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Five advantages of EDI in the Healthcare Industry

Already complicated and increasingly global, Healthcare supply chain processes have long had to contend with disruptive forces. Both the COVID-19 pandemic and transportation delays have put further pressure on the industry which further cripple the need for critical medical supplies.


  • Despite a modest drop in delay times since December 2021 (from 37 to 27 days), transportation times are still 440% longer than they were before the pandemic
  • The volume of medical supply containers awaiting delivery has increased 13% in the last three months. Approximately 9,000 to 14,000 containers remain delayed.
  • As West Coast ports remain congested, the volume of medical supply containers at East Coast ports has skyrocketed. The ports of New York (+124%) and Charleston (+84%) seeing the greatest increase in container volume of medical supplies.
  • When surveyed about the trend in transportation delays, 61% of medical distributors have seen no appreciable improvement, while 21% say delays have worsened.


In large part due to these and other supply chain challenges, gaining a competitive advantage within the industry has continued to require supply chain optimization and the ability to adapt to evolving industry trends. Having already served the healthcare industry for thirty years, Electronic Data Interchange (EDI) can help to make that possible.


The digital exchange of documents across entire healthcare supply networks enables the up-to-date, flexible responses necessary for both recovery and survival. In this article, we consider the advantages of implementing EDI in the health care industry at a time when process improvements have arguably never been more important.


#1: Reduce errors

EDI’s ability to digitize and automate the exchange of documents significantly reduces the risk of human error that comes with paper-based processes. Even across extensive supply networks, this can result in increased accuracy that leads to faster customer-facing deliveries, despite ongoing delays in other areas.


Just-in-time (JIT) inventories that rely on the punctual coming together of components are especially reliant on last-minute processes that, should errors arise, can prove catastrophic for suppliers and trade relationships.  EDI is therefore fundamental for delivery, reliability, and efficiency.


#2: Enhanced visibility

By standardizing and digitizing the exchange of information, EDI can enhance the visibility that was so severely lacking for many health care entities during the height of the pandemic, thus enabling the JIT processes and competitive timeframes that are making transparency a priority for the healthcare industry.


Central views of all supplier processes could have prevented production losses of around 12.5% throughout the pandemic, with the simplified tracking of all SKUs offering operational benefits that include:

  • Increased speed
  • Agile processes
  • Data-driven decisions


#3: Improved supply chain communication and relationships

EDI’s ability to streamline two-way communication anywhere in the world enables the optimization and simplification of transparent, mutually beneficial trade partnerships. Particularly in the face of ongoing delays, direct communications in real-time enable suppliers to continue meeting each other’s expectations through a flexible approach that addresses issues as they arise.



#4: Cut costs

Cost savings that emerge from a reduction in spending on materials associated with paper-based documents (e.g. paper, ink, storage, etc.) by as much as one third is another enormous benefit of using EDI.

The removal of costly manual errors through complete digitization furthers these profitability advantages, not only providing traders with a more viable chance at financial recovery, but also increasing the potential for spending in other increasingly costly areas.



#5: Better stock management

The tracking of inventory numbers and general order processing figures makes EDI a key component in effective stock management processes, and therefore has the potential to prevent future SKU shortages.


These management improvements can also simplify lean inventories by enabling suppliers to handle fewer parts while still achieving the same output. Given that most parts in JIT business cycles arrive just hours or days before they’re needed, easily manageable and transparent stock processes play a crucial role in the fundamental foundations of positive supplier relationships, and their inherent benefits.



Moving forward, the ability to exceed partner and consumer expectations through efficient, visible EDI processes will help to maintain and increase profitability. This, in return, can enable increased spending on other areas providing a much-needed head start on delivery of healthcare services that can ultimately translate into saved lives.


EDI-as-a-Service: A modern solution for the healthcare industry

EDI has long been a central aspect of healthcare success, but, as suppliers who struggled through the pandemic learnt the hard way, legacy limitations, such as convoluted onboarding, are at risk of worsening global supply chain complexities.


Modern challenges need a modern EDI solution, and at Effective Data, we offer precisely that in the form of what we call ED Connect. This new approach to EDI utilizes both on-demand managed services and cloud-based tools to ensure the flexible approach needed in the modern healthcare landscape.


EDI-as-a-Service serves to enhance the advantages already discussed thanks to benefits that include:


  • Removing barriers to EDI adoption: EDI-as-a-Service enables the seamless accommodation of wide-ranging standards and protocols that cuts traditional adoption times significantly. The ability to onboard even unversed business partners quickly provides a competitive advantage.
  • Enhancing visibility: Single source, immediate access to all supply documents significantly enhances visibility across entire supply networks, which, as discussed, stands to enhance both JIT processes and efficiency drives in the face of global trade.
  • Enabling flexibility: Managed support ensures the flexibility necessary to keep solutions adaptable to ever-changing healthcare landscapes, thereby ensuring ongoing efficiency despite delays, as well as enabling the real-time implementation of cutting-edge solutions


To learn more about how you can take advantage of Effective Data’s ED Connect solutions,please reach out to our account team for assistance.

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