry that still relies on too much manual processing and remains mired in outdated workflows is a positive outcome.
For example, during the early days of COVID-19 testing, clinical technicians were forced to fax results to providers. Providers were then obliged to manually enter those results before they could be logged, and patients could be notified. Without accurate inventories of care critical assets, and in many cases not even knowing their location, revealed yet another problem. In this case, the value of real-time demand forecasts with current product availability status received the attention vendors have been chasing for more than a decade. And finally, high profile supply interruptions and lingering shortages have reinforced our collective need for real-time supply-side visibility.
What is Electronic Data Interchange?
Electronic Data Interchange, better known as EDI, is the computer-to-computer transmission of business data in a standard format. But EDI is not just a method for sending purchase orders to selected vendors more rapidly. COVID-19-inspired current thinking regards it as a business-continuity and risk mitigation methodology that could be utilized in every hospital department. Put simply, with the right EDI system, you can automate the exchange of business-critical data with most anyone for any purpose.
But let's be real. Although many health systems have implemented some level of EDI, the applications are mostly limited to transaction processing. They include, but are not limited to the exchange of:
- Purchase orders
- Order Acknowledgements
- Advanced shipping notices
- Sales orders
- Inventory documents
- Payment documents
- Shipping status documents
- Functional acknowledgments
Regardless of how obviously critical EDI is to supply chain visibility and resiliency, few health systems have fully automated or integrated their existing trading partner network. In other words, despite knowing that effective integrations encompassing external trading partners and internal supply chain systems guarantees processing accuracy, speed, and a real-time view across trading networks, most health systems find their implementations incomplete. "Although EDI has been around for years, it hasn't been fully advantaged," said Michael Deluca, VP Operations at Prodigo Solutions. "And unfortunately, the situation remains unchecked. It seems like the digital transformation focus has shifted from solutions that drive compliance to nice-to-have but unnecessary feature enhancements. In other words, new bells and whistles are trumping solutions that fully integrate essential capabilities."
EDI integration relies on good data and a relentless implementation focus. Otherwise, EDI will never integrate effectively with internal systems nor deliver on its promise. Today, the right EDI solutions are designed to integrate seamlessly into ERP systems. In fact, in many industries, ERP systems often come with EDI capabilities. The benefits include:
- Data Synchronization: Rather than wait for a paper fax to arrive, a business can simply log into their ERP system to retrieve the same details.
- Improved Supply Chain Visibility: With your EDI and ERP systems in sync, orders can be processed more quickly, lead times can be shortened, order-to-cash cycles can be accelerated, and trading partner onboarding processes can be streamlined.
- More Effective Communications: Staff can facilitate seamless data exchange both internally and externally. In fact, virtually all paper-based activities can be dramatically reduced. More data can be shared with trading partners because the process can and should be automated.
While EDI itself may be considered a commodity, EDI integration and/or automation is anything but. Your EDI vendor selection should be considered in a broader supply chain context, because EDI is not only a data-driven value proposition, but like other deeply embedded, high-use systems, it benefits from highly tailored implementations.
EDI Managed as a Continuous Integration Process
Outdated EDI data management is an expensive, complex exercise mired in the limits of siloed information. Without immediate access to accurate data, the processing of hundreds of thousands of purchase orders is a messy business. It's an error prone resource drain, with EDI teams reporting that they spend more than half their time manually searching through data, working through exceptions, and responding to information requests.
The right EDI solution allows healthcare supply chain professionals to be proactive when it comes to increasing service levels, monitoring trends, managing priorities, and building transparency. An automated solution provides a uniquely actionable view of clinical capacity empowering faster insights and better supply-based decisions. It allows challenges to be addressed as they happen, instead of post-mortems spent on determining root causes.
When EDI is effectively integrated, data transactions are automated and commerce becomes frictionless. Supply chain users can access, search and view their EDI data as intuitive business documents, track the timelines of transactions, be notified proactively if there is a problem or delay so they can resolve exceptions while in motion. Onboarding your trading partner network is a lift, but the short-term business case is easily cost-justified, and it's clearly a wise long-term investment. Importantly, when your EDI and supply chain data providers are integrated and/or one in the same, then the long sought after digital transformation of supply chain is a practical, realistic objective.
To read more about EDI and how Prodigo Solutions’ Xchange platform provides EDI transaction control, supplier connectivity, and visibility, and has been shaped to improve the value proposition for healthcare providers, access this related article: A proven EDI solution for healthcare supply chain… there is another option.
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A proven EDI solution for healthcare supply chain… there is another option