The ERP is the system of record for most supply chain data: customers, suppliers, items, prices, orders, receipts and invoices. Purchase orders are created there, customer orders are entered there, and accounts payable and receivable are settled there. Common ERP functions include general ledger, procurement, sales order management, inventory, warehousing and production planning.
Integrating the ERP with trading partners lets documents flow in and out without manual entry. Outbound, the ERP produces purchase orders, ship notices and invoices that are translated into each trading partner’s format. Inbound, orders, acknowledgments and invoices from trading partners are translated into the ERP’s own structure through EDI mapping.
The risk is that bad data goes straight in. An order for a discontinued item, a wrong price or an unknown ship-to location can create errors that are hard to unwind inside the ERP. ERPs are also hard to change, so building every trading partner’s requirements directly into one slows upgrades and migrations. Many companies keep a separate B2B integration layer between the ERP and trading partners for this reason.