API vs. EDI: How Does Each Help Supply Chain Management?

Technology June 22, 2021

An effective supply chain utilizes technological tools available to improve logistics. Two of these integral technological developments include API and EDI. 

Both of these technological solutions allow for a more efficient supply chain by securely exchanging data between systems. When deciding between which system to implement in your supply chain, it is important to understand the differences between the two. This will allow you to select one that better suits your business needs. 

McKenna Logistics helps to break down the difference between API and EDI below to help you understand the functionalities of the two. 

What is API? 

API is the acronym for Application Programming Interface and essentially acts as a connector between two different software systems. APIs are an efficient and effective way to integrate multiple software systems, allowing businesses to connect to third-party softwares. 

APIs are capable of sending data quickly, allowing for fast, accurate, and automated data updates. This is where you can begin to see its usefulness in supply chain management. 

Using APIs in supply chain management allows for businesses to send shipment or pickup requests automatically to the warehousing system. This significantly reduces the time that would be required to make manual placements and improves accuracy by removing more chances for human error. 

What is EDI? 

The EDI format is an older technology for integration softwares. EDI stands for Electronic Data Interchange and is a communication technology that allows for the exchange of data between systems. Although it is commonly replaced by API integration, EDIs are still favoured and used among many industries.

EDI uses standardized electronic formats to process data information. EDI is one of the safest ways to transfer information due to its programming that provides access to pre-authorized users and its use of audit trails. 

EDI further removes the intervention of humans, reducing chances for human error. It is an effective solution for companies that require sending large amounts of data in a single transfer.    

Do I choose API or EDI for my Supply Chain Management? 

Over time, APIs have been more commonly adopted than EDI due to their innovative features. API is the preferred choice if you are seeking a solution that can be integrated with web applications. 

EDI is a popular and traditional standard. EDI is favoured by those who prefer and prioritize the robust security and reliability that it offers. 

Consult with experts at McKenna Logistics 

Having an efficient supply chain is critical to a business’s success. If you are unsure about which technological tools to integrate into your supply chain, consult an expert at McKenna Logistics! With over 70 years of experience, McKenna is a team of dedicated logistics-consulting professionals you can rely on. 

If you have questions about our third-party logistics (3PL) services or our warehouse locations and options, contact us today to get a free quote