EDI

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Supply Chain Management is the management of interconnected businesses involved in procurement of goods and services required by the end customer.

Often EDI (Electronic data Interchange) supply chain work companies see the value of handling all master data electronically which helps them in eliminating data entry errors and verbal misunderstandings, since all the data is stored on the computer system, and so, it becomes easy to even find the data which was stored a number of years ago.

This concept is very widely used in retail stores in the malls and grocery stores. It helps in eliminating paper work to a large extent for big stores, since all the information is stored on the system for each and every item available in the particular store.

There are basically two aspects in Supply Chain, namely;

1)      Primary Aspect

      This includes:

i)                    Inbound Logistics

For this inventory management system is maintained to keep the track of inventory

ii)                  Operations

For this production control system is maintained

iii)                Outbound Logistics

For this also, inventory management system is maintained

2)      Secondary Aspects

It includes

i)                    Marketing

ii)                  Customer Service

E-commerce can be used almost everywhere.

For example:

When we go to a mall for shopping we get the billing done for the goods purchased. At the billing counter, a bar code reader is used by the billing person which gives him all the details about the product like the price, size, color etc which are printed on the bill and given to the customer- so, this involves the customer service aspect.

For the employees, it helps in knowing what amount of stock is left and when it needs to be reordered- thus, it involves the marketing aspect.

Hence, with the help of Electronic Data Interchange, a lot of paper work can be reduced, everything can be done and maintained online and it is also cheaper!!

To reduce/eliminate the use of paper in any organization, an intranet connection is made within the organization, wherein all the computers are connected to each other and any information that is to be exchanged in the organization; it is done with the help of intranet.

A VPN (Virtual Private Network) is also build in an organization where computers are connected to each other. It works as a tunnel, since it helps in transferring or sharing of information with the computers in the organization or with the peers and no outsider person can access it. In order to communicate with the customers and suppliers of the organization, an Extranet connection is build, but they are given a restricted access. So, an Extranet is a restricted access of Intranet which an organization shares with its environment.

Today, EDI, is being used in every field, be it banking, chemical industry, entertainment, grocery and food services, healthcare, information technology, insurance, manufacturing, publishing, transportation, telecom sector—almost everywhere!

      Even government agencies use EDI for international trade, customs and supplies.

There are certain standards which have been setup for EDI. Standards are used to create computer readable versions of the traditional documents.

The different standards which have been set are:

EDIFACT

Electronic Data Interchange For Administration, Commerce And Transportation was set up by UN.

Some of the subset of EDIFACT are:

EANCOM

Developed by European Article Numbering Association for producing International EDI standards

EDICON

Used by construction industry

EDIFICE

Used by electronic industry

Some other standards are (not included in EDIFACT):

ANSI X.12

Used for inter-industry EDI

GENCOD

VDA

TRADACONS

Used for UK retail

ODETTE

Supports Just In Time Methods

There are many benefits of EDI, since the data is exchanged electronically, the human effort involved in documenting papers is reduced to minimum, which even reduces the cost involved and delays due to errors that crop up.

Everything in the world is not perfect; same is the case with EDI.

It is not easy to implement EDI. Problems such as time management, cost requirement, training the employees, changing the culture of the organization are not at all an easy task!

All people are not computer-savvy, so, it becomes a bit difficult to impart training to all the employees.

Say for example: an employee who is 50 years old and has been working in the same organization for the past 30 years, would not be keen enough to change the way he works.

Like a coin has 2 sides, everything in the world too has different sides to it and so does EDI.

All the people may not like EDI, but it is popular and makes work really simple, easy and quick.

All in all, I would say, to make work easier, EDI is must for every organization!