What is an electronic data interchange (EDI)?

EDI (Electronic Data Interchange) is the automated, computer-to-computer exchange of standard business documents between trading partners in a structured, machine-readable format. In the context of fulfillment and supply chain management, EDI replaces manual communication methods—such as email, fax, or paper—with a standardized digital protocol. This allows different computer systems (e.g., a retailer's ERP and a 3PL's WMS) to "talk" to one another instantly.