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FREE online courses on ECOMMERCE FUNDAMENTALS - Electronic Data
Interchange - Implementing EDI |
EDI is beneficial when tied to strategic efforts, which
alter, not mirror previous practices. Fully integrating EDI into the
enterprise as a whole, rather than to individual applications, leads to new
approaches to familiar processes.
Investment in EDI requires a willingness to re-examine what
the organization does and ask how it can be more efficient and responsive. Reworking individual systems and fully integrating internal
processes and flows may be a prerequisite to an effective EDI program at the
enterprise level.
Integrating EDI transaction data into applications
potentially reduces manual effort, redundant data entry and handling errors.
Moreover, time, paper and postage are reduced compared to the paper systems.
Most organizations, however, find themselves forced to maintain some paper
capabilities since not all-external partners can adopt an EDI environment
immediately.
Some firms design EDI approaches to streamline supply chains
and spread these new practices to their vendors. Benefits, from a supplier's
perspective, may be realized in better forecasting information, closer customer
relations and reduced administrative overheads.
The customer's benefits are reduced inventory carrying
charges, low administrative overheads and more reliable information on the
status of the firm's supply chain. Some customers have found the benefits
sufficient enough to use accelerated payments as an inducement for their
supplier's community to become EDI capable. Partnering for success becomes the
primary focus between businesses at this level.
The number of suppliers to an EDI customer will diminish as
the customer assumes a more aggressive posture in terms of gaining benefit from
the practice. Given the effort and investment required to bring two
organizations' practices in line to fully support EDI, this is not a surprising
result. It is consistent with the general trend to reduce the vendor base in
order to simplify and improve the materials management process.
The success of EDI depends on
internal order in systems and processes followed by cooperation with external
partners. Internal and external systems and workflow must be simplified for
effective EDI. Applying EDI to an inefficient process results in the ability to
continue doing things wrong, only faster.
