What is an EDI Trading Partner and How to Make Sure You Have the Right Setup?

What is an EDI Trading Partner and how to make sure you have the right setup?

For most supply chain companies, EDI remains the most critical means for communicating with their business trading partners. As your business grows, it is imperative to have a flexible solution that enables you to optimize EDI supplier onboarding. 

According to a survey done by our partner Cleo nearly two-thirds (63%) of IT decision-makers say that the EDI onboarding process takes too long because of all the different customized requirements demanded by trading partners. Up to 47% of IT managers say that slow EDI supplier onboarding is currently keeping their businesses from capturing new revenue opportunities. 

Before we outline how to improve the EDI trading partner onboarding process, it is important to first ask what is EDI and why does stepping into a paperless world bring so many benefits? After that we can define what a Trading Partner is and how they can be setup correctly

What is an EDI Trading Partner?

An EDI trading partner refers to a business trading partner with whom you trade goods using electronic communication. This could be a supplier, a manufacturer, a transporter, or a partner in wholesale for example. Most supply chain companies will have a large network of trading partners and primarily communicate and trade using EDI standards. Now that we understand EDI trading partners, let’s examine the EDI trading partner setup. 

What is EDI Trading Partner Setup?

EDI trading partner setup is the process by which a company connects to a business trading partner via EDI. In order to start exchanging goods, there are a number of steps that must be taken in order to set up a connection to an (possible) EDI trading partner. 

You will need to configure the connection to either use particular incoming or outgoing mailbox paths.

For example, if you are a supplier, and a retailer wants to send you EDI documents, then you will need to create an incoming purchase order mailbox path.

And if you are the retailer, you will want to configure the opposite path. 

Other important details that are included in the EDI trading partner setup are:

• Trading Partner type
• Partner ID 
• Partner Name 
• Partner Vendor ID
• Branch ID

The exchange of all this information, and more, must be tested, validated, and approved before an EDI trading partner is officially set up.

Why is Streamlined EDI Trading Partner Setup Important?

Every single EDI trading partner is going to have different requirements when it comes to onboarding. Some may require EDI documents to be sent in specific increments or even within a set time window. Failing to meet those requirements in a timely fashion will result in the loss of new sales and missed revenue opportunities. That’s where our solutions come into place because it makes it easy for a company to stay EDI compliant. Trading partners are bound to have unique needs, and being able to accommodate those requirements is going to be fundamental for success.

So if you’re ready to onboard new or improve existing partner relationships and drive more revenue, contact us today!