The purpose of this assignment is to research about Electronic data interchange and needs to discuss about development, advantages and disadvantages and future of EDI (electronic data interchange)
.0 Introduction
The purpose of this assignment is to research about Electronic data interchange and needs to discuss about development, advantages and disadvantages and future of EDI (electronic data interchange)
Electronic data interchange refers to exchange of business information between computer systems by network such as Internet etc. In modern days increasingly competitive, fast-paced business environment, electronic supply chain management is an area of intense focus, as leading companies everywhere strive to work more efficiently with their suppliers. Although traditional electronic data interchange (EDI) is well established in certain industries, in many sectors it has been extremely difficult to get a high level of supplier compliance, because of the expense and problems associated with EDI implementation (1)
As I see today's business environment, I would like to say electronic data interchange is crucial components because business environment requires organisations to participate in the drive towards electronic business. (1)
Electronic data interchange is a component, which exchanges structured data, sent in a form that allows for automatic processing with no manual intervention between two computers or two companies (1)
The use of translation software means that EDI can take place with no restrictions on the hardware and software and it enables firms to be linked with one another in the most cost effective way (1)
Electronic data interchange works by providing a collection of standard message formats and element dictionary in a simple way for businesses to exchange data via any electronic messaging service. (2)
EDI: Electronic Data Interchange is the computer-to-computer exchange of business documents in a standardized format. Standard formats ensure that different companies can exchange business data without having to modify their computer systems. For pure EDI, "computer-to-computer" means "original-application-program to processing-application-program". (3)
It is a kind of technique to exchange commercially oriented data in a structured electronic format. (4)
An example of EDI,
Company 1 buys widgets from company 2. In a non-IDE environment, company 1s purchasing system prints a purchase order, which is posted or faxed to company 2. Someone at company 2 manually enters the P.O. into an order entry system. The order is processed, the item(s) shipped, and 2's accounts receivable system prints an invoice. The invoice is mailed to 1, where it is manually entered into 1's accounts payable for processing. Multiply this by hundreds or thousands of orders and a significant amount of printing, mailing and manual entry takes place. (5)
2.0 Definition of Electronic data interchange (EDI)
EDI is the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. Electronic data interchange describes a sequence of messages between two parties, either of whom may save as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media. (6)
EDI's messages are usual received by computer. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of on-line data processing. (6)
2.1 Components of EDI
Electronic data interchange is not dependent on any specific computer hardware, software, communications protocol, and processing environment because EDI architecture is generic but it needs that trading partners agree upon a common set of standards and communication the information to each other. The components of an EDI system include: (7)
* EDI standards
* Application systems
* EDI Gateway
* Communication Network (7)
2.2.1 EDI Standards
The success of EDI is based on the existence of standards that govern the way that data is transmitted from one trading partner to another. These standards openly define the way paper-based documents should be structured into electronic messages. In addition, the standards define the contents of each message and provide a limited list of codes that can be used to describe individual entries within a message. EDI message standards developed and maintained by the American national standards institute. (7)
2.3 Application systems
Application systems are the computer application systems, which are used in an organization. That are used to maintain and processing these systems are also used to process the data to be sent to or received from trading partners. (7)
2.4 EDI Gateway
EDI gateway converts application system data into a standard format and it also does send messages to and receive messages from trading partners. A typical EDI gateway consists of a hardware platform and EDI translation software. (7)
2.4.1 Hardware: Requires a host system (e.g. a personal computer, med range computer or mainframe computer) and communications equipment (e.g. modems and communications lines.) (7)
2.4.2 EDI Translation software: specialised software required by each trading partner that performs three basic functions, which are as follows (7)
. Mapping: it does reformat outgoing data from an organisation specific file format to a standard EDI format for electronic processing and it also reformats incoming data from a standard EDI format to an organisation-specific file format that can be processed by the business application systems. (7)
2. Translating: adds standard enveloping and delimiter protocols to the mapped data to permit the EDI message to be routed properly to the designated trading partner (7)
2.5 Communication: the process that sends an EDI message to a trading partner via a communication network (A communication network is used to transmit standard business documents between trading partners. Every communication network is used by a number of business entities. It is often linked to other networks to enable them to transfer EDI messages to each other) (7)
EDI Translation Software
We have a number of varying degrees of software packages. These help companies to implement EDI. Electronic data interchange basically comes in two variations, which are stand-alone and fully integrated EDI application. (8)
Stand- alone packages are rather like fax machines: when they receive incoming IDE documents, they can print them out on paper and uses it as user would if the documents were mailed or faxed. Stand-alone packages have data entry front-ends so a user can manually enter dater into the package, which will then translate what was entered in to an EDI document for transmission to the trading partner (8)
Software which facilitates integration, Referred to as integrated EDI software, which are the ECS/EDI processor. ECS/EDI processor will take an incoming EDI document and translate it into an application interface file, which can then be processed by application software. It will also take a file generated by application software and translate it into the appropriate EDI document for transmission to trading partners. (8)
The better the integrated EDI software, the more control a user has over the layout of the application interface files being used to transport data between your applications and the EDI software. (8)
3.0 The basic steps of EDI
The sending an electronic data needs a series of steps on the part of the sending and receiving partners. After you have defined all of the building blocks of EDI message, most of these steps will either be automated or proceduralzed (9)
Basic Steps of EDI:
. Document Preparation
2. Outbound Translation
3. Outbound Communication
4. Modem
5. Inbound Communication
6. Inbound Translation (9)
I. The Sender
The sender of any EDI document should consider on three main steps
. First, the information for the electronic document must be prepared.
2. Then the document must be translated into a standard format.
3. Finally, the document must be transmitted to the receiver. (9)
3.1 Document Preparation. The first step in any series of Electronic Data Interchange is the collection and organization of data. Such as, you need to print a purchase order, instead the system creates an electronic file with the necessary information to build an electronic document. The sources of data and the methods available to generate the electronic documents are as varied as there are businesses and applications. They can include: (9)
. Human data entry via screens.
2. Transcribing data into a software translation ...
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3. Finally, the document must be transmitted to the receiver. (9)
3.1 Document Preparation. The first step in any series of Electronic Data Interchange is the collection and organization of data. Such as, you need to print a purchase order, instead the system creates an electronic file with the necessary information to build an electronic document. The sources of data and the methods available to generate the electronic documents are as varied as there are businesses and applications. They can include: (9)
. Human data entry via screens.
2. Transcribing data into a software translation product.
3. Exporting PC-based data from spreadsheets or databases.
4. Reformatting electronic reports into data files.
5. Enhancing existing applications to automatically create output files specifically for translation into an EDI standard.
6. Purchasing application software that has built-in interfaces for EDI output files. (9)
4. Outbound Translation. The next step is to translate this electronic file into a standard format using the appropriate segments and data elements. Specialized "translation" software "maps" the data from the electronic purchase order file into the message format required by the purchase order message.
Translation software is available to suit just about any computing environment and budget, from large mainframe systems that handle thousands of transactions daily to PC packages that need only process a few hundred transactions a week.
Outbound. The sender's computer will connect to a Value Added Network
Communication or VAN. The file is transmitted to the electronic version of an "out" box. Upon successful receipt, the VAN will process and route the transaction to the electronic mailbox of the receiver.(9)
II. The Receiver
The receiver of the EDI document should consider these three stops.
. The first step is to retrieve the document from the sender.
2. Then the document must be translated from the standard format into data that the receiver's systems can use.
3. Finally, the translated file is applied to the receiver's application database.
3.3 Inbound Communication. The receivers computer connects with the VAN. The receivers receive any files waiting in its electronic "in" box. The computer stores the file where it will be accessible to the receivers translation software. (9)
3.4 Inbound Translation The receiver's translation software will reverse the process that the sender went through by "mapping" or translating the file from the standard PO message format into a format that the receiver's internal system can understand. This process will strip out any data in the file used for routing or control purposes. (9)
Processing Electronic Documents. The receiver's internal customer orders processing system processes the newly received and translated purchase orders. As with document preparation, a variety of options for processing the translated file are available. A significant addition to the transfer of an electronic document is the confirmation. When the transaction is successfully processed by the receiver a functional acknowledgment is sent to advise the sender that the file has been successfully received. (9)
4.0 Basic concepts EDI
* Application to application
> Refers to the transmission of data between each trading partners business applications
* Machine processable
> The exchange of data requires minimal human intervention
* Business documents
> The data exchanged between trading partners will consist of industry specific documentation such as, invoices, loan report information, etc.
* Standards based
> The data is translated to a standard format to ensure a clean exchange between both trading partners applications (10)
5.0 Standards of EDI
* Standards bodies dictate the form that EDI data will take
> American National Standards Institute (ANSI) - National Standards Organization
==> Accredited Standards Committee X12, ASC X12 - ANSI Subcommittee for EDI
* Various industries have developed ASC X12 standard transaction sets to dictate how they exchange data relevant to their unique business rules (11)
5.0 Electronic data interchange covering
Electronic data interchange is transactions in a computer-processable format, covering such traditional applications as inquiries. Such as (12)
* Planning
* Purchasing
* Acknowledgment
* Pricing
* Order status
* Scheduling
* Test results,
* Shipping and receiving
* Invoices
* Payments
* Financial reporting
* Education information
In addition standards cover interchange of data relating to security, administrative data, trading partner information, specifications, contracts, production data and distribution and sales activities. (12)
6.0 EDI improves speed
Replacing a paper invoice with an electronic one will provide several benefits. it will not take place and will be safe. But then you need to change the way you do business because when you change your paper system with electronic, of course it will be difference. (13)
After you changed the way you do business because you changed paper system into electronic system. Your system works well. You can reduce costs (time is money) (13)
While computers has automated or smooth many internal processes, in the businesses the external processes of exchanging information with customers and suppliers (or client) still lag far behind the internal procedures. The need for speed and accuracy in these external processes is becoming ever more significant. (13)
Speed, whether in the increased velocity of moving products from design to the market place, or in the rapid response of a supplier to customer demands, is vital to success. Increased speed can benefit a business in several ways: (13)
* Shorten lead times for product enhancement or new product delivery. The market advantage of months or even weeks can have a major impact on profitability. (13)
* Do more with less. Staff reductions, commonplace in many businesses, require that fewer people accomplish more work. Handling exchange of data electronically may be critical to survival, giving employees the tools to be more productive while reducing overhead. (13)
* Reduced delivery cycle tunes mean reduced lead times and lowered inventory carrying costs. (13)
Increases in speed are often difficult to attain because of the need to avoid transcription errors. As speed increases, so does the probability of error. Advantages gained by increases in velocity may be easily offset by the high cost of error correction. There are several obvious cost savings that will result from increased accuracy of information transferred to suppliers and customers.(13)
* Increased customer satisfaction.
* Reduced overhead required either to detect or to reprocess erroneous documents.
* Reduced costs to expedite goods or services that are late or lost (13)
7.0 EDI improves Accuracy
Correctness of data in the exchange of business documents is extremely important. The usual paper document that exchange between two environments (two partners) would have an error. Using EDI you can reduce errors. EDI will also provide specific and measurable increases in the speed of document transfer, with accompanying decreases in document cycle time. (14)
. Sending an electronic message across the country or around the world requires only seconds or minutes as opposed to days. Such transmissions typically occur at over 1000 characters per second. (14)
2. Data is available immediately for use in internal applications. Data, once received, needs only to be translated internally into the specific format required by the receiver's application software, and it is ready for use. (14)
3. Reduced business cycle times provide a competitive edge in any business. (14)
Electronic transfer of data eliminates the need for copying data from one paper document to another, or for keying the data into a business application screen. Every time data is transferred, there is opportunity for error. In the typical manual purchase order, a person enters or copies information from the paper form. At least once. With EDI, improved accuracy is obtained in several different ways: (14)
. Electronic data is usually derived from a database, where data has been subject to prior validation. (14)
2. Electronic documents are transferred accurately regardless of size. If transmission of a large document is not successful, users can invoke re-transmission procedures rapidly. (14)
Even if several different parties process the electronic document, with each party adding data to the existing document, none has the ability to alter previously entered information. (14)
8.0 History of EDI
* The concept and technology have been around since the late 1960s.
* Edi is being implemented throughout the mortgage banking industry and is used by both Fannie Mae and Freddie Mac.
* Recently EDI has begun to gain more popularity. The World Wide Web and the Internet ar4e shaping the future of EDI. (15)
Organisations have exchange data on paper before. Many organisations have been forced to seek a more expedient way to communicate and process business data. Computers are used for commercial business applications and the introduction of techniques for computer telecommunications enabled the solution. Near the beginning electronic interchanges used between two trading partners. (16)
Some industry wanted to create industry EDI standards. In the 1960s, some industry groups cooperated to develop industry EDI standards for purchasing, transportation, and financial applications. Many of these standards held on only intra industry trading but others, such as bills of lading and cargo invoices were appropriate across industries. At last the idea of national standards for use across industries received substantial support. Use of EDI will never reach its possible without standards. I can say that it would not be possible to implement worldwide transfer of business fact using different data formats for every business. (16)
You can increase speed and accuracy of the system by using EDI's standard used in internal systems linked with customers and suppliers. (16)
"By using EDI's standard electronic language used in internal systems linked with customers' and suppliers ' systems, we can dramatically increase speed and accuracy." According this I can say EDI is about the group of data that in an electronic form, from one machine to another machine (between two trading partners) (16)
To allow different trading partners to work together it is necessary to define a consistent format for the data that is to be moved, and allow that format to be used by
everyone without regard to the type of business they undertake (whether they are bankers, insurance agents, manufacturers, retailers etc.). (16)
The most important development to-date has been the creation of EDIFACT (Electronic Data interchange for Administration, Commerce and Transportation - or Trade). This single standard has emerged as being the only true multi-industry/multi-national standard that is being embraced throughout the world reducing and simplifying paper based trading, advancing the use of information technology throughout the trading cycle and developing and promoting paperless trading or, EDI as it is more commonly known. (16)
9.0 Types of EDI processing
EDI processing messages are generally divided into three main categories which are batch, fast batch, and interactive. Each one has differentiated processing by their expected turnaround times, which is the time between a request transaction and its corresponding reply transaction. (17)
* Batch processing is measured in days
* Fast batch processing in minutes
* Interactive processing in seconds (17)
Each processing type can also be differentiated based on the number of transactions in the message or file such as a follows (17)
* Batch processing having the most transactions
* Fast batch processing having an intermediate number
* Interactive processing having one or only a few transactions (17)
As I understand, batch and fast batch processing have easy managing because the batches are run in sequence. Interactive processing has more difficult managing because transactions must be processed at the same time, as soon as they arrive. (17)
The communications used for transmitting batch and fast batch files usually consists of file transfer capabilities over facilities with significant delays, such as asynchronous dial-up connections or store-and-forward VANs. (170
Interactive messages cannot use these methods because the delays introduced are excessive. Typically, interactive processing uses TCP/IP socket communications, sometimes over leased lines or the Internet. For processing that takes place over the Internet, protocols such as HTTP and S/MIME supplement the underlying TCP/IP communication. Examples include EDIINT (EDI over the Internet) /AS1 and /AS2 where EDIINT/AS1 is based on S/MIME and EDIINT/AS2 is based on HTTP. (17)
0.0 Reason for supportable of EDI by Trading partners and system
It is depends, if you want to support EDI by the system and the trading partners then you need to consider lobbying your systems vendor and your suppliers. The larger subscription agents and book jobbers support EDI. Regional suppliers may not support it. Rowecom (Faxon) was the first subscription agent to support EDI (1990). (18)
1.0 Reason for saving time and money by EDI
There is still no logical reason to implement EDI. Unfortunately, without consulting those that have implemented EDI, you have little information on which to base a response. There are a few published papers on the efficacy of EDI in the library community, but not many. [That's a hint to library scientists out there.] So call your systems vendor and suppliers to get references. Example: One library that started EDI invoicing with us went from a three-week process of entering renewal invoices data to a couple of hours reviewing load results. Time previously spent on tedious data entry could be shifted to more important collection development work. Money savings with EDI is a calculation whose main component is labour, but should also include elimination of paper and postage costs for outgoing transactions. (18)
2.0 Cost of implementing
Answer of cost of implementing will vary by system. Some vendors bundle EDI capability into their base system price, others sell EDI as a separate module. Compare the ongoing work savings to the one-time cost, or ongoing license fee, for an EDI module. (18)
3.0 People can implement EDI
Most implementations will require lead-time for the preliminary exchange and entry of linking numbers between partner systems. Specifics on how to set up a library system for a particular transaction come from both the suppliers and the systems vendors. (18)
Such as, an EDI invoice transaction usually requires that the library set up order records, and sends their unique order numbers to their supplier. The supplier enters these library-assigned numbers to their system, and generates an EDI invoice that includes the numbers. EDI Claims require that an agent-assigned number for the same order be entered on the library systems, usually in a field associated with the check-in record. Sometimes, this agent-assigned number, (Rowecom Canada calls it a "Subscription ID"), can be automatically posted during the invoice load. (18)
4.0 Purpose of EDI
EDI is for exchanging trading information such as orders, delivery notices, invoices, remittance advice's, statements, and so on, on paper increasingly involves the re-keying of data. More key entry increases error and delays so driving up costs. (19)
The use of standard electronic messages means that can be controlled and instructions and can be also processed automatically. (19)
The speed and certainty that EDI brings to the supply chain can enable companies to concentrate on their core trading activities and provide the ability to respond to customer's demands more accurately and confidently than ever before (19)
Information can be transferred between companies with a combination of EDI and EAN?UCC bar codes - the standardised data sets mean there is no confusion for any of the trading partners and safe too. (19)
Using EDI companies can save a lot of time and money in both personnel and material costs. Because incoming orders, invoices etc, no longer they do not have to be entered in to a companys computer system manually, the labour cost of the data entry personnel is saved. Furthermore, there is no possibility of typing errors. For outgoing documents, all of the paper and paper handling costs associated with printing and mailing the documents are saved. There are costs associated with transmitting EDI documents, but these are small compared with the paper, paper handling and mailing costs. (20)
Just in time manufacturing systems, used in many auto assembly plants, it is cannot exist without EDI. The plants need to communicate manufacturing and shipping schedules to their suppliers daily, which is why automotive EDI suppliers are required to be EDI-capable by their automotive customers. (20)
Large retailers require their suppliers to be EDI-capable. These retailers rely on low inventory levels, and high inventory turnover, to save money. They also want to be able to respond quickly to demand or shortage situations. The type of quick communication required in this environment is not possible without EDI (20)
5.0 Information about Implementation of EDI
It is usually good to consider EDI implementation as a two-stage process, as it is important to differentiate between initial 'start-up' implementation and continuous maintenance and implementation. When initially setting up EDI there are a number of considerations, which are less important when the system is up and running. (21)
5.1 Firstly there are the initial implementation considerations:
* Standards selection
* Network selection
* Software selection (21)
5.2 Once the EDI facilities are in place there are numerous ongoing considerations.
* Data alignment - inter trading partners
* Message selection - depending on business requirements
* Hardware maintenance (21)
6.0 advantages and disadvantages of EDI (22)
6.1 Advantages of EDI
* Fewer pricing errors
* Reduced communication costs
* Faster and more certain supply chains
* Shorter lead times
* Lower stock holdings
* Reduced working capital
* Support for business process re-engineering. (22)
* EDI is highly safe (23)
* EDI offers speed
* EDI is reliable
* EDI provide you a better market position in relation to non-EDI competitors
* EDI makes it possible to enjoy
> One-time data entry
> Reduced errors
> On-line data storage
> Faster management reporting
> Automatic reconciliation (23)
6.2 Disadvantages of EDI (24)
* Too Many Standards
* Changing Standards
* EDI is Too Expensive
* Limit Your Trading Partners (24)
* Automation may come up short if too much data is entered (25)
* May be slightly costly to implement initially (25)
* Would require training of employees to use system
* Supplier must also have the same technology for system to work (25)
7.0 Benefits of Electronic data interchange
It is estimated that 100,000 organizations use EDI standards and enjoy many of the following benefits of EDI (26)
* Reduction of paperwork and associated savings
> One-time data entry
> Reduced errors, improved error detection
> On-line data storage
> Faster management reporting
> Automatic reconciliation
> Reduced clerical workload and phone chatter
> Higher productivity without increasing staff
* More timely communications
> Rapid exchange of business data
> Elimination of mail charges, courier services
* Better market position relative to non-EDI competitors (26)
8.0 Major benefits of EDI
* Administrative cost reduction.
* Marketing advantage over competitors who do not use EDI.
* Value added to products and services through more rapid and accurate information processing.
* Improved inventory control.
* Strategic integration of EDI data and information processing.
* Customer/supplier request.
* Quick access to information.
* Cost savings. (27)
* Accuracy of data.
* Reduction in errors.
* Competitive advantage gained from speedup of transactions and reduction of paperwork. (27)
9.0 Reason for using EDI
Electronic data interchange makes the most of the efficiency of exchanging documents (such as orders, invoices etc...) within your business organisation and across enterprise boundaries. EDI makes enable the application-to-application exchange of information removing the need for human intervention. (28)
Electronic data interchange can change the way your company does business without any major re-development to the architecture of your existing business application software. As a result companies are choosing EDI because they want to stay ahead in to days market and EDI also offers speedy transactions, accurate information exchange and cost savings. EDI helps your company to manage the system more effectively and supports initiatives like Just In Time (JIT) manufacturing and efficient consumer response. (ECR) (28)
9.1 More specific EDI benefits include:
* Reduced operating costs of communications, cutting paper and postage bills
* Time saved as there is no need to re-key information
* Reduced manual processing costs
* Improved accuracy of information and error reduction because there is no data re-entry involved
* End-to-end audit trails means that you can confirm that your documents have been delivered to your trading partner and track the movement of goods at each stage of the cycle. (29)
9.2 As a result, EDI improves customer service:
* Faster trading cycle means ECR
* Used in conjunction with automated stock replenishment systems, EDI will reduce lead times enabling stock to reduce as a consequence
* JIT Environments (EDI gives you the chance to streamline your supplies and manufacturing activities in order to gain the competitive edge within your industry)
* Improve trading relationships, strengthening your customer and supplier bonds. (29)
To summarise, EDI:
* Strengthens your market position. EDI is the means to securing the business of vital customers and furthermore can act as the marketing tool to win new business
* Provides the ability to respond to highly competitive new market entrants. The ability to do EDI is a clear trading advantage
* Means business survival. Some large companies make EDI a pre-requisite to doing business. (29)
20.0 Telecommunications of EDI
Environments can transmit their Genie Mae EDI loan reports vie many different telecommunications methods. Take a look as a follows (30)
* ISDN, which stands for integrated services digital network
* VAN, which stands for value added network
* BBS, which stands bulletin board system
* Web based (30)
Electronic Data Interchange Future Trends
People believe that EDI will be taken the Internet and other electronic commerce transactions to an entirely new level. It is clear electronic commerce transactions will allow you to connect unlimited numbers of suppliers and buyers without as much complicated as an Internet connection and a web browser. Companies will mange their entire business cycle more effectively by using the Internet transition, from purchasing to distribution to customer support. (31)
Some people believe that extended intranets are the future of EDI. They state, they prefer to link vital business partners directly to their private corporate networks rather than link to other business by EDI. The ability to conduct business transactions in this manner has many advantages. Companies are allowed to increased efficiencies in communications by intranets. (31)
People predict that new data interchange standards will need to be created to replace the complex X12 formats, which were originally designed for mainframe computers to converse with one another. The new IDE, which is named Electronic commerce transactions, will need to be more compatible with typical internet related standards such as HTML or E-mail. Other specialist also predicts that VAN and ISP providers will join forces to offer private sub networks that are Internet accessible. In fact, some companies, such as GEIS, already offer systems with such capabilities. (31)
It has been stated by some people that the Internet will be the death of EDI. William Schrader, Chairman, President/CEO and found of PSINet in Herndon, VA once stated that "EDI is dead in 24 months." People believe this was probably a self-serving statement to boost the public's reliance upon the Internet and, hopefully, ISP's like PSINet. It should also be noted that, while the exact date he uttered these words is unknown, it was at least 1997...over three years ago. People think that Lynda Radosevich, a freelance writer in New York, has put EDI and its predicted death into perspective and take a look for following quote. (31)
EDI is just the most recent addition to a venerable list of items that have outlived pundits' prophecies of imminent demise. Still kicking are... (31)
* Mainframes
* Ana log anything
* Text-based interfaces
* Wang Laboratories, Inc., Digital Equipment Corp. and Bull Electronics
* Commuting
* Human agents
* Live meetings
* Shrink-wrapped software
* Fax machines
* Paper (31)
The growths of EDI will undoubtly continue and many thousands of users are expected to take advantage of EDI in the coming years. EDI is becoming more and more an integral part of the business strategy of companies and is undoubtedly changing the way business is done. (32)
As the Internet expands in the marketplace, the lines become hazy between EDI and EC. EDI is a part of EC while EC covers a broader range of activities such as text messaging, internal and external communications, and Web-based applications. "The Internet is the future of EDI," says Geri Speiler, a research analyst at Gartner Group. Gartner believes that as the demand for Internet commerce increases so will the demand for EDI. (33)
21.0 Conclusion
After completing this assignment I have found out what EDI is for, what EDI is used for, what its major benefit of EDI, advantages and disadvantages of EDI and what EDI covers.
EDI stands for electronic data interchange, is the exchange of business documents in a standardized format between two computers. Different companies can exchange business data without having to two adjust their computer systems which is in short by standard formats. In simple terms we can say that EDI is the application-to-application transfer of business documents between computers. The transfer of files requires that the sender and receiver agree upon a standard document format for the document that is to be transmitted. EDI is a new way of doing business. Many businesses are looking to EDI as a new, fast, inexpensive, and safe method of sending purchase orders, invoices, shipping notices, receiving advices, and other frequently used business documents. For example, Auto manufacturers use EDI to transmit large, complex engineering designs. Multinational firms use EDI to communicate between locations. And universities use EDI to exchange transcripts quickly.
Using EDI (electronic data interchange) you can reduce errors, time and money. EDI will also provide specific and measurable increases in the speed of document transfer, with accompanying decreases in document cycle time. For example if you send a purchase order to other companies, it takes a lot of by post, needs money
And you might do some mistake by calculating or writing. If you do by EDI it would be safe and less error.
Orders, delivery notices, invoices, remittance advices, statements, and so on are trading informations, which are used for exchanging by EDI. Personnel and material costs can save a lot of time for companies, which use EDI. The labour cost of the data entry personnel is saved as the incoming orders, invoices etc, are no longer required to be saved in the company's computer systems manually.
The EDI can be used with telecommunications, which are ISDN, VAN, BBS and Web based. The major benefits of EDI are administrative cost reduction, marketing advantage over competitors who do not use EDI. It also improves inventory control and does quick access to information. Major benefits of EDI also included with Strategic integration of EDI data and information processing, customer/supplier request, cost savings, accuracy of data, Reduction in errors and
Competitive advantage gained from speedup of transactions and reduction of paperwork.
The advantages of EDI are save money, save time, improve customer service, end repetition and etc... for example
Save Money
The cost of paper and paper processing is incredibly high compared to a properly implemented EDI program. Processing a paper purchase order costs the company would be a lot of money. Processing an EDI purchase order reduces the cost to not as much as paper
End Repetition
If your trading partner wants a copy of a document, instead of calling you they simply check their mailbox. This results in a great timesaving from not having to copy and fax/mail copies of business documents.
Save Time
EDI also saves time over paper processing since the transfer of information from computer to computer is automatic.
Improve Customer Service
The quick transfer of business documents and marked decrease in errors allow you to do business faster and more efficient.
The disadvantages of EDI are too many standards, changing standards, EDI is too expensive and limit your trading partners
Too Many Standards
There are too many standards bodies developing standard documents formats for EDI. For example the company may be following the X12 standard format, while your trading partner follows the EDIFACT standard format.
Changing Standards
Each year, most standards bodies publish revisions to the standards. This poses a problem to EDI users. You may be using one version of the standard while your trading partners are still using older versions.
EDI is Too Expensive
Some companies are only doing business with others who use EDI. If a company wants to do business with these organizations, they have to implement an EDI program. This expense may be very costly for small companies.
Limit Your Trading Partners
Some large companies tend to stop doing business with companies who don't obey with EDI.
Electronic data interchange covers so many parts, which are as follows
* Planning
* Purchasing
* Acknowledgment
* Pricing
* Order status
* Scheduling
* Test results,
* Shipping and receiving
* Invoices
* Payments
* Financial reporting
* Education information
In addition standards cover interchange of data relating to security, administrative data, trading partner information, specifications, contracts, production data and distribution and sales activities.
References of web sites
. http://www.e-centre.org.uk/database/EDIAG
2. http://nces.ed.gov.edi/
3. http://www.firstsource-furniture.com/edi/page150.htm
4. http://www.state.oh.us/ecedi/odjfs/infoguide/introductionframe2.htm
5. http://www.state.oh.us/ecedi/odjfs/infoguide/introductionframe2.htm
6. http://www.itl.nist.gov/fipspubs/fip161-2.htm
7. http://www.state.oh.us/ecedi/odjfs/infoguide/introductionframe2.htm
8. http://www.ecslimited.plus.com/doc/ecsie/ecsie_edi_introduction.htm
9. http://www.unedifact.com/edi/edi_17.htm
0. http://www.ginniemae.gov/edi/edi101/sld007.htm
1. http://www.ginniemae.gov/edi/edi101/sld008.htm
2. http://nces.ed.gov/edi/EDI_explained.asp
3. http://www.unedifact.com/edi/edi_8.htm
4. http://www.unedifact.com/edi/edi_9.htm
5. http://www.ginniemae.gov/edi/edi101/sld004.htm
6. http://www.unedifact.com/edi/edi_6.htm
7. http://manuals.sybase.com/onlinebooks/group-edi/dig0400e/edi4fg/@Generic__BookTextView/4120
8. http://www.rowecom.ca/advantages/edi/edi3.htm
9. http://www.e-centre.org.uk/database/EDIAG
20. http://www.ecslimited.plus.com/doc/ecsie_edi_introduction.htm
21. http://www.e-centre.org.uk/database/EDIAG
22. http://nces.ed.gov/edi/EDI_explained.asp
23. http://www.edipostserv.com/subpages/what4.html
24. http://ksi.cpsc.ucalgary.ca/courses/547-95/seanh/edi.html#EDI_Defined
25. http://www.spcomm.uiuc.edu/Classes/FA01/396-2/IMPACT/edi.htm
26. http://nces.ed.gov/edi/EDI_explained.asp
27. http://www.unedifact.com/edi/edi_1.htm
28. http://www.ecslimited.plus.com/doc/ecsie/ecsie_edi_introduction.htm
29. http://www.ecslimited.plus.com/doc/ecsie/ecsie_edi_introduction.htm
30. http://www.ginniemae.gov/edi/edi101/sld009.htm
31. http://isds.bus.lsu.edu/cvoc/projects/techlibrary/EDI/future.html
32. http://ntrg.cs.tcd.ie/undergrad/4ba2/edi/futurebusiness.html
33. http://216.239.53.100/search?q=cache:uwNrBji8Vu0C:www.avicon.com/pdf/EDI-eCommerce.pdf+future+for+EDI&hl=en&ie=UTF-8#12
