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API and EDI are complimentary 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 complimentary 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 specialized 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 DEAR, Unleashed, TradeGecko 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 DEAR Inventory 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.