For years, interaction between participants in a supply chain has been based on electronic data interchange, or EDI, ensuring that all participants are using a common language to enable communication between otherwise-incompatible systems. 

EDI, was a precursor to the modern digital era, connecting otherwise-standalone systems and often running on proprietary, dedicated networks. But while it’s still commonly in use thanks to its ubiquity, EDI has been surpassed by application programming interface (API) technologies that underpin the modern digital economy.

One analogy is that EDI-based supply chains involve participants using interpreters to communicate via a common language that is native to none of them, while API-based supply chains are the equivalent of participants teaching each other important phrases in their native languages and communicating directly without intermediaries.

APIs are something you use every day without even realizing it. They underpin common user interactions like Google Maps in a smartphone app, a third-party shopping cart on a small retailer’s website or “Siri, what song is this?” They’re a powerful tool for increasing the utilization of existing applications and solutions by opening and connecting them in a controlled and defined manner to other data, applications or users.

In supply chain, APIs replace the back-and-forth translation of EDI with direct connections between enterprise systems to empower real-time, seamless interactions between participants. They also empower innovation, as most EDI implementations are based on third-party standards that change slowly and through consensus. APIs, however, can be modified to take advantage of opportunities or changing environments on a one-to-one basis.

Obviously, there are challenges that accompany a shift to an API-based supply chain rather than one that is EDI-centric. Security is a key concern for organizations opening up the capability to interact directly with their systems, and API architects and developers need to be trained and certified on appropriate API frameworks and design patterns to ensure secure application development. There are also a variety of tools and platforms for API deployment and choosing the right fit for your needs will avoid challenges down the road.

If you’re interested in a real-time discussion about how your supply chain can become even more efficient and effective through API integration, visit our manufacturing integration website and contact us directly to set one up.