Electronic Data Interchange EDI

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Electronic Data InterchangeEDI
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Electronic Data Interchange

• EDI is the computer-to-computer exchange of
  business documents in standardized formats.
• Common transactions such as purchase orders,
  invoices, and advance ship notices can be
  transmitted and exchanged electronically between
  trading partners.

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What is EDI?

• The most common and widely used standard of EDI
  is EDIFACT
• EDI standards and very flexible covering a wide
  variety of different business situations and
  information requirements
• Transmits data in electronic format allowing
  documents to be processed programmatically

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Advantages

• Reduces Admin. operating costs of
  communications, cutting paper and postage bills
• Improved inventory control and cash management
• End-to end audit trails help keep track of
  documents to our trading partners

• Improved accuracy of information and error
  reduction because there is not data re-entry
  involved
• Reduced operating costs and processing delays

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Disadvantages

• EDI is expensive
• Systems must be compatible and follow the
  standardized protocol
• Setup needs are an obstacle to widespread use
• Requires a strong commitment from internal and
  external participants
• Batch processing

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Implementation

• The most common and reliable ways of exchanging
  documents id Value-Added Networks (VANs)

• A company bundles outgoing messages into a file
  and transmits the file using a modem to the VAN
• The VAN will examine the envelope and place the
  document into each recipients mailbox

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Why Use EDI?

• Maximizes the efficiency of exchanging documents
  within your trading community and across
  enterprise boundaries.
• Changes the way a company does business without
  any major re-development to the architecture of
  the existing business software.
• Offers speedy transactions, accurate information
  exchange and cost savings.

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How does EDI improves purchasing and warehousing?

• Faster trading cycle means ECR
• Used in conjunction with automated stock
  replenishment systems, EDI will reduce lead times
  enabling stock to reduce consequences

• JIT Environments- EDI gives you the chance to
  streamline your supplies and manufacturing
  activities to gain the competitive edge
• Improves trading relationships, strengthening
  customer and supplier bonds

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EDI Summary

• Strengthens your market position
• Provides the ability to responds to highly
  competitive new market entrants.
• Means business survival. Some large companies
  make EDI a pre0requisite to doing business

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Whats The Verdict?

• We have decided to implement EDI
• Despite the risk of reengineering our business
  process, the previously mentioned benefits
  considerably outweigh the costs
• EDI will maintain our Competitive Advantage in
  the Incontinence Market