Supply chains are complex ecosystems with many participants and technology systems involved. In this interconnected environment, integration means a lot, as it lets centralized and synchronized information come from all the stakeholders. When it comes to supply chain integration, there are two known technologies that provide it: API vs. EDI.
API vs. EDI: what’s the difference?
What is an API?
API stands for Application Programming Interface and provides a link between different software systems through defined intercommunication of its interface. Through APIs, a business can connect its technology to any third-party software. It is a cost-efficient and reliable way to integrate multiple software systems without the need to develop internal tools.
APIs are extensively used in many industries, not just in the supply chain. In fact, around 25% of all B2B interactions are handled through APIs. While APIs are more modern and technologically advanced, the industry still uses EDIs in many scenarios due to cost or resource considerations. The function of both is essentially the same, yet there is still a heated debate over these two options. Despite the statement about EDIs ‘death’, it is still deeply rooted in the supply chain industry. With all the capabilities of APIs, they are still not a magic fix to all integration issues.
What is EDI?
EDI stands for Electronic Data Interchange and is an older version of integration software. First utilized in the 1970s, EDI has become the basis for data transference between technology systems in supply chains. With technology progress, EDIs became less capable in comparison to APIs, which worked faster. However, many carriers and corporations are still hesitant to change their EDIs because of a variety of reasons, like low budget, troubles with development and implementation, etc.
API vs EDI: What is better for the supply chain?
Both API and EDI act as data exchange mechanisms. Over the last few years, EDIs became largely outdated and started to be gradually replaced by APIs, which better serve the modern requirements of supply chains. While APIs are more advanced, it doesn’t mean EDIs are erased from the supply chain environment. What’s more, not all APIs are answers to integration issues. Development and adoption of APIs is a long road, there is a lot of different APIs, with many of them lacking quality and construction. It is not enough to just use APIs; it is critical to use choose sophisticated solutions that will bring ROI, not implementation burden.
At PLS Logistics, we understand that the industry is using both tools, so we work with companies and carriers that rely either on APIs or EDIs. Check out our TMS solutions!