How to Automate Trade Document Processing for Increased Efficiency and Accuracy

Digitization vs. Digitalization

It is essential to distinguish between digitization and digitalization. Both involve moving something from the physical world to the digital realm, but there is a key difference. Digitization refers to the process of converting analog information into digital format, whereas digitalization involves transforming business processes to fully utilize the capabilities of digital technology.

The electronic components industry is still early in its digitalization process, particularly regarding trade document processing. Much of this process today is manual. The days of exchanging paper via snail mail or faxes are long gone, but PDFs may be digital, and they are far from something that can be used to digitalize a process.

EDI has been the dominant method of completing industry transactions for decades. EDI has been successful because of its strict adherence to rules and early-mover advantage of being the first to digitize industry transactions. Despite all these advantages, it is still a document-based method with significant overhead. EDI is a great starting point and has largely digitized trade document exchanges.

Orbweaver, with its innovative approach, has built on that, digitalized the trade document exchanges, and transformed the process to new levels of efficiency, giving you the confidence that your trade document processing can be optimized.

Opportunities for Efficiency Gains Through Automation

Current trade document processing practices require highly specialized skill sets from those handling the process. It is necessary to have detailed knowledge of the underlying transmission standards.

It’s a process with a single point of failure where significant data can be lost or fall over entirely if one element is missing. There is often a mapping or translation step between the system of record and the trade document. Many companies offer services to facilitate this, but it usually clutters what is already a busy tech stack without much overall gain in the process’s throughput. There is also the process of establishing and maintaining multiple data exchange protocols.

The trade document exchange process is still human. As such, it requires careful attention, or errors could significantly disrupt its smooth operation.

One example that we frequently encounter is the manual processing of order PDFs. The data is digitized, but when a person has to swivel-chair and copy-paste from a PDF into a system of record, that PDF is little better than paper. And it certainly leaves a lot of room for speed increases. Trading one bottleneck for a larger one is an improvement, but more is needed. Sometimes, it is necessary to think about the whole process differently.

Implementing Trade Document Processing Automation

Regardless of which side of the transaction you’re on, trade document processing happens in three general steps:

1. Preparation of Documents — The step when trade data is gathered from internal systems and documents are created.
   
2. Transmission of Documents — Sending documents out to partners via secure methods.
   
3. Retrieving Responses — When the downstream partner sends a response to the documents received.

Each of these steps presents a potential opportunity for automation, and Orbweaver has extensive experience in implementing such solutions.

1. Preparation

Trade documents are rich in data and information. The information contained therein often comes from many internal systems. Assembling the trade documents is frequently a two-step process of gathering and compiling the data in the correct format.

For example, an EDI 850 contains information from ERP, CRM, and financial systems and must be sent in a specific format. The preparation step can be automated by connecting to those systems via API or loading their data and using a transformation step to assemble the necessary EDI document. That sounds simple, but it is not uncommon that each trading partner has nuances in their EDI format.

Orbweaver has pre-built transforms to assemble EDI for all the major suppliers and distributors. This way, if you don’t inherently “speak” EDI (or whatever method your partner uses), Orbweaver can translate for you.

2. Transmission

Once documents are prepared, they must get to where they are going. There are many methods to send documents: SFTP, S3, or AS2, to name a few. File-based methods have adequate throughput. Even so, major industry players are moving to API-based transactions. In this case, the need for files largely disappears, and all transactions occur near real-time.

Automation is still possible when one partner requires API and the other still uses EDI. Orbweaver specializes in rapidly deploying APIs that use documents as the underlying data.

3. Retrieval

Data can automatically be read from its destination location. At this point, another transformation is initiated to extract the data from the file. In the case of EDI, the files are read, and data is extracted to be sent to other systems. The loading can be done via an API or by generating another file.

Conclusion

Implementing automation in trade document processing can bring about significant improvements. It enhances efficiency, accuracy, and security, thereby reducing operational costs. As global trade continues to grow in complexity, the role of automation in managing trade documents becomes increasingly vital.

Orbweaver, for instance, facilitates the processing of over 1,000 trade documents daily, showcasing the potential scale of automation. If you’re interested in bringing this level of efficiency to your business, just click here to get started and learn how Orbweaver can bring trade document processing automation—and all of the benefits above—to your business.