Are you wondering if EDI or API is best for transferring your company’s data? Electronic data interchange and application programming interface are the two main ways by which you can share information electronically.
While they each play a vital role in communication, each is better for different supply chain applications. Find out the advantages of EDI vs API integration and how EDI and API are used in the supply chain.
What Is EDI?
EDI, or electronic data interchange, is a secure way for exchanging documents in a standard format between business partners or organizations. Inspired by developments in military logistics, EDI was first used in Flight Control Systems, like the London Airport Cargo EDP Scheme.
What Is EDI Best Suited For?
With a high level of security and complexity, EDI is most commonly used between trading partners and maintains communication standards. It’s also great for sending large batches of data system-to-system but is not as good for real-time exchange.
What Are the Different Types of EDI?
There are many different types of EDI, including Direct EDI, EDI via VAN, and EDI via AS2. Direct EDI or Point-to-Point EDI establishes a single direct connection between business partners for transferring data.
EDI via VAN (value-added network) uses a VAN service provider to connect you with your partners. EDI via AS2 uses the internet to transport dates in a secure AS2 envelope.
What Is an EDI Invoice?
Rather than sending a paper invoice to buyers, sellers can use a secure electronic version called an EDI invoice. One of the primary applications of EDI is electronic billing, which is more convenient and just as secure as traditional hard copies.
What Does API Mean?
API, or Application Programming Interface, is a dynamic software intermediary that allows two applications to communicate and exchange information. It was developed in the 90s, long after EDI, to communicate within computer networks.
Now, API powers everything from social media to booking flights. It’s even used for freight shipping API to streamline complex logistics processes.
What Is API Best Suited For?
As the newer, faster way of sending data, API simplifies data transmission by automatically updating as new information becomes available. This makes it great for sending instant messages, checking the weather, and participating in social media. However, since API is software that is dependent on internet connectivity, it’s not as secure as EDI, which can be a big issue when it comes to sensitive data.
What Are the Different Types of API?
There are four different types of API, public, partner, private and composite. Public APIs are open for use by outside businesses or developers and have moderate levels of authentication.
Partner APIs can only be accessed by authorized parties, either inside or outside of an organization. Private APIs or internal APIs are used within an organization for activities such as payroll. Finally, composite APIs are the most complicated, combining the different types to optimize related or interdependent operations.
What Are the Most Common APIs?
APIs are everywhere. Some of the most common APIs power websites like Google Maps, IBM Watson, Twitter, Dropbox, and Booking.
Comparing EDI & API in Supply Chain Logistics
Both EDI and API are used for the optimization of data transmission for supply chain logistics. However, each has a different call pattern, data size, onboarding implementation, security standards, and fees involved.
Call Pattern
EDI and API each use different call patterns to send information. For example, EDI uses an asynchronous call for batch exchange, while API uses a synchronous call for real-time exchange.
Data Size
One of the main benefits of EDI is that it’s capable of handling massive amounts of data. But on the other hand, API isn’t designed for use with mass data.
Onboarding Implementation
With EDI, it is easy to onboard new partners. Especially partners that are already connected to the provider’s network can be quickly and easily added. First, however, a data layer needs to be built for implementation with API.
Security Standards
As the trusted data transfer option for the past five decades, EDI offers a higher level of security than API. EDI also satisfies more compliance regulations for industries that deal with sensitive data.
Fees Involved
API tends to be cheaper than EDI since API is usually charged by the document while API is generally charged by the kilo-character. This means that the company using EDI is charged for every character or space in a document. API also typically requires less maintenance, and implementation can be less costly.
EDI and API in Supply Chain Logistics
As the two leading integration technologies, both EDI and API have their place in supply chain logistics. So next time you send an invoice, know that you’re probably using EDI. And when you instant message your colleague, that’s the API.
FAQ
Perhaps one day API will advance enough to replace EDI, but when it comes to highly sensitive information or large batch data transfers, EDI is still the way to go.
Yes, API data transfers can happen almost instantly as data is continuously uploaded. Meanwhile, EDI uses a secure intermediary, which slows down the process.
EDI still plays a vital role in business-to-business communications and will for the foreseeable future until API’s security improves.
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