Electronic Data Interchange
In the past few decades, the world has seen the way technology has changed communication, transportation, and the flow of information. As business standards and global competition enters all market place, businesses have adapted innovations and cost saving methods to stay afloat. Electronic Data Interchange (EDI) has become the required standards to expand businesses and uphold customers’ evolving sophistication.
“Electronic Data Interchange (EDI) may be most easily understood as the replacement of paper-based purchase orders with electronic equivalents… EDI offers the prospect of easy and cheap communication of structured information throughout the corporate community, and is capable of facilitating much closer integration among hitherto remote organizations (Clarke).” To put it into more applicable context, EDI symbolizes the conversations between two entities, either internal or external. Through use of these systems, large corporations to small-size companies have been able to coordinate production as well as purchasing and supplying. Through widespread adaptation, businesses have standardized EDI as a crucial tool in material management.
According to the Minnesota Department of Labor and Industry, adapting EDI system has reduced costs, labor hours while improving performance, flexibility, and accuracy. EDI has eliminated the costs incurred through the production, distribution, and transfer of hard copies of documents; all communications and information is just a click away. Accuracy and optimized efficiency are the factors that businesses rely on EDI for their supply and procurement functions. Through the ability to track orders, origins of information, and source of communication, supply chain has never been linked faster. From its obvious benefits, EDI has created a need for all businesses to implement the software to maintain competitive edge.
However, EDI’s proprietary natures have created barriers...