EDI in the automotive

The automotive industry as an EDI power user

Hardly any other industry has perfected the use of EDI as much as the automotive industry. As one of the key industries in Germany, the automotive groups and their suppliers ensured early on in the past decades that processes along the entire supply chain were fully digitized with the help of EDI. Users from the automotive environment are therefore rightly referred to as EDI power users.

Without EDI you will hardly find connections in the automotive industry

The supply chain between suppliers and original equipment manufacturers (OEMs) is characterized by increasingly similar scenarios. Demand planning and production have to be coordinated, supply chains optimized, and order picking and invoicing carried out.

What is an OEM's demand for vehicle components in the next 52 weeks? Suppliers must align their production with the automaker's plans early on to avoid overproduction or delivery problems. However, given their many thousands of suppliers, manufacturers cannot and do not want to inform everyone manually about their requirements.

For these reasons, EDI is one of the access restrictions or criteria that a supplier in the automotive industry must fulfill. Via EDI software, manufacturers send demand figures so that suppliers can adjust their production precisely and automatically. Furthermore, EDI offers various advantages for the entire communication and delivery process.

EDI message flow in the automotive industry - example delivery bill & invoice

An example: Suppliers have to pick their goods, provide them with transport labels and ship them. When they do this, the OEM expects a timely and thus early announcement about the goods that will soon arrive, including the load carriers used and the exact sequence of the packages. Without the digital delivery notification, the goods will not be accepted or the order will only be processed for an additional fee.

This is where an automated and fully integrated EDI solution plays a major role. By using EDI software, picking can automatically trigger the creation of shipping notifications. Once the goods have arrived at the manufacturer, EDI can in turn be used to automatically create invoices and send them to the customer, minimizing the need for billing.

By using EDI, suppliers and manufacturers significantly reduce their costs. At the same time, suppliers strengthen collaboration with the use of the technology: Thanks to the digital process structures, they can rely on the contractual compliance of their partners at all times.