27/09/2010

By Scott Thompson

A new report from the not-for-profit supply chain standards and solutions organisation, GS1 UK, reveals that the leading UK grocery retailers and suppliers are at the forefront of automating their business transactions using Electronic Data Interchange (EDI) technology, saving £650 million a year worth of costs associated with manual, paper-based processes.

Approximately 27 million orders are made in the sector every year with 84 per cent of orders by retailers and 87 per cent of invoices transacted using EDI technology.

Although there has been significant progress in its use for order and invoice transactions, only 38 per cent of orders use electronic despatch advices. The grocery sector can 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 the technology is used instead of manual, paper-based processes.

The report also discovered that the adoption rate outside of the grocery sector is low, with only 27 per cent of suppliers using some form of the technology. “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,” says Professor Richard Wilding, Professor of Supply Chain Risk Management at Cranfield School of Management.

To download the full report, visit: www.gs1uk.org/EDI-report