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APIs in the Business Supply Chain: Why Are They Replacing EDIs?

four people discussing APIs in business supply chain

Over the last few years, supply chains have been switching from EDI (electronic data interchange) to APIs. EDI systems, a technology introduced more than 50 years ago to support communication with business partners, will eventually lead to mass disruptions in supply chains that rely on them way too much. 

The solution? As with many tech problems, APIs are the answer. Using APIs in the business supply chain can help fix the issue.

APIs can dramatically improve connectivity in supply chains, but that’s not the only reason why they are replacing EDI. The cherry on top is the fact that it does wonders for the large-scale visibility of any enterprise while generating strategic value for the supply chain in question.

Let’s take a look at all this, shall we?

Why EDIs Just Aren’t Cutting It Anymore

Once upon a time, EDIs were all the rage when it came to supply chain logistics. It was seen as reliable and got the job done, so there was no need to look for alternatives. Even today, a majority of B2B communications are done through electronic data interchange. 

However, for any kind of business that operates online, the rise of concepts such as Omnichannel 2.0 and on-demand delivery puts pressure on all channels. The increased complexity of present-day B2B ecosystems requires a more sophisticated kind of connectivity. There is a need to connect stakeholders, provide real-time data, and maintain security throughout, which is essentially where APIs thrive.

Also, older formats of EDI were unable to neutralize issues caused by dirty data; and incorrect and outdated data can be disastrous for the supply chain. Switching over to APIs is a simpler and more reliable option, especially with the recent trends of maxing out your API potential with correct optimizations and an improved understanding of APIs as a whole.

Moreover, the current interest in APIs makes it ideal for API-utilized supply chain optimization. The maturing and circulation of artificial intelligence and machine learning, wide-ranging global application development, increased financial pressure, and the era of digital transformation makes APIs the perfect candidate for the supply chain.

What APIs Can Do For Supply Chains

APIs allow everything from inventory details to the location of a particular shipment on a truck to the status of payment can be accessed in real-time. This transparency over the system allows different parts of the chain to swiftly take necessary steps to keep the supply chain running smoothly even during periods of disruption. And the cumulative data over time allows stakeholders in shaping enterprise strategies going forward. 

APIs can also be used to link a business’s ERP system with those of their suppliers, carriers, third-party partners. This will let them combine inventory and location data with weather, transportation status, etc., and simplify transportation logistics, making things much more efficient for the enterprise.

Last but not the least, APIs enable connecting digital ecosystems and technologies that enhance connectivity and improve overall business performance. Incorporating APIs into your business can make it easier to develop and scale, optimize the allocation of investments, and avoid multiple technical liabilities. Besides, APIs make your system better equipped to adapt to countless external accelerators that make it more agile and scalable. In other words, it will elevate your business as a whole.

Wrapping Up

It is impossible to argue that this is the age of the APIs. At the moment, supply chains everywhere need them more than ever as businesses are on the lookout for speed, flexibility, and scalability. While it is unlikely that APIs in the business supply chain will completely replace EDIs in the near future, businesses that use API-enabled supply chains will have a competitive edge over the ones that don’t. And as a result, more and more enterprises are reaping the benefits of API-led integration, as well as the microservices that platforms like MuleSoft provides.

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