1、,Electronic Data Interchange (EDI) and SCM,Define Electronic Data Interchange Give characteristics of EDI Discuss benefits of EDI, as well as barriers to its implementation Describe how EDIt works, and how it is moving to the Internet Contrast common (ANSI) EDI with Internet EDI Internet improvement
2、s to supply chain management,Electronic Data Interchange (EDI),Strategic Impact of EDI Definition of EDI Example of EDI How EDI works Benefits of EDI Direct and Process Barriers to EDI Adoption Advantages, Disadvantages and Characteristics of VANs EDI Implementation Model EDI migration to the intern
3、et,Strategic Impact of EDI,Business processes can become more efficient Customer-supplier relationships may change more trust and collaboration Market structure changes,Definition of EDI,The direct computer-to-computer transfer of business information between two businesses that uses a standard form
4、at. Focus on trade data interchange Often use VANs (Value-added networks) Use of standards,EDI Standards,Companies speak precisely the same language Same codes in same places Proprietary codes to standards (X12, EDIFACT,X400) Different computers can communicate with one another,EDI Standards,In 1968
5、, the Transportation Data Coordination Committee was formed, charged with exploring ways to reduce the paperwork burden American National Standards Institute (ANSI): coordinating body for standards in the United States since 1918 Accredited Standards Committee X12 (ASC X12) chartered by ANSI in 1979
6、 to develop EDI standards The current ASC X12 standard includes specifications for several hundred transaction sets,Types of EDI Benefits,Direct Process require reengineering can only be realized with all trading partners are on EDI can revolutionize the way business is done,Barriers to Adoption,Tra
7、ding partners not knowing benefits Hardware costs Interfacing translator, software costs Need for software modifications Network (VAN) service charges Costs and effort for trading partner conversion,Trading Partner Concerns in EDI Implementation,Costs,Trust,Dependency,Benefits,EDI,Value Added Networ
8、ks,Trading partners can implement the EDI network and EDI translation process in several ways, each using one of two basic approachesDirect connection Indirect connection,Direct Connection Between Trading Partners,Requires each business in the network to operate its own on-site EDI translator comput
9、er EDI translator computers are connected to each other using modems or dedicated leased lines Trading partners using different protocols can make direct connection options difficult to implement,Indirect Connection Between Trading Partners,Companies use the services of a value-added network (VAN) T
10、he VAN provides communications equipment, software, and skills needed to receive, store, and forward electronic messages containing EDI transaction sets The VAN often supplies the software needed to connect to its services,Advantages of Using a Value Added Network,Users support only one communicatio
11、ns protocol The VAN records activity in an audit log, providing an independent record of transactions The VAN can provide translation between different transaction sets The VAN can perform automatic compliance checks to ensure the transaction set is in the specified EDI format,Disadvantages of Using
12、 a Value Added Network,Most VANs require an enrollment fee, a monthly maintenance fee, and a transaction fee VANs can be cumbersome and expensive for companies with trading partners using different VANs Inter-VAN transfers do not always provide a clear audit trail,EDI on the Internet,Viewed as a rep
13、lacement for expensive leased lines and dial-up connections Small companies can get back in the game of selling to large customers the demanded EDI capabilities of their suppliers Concerns about security and lack of audit logs continue to be a major roadblock Takes advantage of open architecture,Com
14、parison of EDI Standards,EDI STANDARDS(ASC/ANSI) Security provided by private networks EFT (Electronic Funds Transmission) - standard for wire payments between client and vendor Transactions sets (810-invoices;850, 855- POs),INTERNET STANDARDS SSL (Secure Sockets Layer) SET (Secure Electroic Transac
15、tions) - protocol proposed by Visa/MC for NetNo transaction standards,Current Internet EDI Usage,Much EDI traffic carried over private networks scalability reliability processing power in 1996 EDI Group study 85% of respondents using some form of EDI only 3-4% were using Internet EDI,Changes on the
16、Horizon,S/MIME protocol which enables e-mail applications to verify transmission and receipt of EDI messages Products to map Web EDI transactions sent in multiple formats to legacy EDI applications New (but potentially competing) technologies XML OBI,Products to Smooth EDI Wrinkles,GEISs TradeWeb -
17、an entry-level forms-based service with which subscribers can send and receive four basic EDI documents over the Internet using a standard Web browser for flat fee ($50/mo) purchase order (PO), PO acknowledgement invoice, functional acknowledgement GEISs Trading Process Network for posting EDI-based
18、 forms on the Web,A trading partners bank is called a Financial EDI (FEDI) Many trading partners are reluctant to send FEDI transfers for large sums of money over the Internet Companies may opt to establish an indirect connection through a VAN for the added security for FEDI transaction,Financial EDI,
