EDI helps to reduce communication time and improves accuracy of information exchange. EDI facilitates open communication and thus promotes teamwork and cooperative supported work. Improved communication leads to smooth material flow and hence reduced production cost. Reduced communication time improves customer response time and, therefore, improves customer satisfaction. Improved customer satisfaction leads to better financial results.It is not the replacement of paper-based communications by electronic media that provides the major strategic advantages of EDI.

The direct benefits include reduced transaction costs, improved cash flow, reduced inventory levels, and enhanced information quality.

EDI helps to reduce communication time and improves accuracy of information exchange. EDI facilitates open communication and thus promotes teamwork and cooperative supported work. Improved communication leads to smooth material flow and hence reduced production cost. Reduced communication time improves customer response time and, therefore, improves customer satisfaction. Improved customer satisfaction leads to better financial results.It is not the replacement of paper-based communications by electronic media that provides the major strategic advantages of EDI. Generation of a paper document on a form by software application. Delivery of a few copies of document to the internal dept to be filed and others to the trade partners via postal service. Retyping the document received by the trading partner on the form into their computers which may offer introduce errors. Generation of a paper acknowledgement and sending it to the originating company. Generation of a file containing the processed document by the application program. Conversion of the document into agreed standard format. Electronic transmission of the file containing the document over the network , which may link the originating company and its trading partner. Automatic generation of the receipt and its delivery over the network to the originating company.

**BENEFITS OF ELECTRONIC DATA INTERCHANGE** It document re-keying It Eliminate Paper Work It Reduce Lead Times and Stockholding It Increase quality of the trading relationship It gives a Competitive Edge. Thanks