API vs EDI: Why You Need Both for Integration

Key insights:

Complementary technologies: API and EDI are not competing methods; they are complementary tools used together to build a seamless supply chain ecosystem.
EDI strengths: Established for over 40 years, EDI is the global standard for secure, high-volume document exchange (orders/invoices) and typically allows for faster implementation through data mapping.
API strengths: APIs provide real-time data exchange and instant responses, making them ideal for live inventory updates, web app integrations, and shipping requests.
The hybrid workflow: Modern integrations (like those with Cin7, Unleashed, or Zoho) often use APIs to pull/push data into internal systems while using EDI (via SFTP or AS2) to communicate with external trading partners.

API and EDI are complementary supply chain integration methods

Both EDI and API are used to transfer data from one system to another. They are often compared in conversation as completely separate methods, but the reality is they are used together collectively as complementary methods for integrating systems. For example, Crossfire can both create or leverage off pre-existing system API's to establish an EDI between two or more systems, with the goal of building an ecosystem of systems and processes.

Integration with EDI

Electronic Data Interchange (EDI) is a process where orders, invoices, and other business transactions are passed electronically between business systems. It requires a specialised system to manage this process, and the expertise to keep it going.

Benefits of EDI

EDI is well established and has been used for over 40 years
EDI typically doesn’t require software development, simply the mapping of data between certain fields and applying certain rules
EDI implementations are typically faster than API integrations

Disadvantages of EDI

EDI requires configuration at both ends, both parties must configure their systems to send messages to each other.
EDI transmissions do not receive real-time responses, so if a message fails, then a separate message will be sent in reply indicating the failure. The reason for failures can sometimes be less specific than API integration.

Integration with API

Application Programming Interface (API) is a connection between computers that allows applications to send information between each other. API’s do not require specialised systems (unlike EDI) to establish the connection, meaning human intervention is limited while using API.

Benefits of API

API allows for the real-time exchange of data, allowing faster response times to mitigate any issues and make accurate projections about the organisation’s data.
API’s have a variety of innovative features such as the integration of web applications and the ability to act as a messenger e.g. companies can automatically add pickup requests within seconds.
API offers simplicity, allowing users to collect data without the need for customisation.

Disadvantages of API

API is a relatively new software when compared to EDI. Many organisations will still use EDI and will not want to transition to API, thus, affecting partnerships.
API is more prone to security issues than EDI.
API does not yet have established messaging standards and may not be suitable for more sensitive or bulk data transmissions.

What is actually involved?

Many Crossfire customers use systems such as Cin7 Core, Unleashed and Zoho to manage their inventory. To enable data to flow in and out of these systems when data is being exchanged between trading partners, these different systems have developed API's to allow specified data to pass through.

To pull/push data in and out of these systems, an integration solution provider such as Crossfire has to develop a way to enable certain messages to pass through transports (such as FTP and AS2). Calls to the systems API's will need to be developed and once these are set up it allows for EDI to take place.

Here is an example of how it works

Say you are selling dog toys to a retail trading partner and use Cin7 Core to manage your stock and order processing.

A Purchase Order will be created by the retailer which may come in an X12 or EDIFACT format.
Crossfire will pick this Purchase Order message up from an SFTP or AS2 connection and pass this through the Crossfire EDI engine, translating the data from the retailers X12 or EDIFACT format into DEAR Inventory format.
Crossfire will then push this into the DEAR Inventory system by utilising the pre-established API.
Voila! You'll be able to see an order directly in your DEAR Inventory system, all thanks to utilising API and EDI together.

Frequently asked questions

The main difference is that EDI is a batch-oriented standard for secure document exchange, while API is a real-time connection for instant data interaction. EDI is essential for meeting the strict compliance requirements of large retailers and has established messaging standards like X12 and EDIFACT. APIs offer superior speed and simplicity for connecting cloud-based software, but they lack the universal messaging standards found in EDI. For a world-class supply chain, businesses typically use both EDI for external partner compliance and APIs for internal system connectivity.

They are complementary. While they are often discussed as separate methods, modern supply chain integration frequently uses both. For example, an integration specialist can use a system's pre-existing API to establish an EDI connection between two different businesses, allowing for a seamless "ecosystem" where data flows automatically between disparate platforms.

A common example is a retailer sending a Purchase Order in a standard EDI format (like EDIFACT). An integration engine picks up that message, translates the data into a format your specific inventory system understands, and then uses that system's API to "push" the order directly into your dashboard. This hybrid approach ensures you can trade with partners using traditional standards while maintaining a modern, automated internal workflow.