Using EDI to Mitigate the Impact of Loading Dock Congestion - Part 3: Conclusion & Recap

So far we have explained how and why EDI is important for optimal loading-dock performance and what thekey ingredients are for organizations seeking to improve DC, warehouse andstore-level loading-dock efficiency. In order for an organization and its logistics partners to have a highly effective shipment and delivery operation, there is a need for all of the three components, implemented as part of its logistics operation. 

Using EDI and the proper implementation of the related supply chain pieces that are related across a purchase order, an ASN, as well as a cross-docking type environment will help in achieving maximum benefits.

 

QLogitek has been helping organizations spanning the retail, manufacturing, distribution, telco, utility and public sector industries, by providing full automation and collaboration of various supply chain processes; the result has been the enhancement and streamlining of their purchasing, logistics and goods receipt and goods shipment operations for many years. Our integrated set of modules have helped, equally, all member organizations that are part of the delivery and shipment operations. Find out more about our products and services here. Bottom Line: Being a highly compliant, timely and accurate delivery and shipment operation is key for a successful business operation. In order to achieve this, one cannot be second guessing conveyance/handling equipment and human resource requirements for primary and support operations at the store/warehouse level. One just needs to KNOW.

Using EDI to Mitigate the Impact of Loading Dock Congestion - Part 2: 3 Key Components of an Efficient Loading Dock Operation

Key Components:

In our last post we discussed the need to improve efficiency in loading dock operations. In DCs, warehouses and at the retail store-level, loading-dock congestion can be a very annoying and costly problem. By integrating processes with EDI, organizations can achieve dramatic improvements in loading dock performance. 

The key components that make up an efficient loading dock operation are;

1.	An Integrated Purchase Oder to Advance Ship Notice (PO-ASN) Process
2.	An Integrated Appointment Scheduling Process
3.	Cross-Docking

An Integrated PO-ASN Process

With the proper use of EDI with integration of the PO and the ASN transactions, the loading and unloading of shipments can be efficiently handled as the ASN will identify the products that are being handled, so that the proper conveyances and equipment can be available during loading and unloading. This not only ensures that the shipment is accurate but also provides other necessary information regarding the shipment, so that the loading and unloading can be handled very efficiently.

An Integrated Appointment Scheduling Process

An integrated appointment scheduling system will result in the most optimum utilization of the loading docks, as full product and its handling details will be known by the warehouse/store for a given delivery or shipment. This integrated scheduling process must provide visibility and synchronization between the various processes; beginning with the Purchase Ordering system, to the Logistics System, to the Inventory Management System and finally with the Warehousing and HR scheduling System.

Cross-Docking Process

The cross docking facilities at a given warehouse/store help in reducing and/or eliminating additional steps necessary for product storage and retrieval. The main benefit of cross-docking is that it provides for a more efficient inbound and outbound flow of goods to a store and/or a warehouse. This reduces the need for storage and retrieval, hence speeds up the delivery of goods to their destination.

Using EDI to Mitigate the Impact of Loading Dock Congestion - Part 1: Our Point of View

In addition to its many other benefits and uses, EDI presents a solution to helping organizations mitigate the impact of loading dock congestion. Congestion at the loading dock, whether at the distribution center (DC), warehouse or store-level is a major headache for retailers as well as many other types of organizations dealing with merchandise that needs to be transported from a distribution centre or warehouse to a store. Time is money and time wasted on loading dock congestions is money you’ll never see again. A primary aspect of having a holistic process to reduce the inefficiencies of congestion at the loading dock is the use of an Advance Ship Notice (ASN) related to a particular Purchase Order (PO). The EDI-based ASN that supports cross-docking can dramatically enhance the related logistics needed to operate an effective merchandise handling operation.

An efficient loading dock operation will result in:

1.	Reduced Energy Costs Energy costs are reduced through the timely and rapid manner in which the shipments and deliveries are handled. A poor loading dock operation causes wasted energy due to pickup/delivery scheduling delays.
2.	Improved Safety of Stock
3.	Increased Productivity Shipments and deliveries can be handled with the efficient use of labour and the most relevant conveyances and equipment to deal with the type of merchandise being handled.
4.	Improved Pickup and Delivery Efficiency A poor loading dock operation causes endless problems with delivery and shipment schedules that result in wasted time, traffic delays and traffic problems.
5.	More Efficient Yard Operation It is worth noting that an integrated PO-ASN and an integrated Delivery and Shipment Appointment Scheduling operation and reduce or eliminate the need for a yard operation altogether. This alone could be of huge benefit to an organization.
6.	Reduced Need Temporary Goods Storage Integrated PO-ASN and Delivery Shipment and Appointment Scheduling can eliminate the need for satellite, temporary and/or retrieval goods storage areas.

In order to achieve full benefits, a well executed ASN process including cross-docking is crucial to reduce and eliminate loading dock congestion. In our next post, we’ll discuss the key components that make up an efficient loading dock operation including an integrated PO-ASN process, scheduling processes and cross-docking.

Using EDI to Manage Vendor Compliance and a Case Study of an Inbound Management System - Part 3: A Case Example

So far in this series, we have discussed the need for vendor compliance and the state of the vendor compliance market place. We know that EDI can be very beneficial in helping a retailer organization manage the compliance of its vendors; we know that organizations can gain significant visibility and increase the responsiveness of their supply chain operation through a best-in-class vendor compliance program. What we haven’t discussed so far is how this might look, which brings us to our case study of an Inbound Management System in practice. 

CASE STUDY:

The use of EDI continues to be the key ingredient in helping best-in-class organizations streamline their business operations and realize operational and financial benefits. Today we are looking at a tier 1 Canadian General Merchandiser.

This is a retailer who has gained unprecedented visibility into its inbound merchandise and has saved millions while making substantial improvements of speed and accuracy in its entire order-to-cash process.

In the first year of compliance tracking and monitoring, the retailer realized approximately 80 million dollars in compliance fee charge backs to its trading community.

The compliance information was used to fix and improve broken parts of the supply chain process. The compliance fee charge backs were practically eliminated in the 3rd year of the operation. As we can see, EDI can play a vital role in managing vendor compliance, benefiting both retailers and their vendor-partners.

               

Using EDI to Manage Vendor Compliance and a Case Study of an Inbound Management System - Part 2: The State of the Marketplace

Although supply chain automation technologies have been with us for almost half a century, we still find a very large part of supply chains within today’s businesses to not be vendor compliant. Having taken a look at the need for vendor compliance, we can see that this is due to the lack of proper automation and integration both on the part of both an retailers and its vendors.

The solutions offered by most technology vendors are very costly and lack the robust automation needed to handle organizations of different sizes and their trading needs.  Moreover, they often do not provide the necessary level of automation and integration in order to allow vendors to provide accurate and timely information to retailers .

In previous posts we have stated the merits and benefits derived from EDI implementations in terms of providing a supply chain with automation, integration and collaboration. Similarly, EDI is one of the most robust and best-in-class ways of achieving good vendor compliance.

The Benefits of a Well-Executed Vendor Compliance Program:

In order for a retailer and its vendor community to have a best-in-class vendor compliance program, the complete order-to-cash supply chain process has to be looked at and streamlined.

This may seem simple and straightforward. However, to achieve this requires that the entire lifecycle of the order-to-cash process be properly automated. That is, the complete process, from the issuance of a purchase order to the sale of the item, must be fully automated and integrated all the way down the line.

There are organizations that have hundreds of millions of dollars invested in supporting an operation that provides for a properly functioning fulfillment process. If vendor compliance in not properly planned across all the members of the supply chain, the resultant outcome will be that of a poor supply chain that ultimately brings financial losses to the retailer and its vendor community. This is certainly to be avoided.

The goal is to develop a well-planned and implemented vendor compliance program that will result in a highly compliant supply chain operation for both the retailer and the vendor, which is free of fines or fees associated with non-compliance. The following outlines the lifecycle of vendor compliance which works to this end.

Review and analyze the above 5 stages to ensure that all the vendor compliance criteria have been met.

If any of the compliance criteria was not met, then improvements and corrections have to be made in order to fix the broken part of the vendor compliance process.

Without the proper level of automation and integration of the seven above vendor compliance life-cycle events, vendor compliance is not possible. This will result in problems for the retailer and/or the vendor community. These problems could also sometimes spell the demise of a business.

In our next post, we’ll take a look at a case study of a large retailer that is using EDI to create a best-in-class, fully integrated, automated vendor compliance process.

Using EDI to Manage Vendor Compliance and a Case Study of an Inbound Management System - Part 1: The Need for Compliance

Introduction:

Over the past few months we have been discussing EDI in some detail, starting with the history and ongoing usefulness of EDI and more recently the importance of integration planning in B2B EDI projects. Today, we’re starting a series discussing the benefits of using EDI to manage vendor compliance. To complement this discussion, in a subsequent post, we will be presenting a case study of a Tier 1 Canadian retailer that realized substantial benefits through an automated and integrated vendor compliance program, known specifically as an Inbound Management System. 

Essentially, vendor compliance allows businesses to collaborate with their various vendor communities of trading partners to obtain end-to-end visibility, with a highly responsive and accurate supply chain operation. An automated and integrated vendor compliance program eliminates all of the non-compliant aspects of a supply chain and helps to achieve a highly vendor compliant operation both for the retailer and its trading communities. This results in millions of dollars being saved by the vendor communities through the avoidance of compliance fee charges levied by the retailer. In addition to the huge financial benefits, a highly vendor compliant operation also increases the speed and accuracy in the entire order-to-cash process.

The Need for Compliance:

Bottom Line: Organizations that implement good merchandise compliance programs benefit from having a very responsive, timely, accurate and satisfied relationship with their vendors. Vendor –compliant trading environments help the vendor community in eliminating compliance fees and other penalties. If this community can reduce and/or eliminate the problems of incorrect and untimely merchandise shipments, everyone wins.

A compliant trading environment helps the retailer sustain profitability and remain in business as a result of a compliant supply chain. One which is responsive to the need of its customers and can provide its customers with customer service that is responsive to customer needs.

With the proper use of EDI and other non-EDI automation technology implementation for vendor compliance, the retailer and its vendor community will benefit from the following;

These are only some of the benefits; there are literally endless benefits that a well implemented vendor compliance program can provide.

The best-in-class companies are those that have the most successful vendor compliance programs that substantially reduce errors and problems in the supply chain. The errors and problems that a good vendor compliant program eliminate are;

Any one of these problems can make a good company lose money, reputation and market share. 

This is why Best-In-Class companies are reaping the benefits of well thought out vendor compliance programs. Next time we will take a look at the state of the vendor compliance market place and assess the benefits of a well-executed vendor compliance program, an Inbound Management System, in more detail.

The Importance of Integration Planning in B2B EDI Supply Chain Projects – Part 4, Closing Thoughts

CONCLUSION:

As we have seen over the course of this series on the importance of integration planning in B2B EDI projects, a properly planned integration architecture can provide all the members of a supply chain community with a highly efficient overall trading platform. It can also provide them with a significant competitive advantage. This is really a key secret of very successful organizations today; and this is something that the successful organizations will not openly share with you.

The truth of the matter is that enjoying a BEST-in-CLASS supply chain status, is far less complex an undertaking than it first appears. All one needs to do is to ensure that the proper integration planning is done, by automating the supply chain transactions in an order and manner that will result in an operating environment that will be collaborative.

The secret is simplicity and conciseness of structure. Remove as many of, if not all of the in-between and/or redundant processes from the supply chain and directly integrate with the supply chain systems to achieve “Collaborative End to End Visibility and Collaborative End to End Responsiveness”.

Let us conclude with what we mean by “automating the supply chain transactions in an order and manner that will result in an operating environment that will be collaborative.” Once a process is created for basic purchasing transactions, it can be used to share critical planning and status information. This information can include sales activity, forecasts, inventory positions and work-in-process and shipment statuses. Moreover, this information can be shared daily or weekly or even in real-time for certain processes, versus monthly or quarterly, creating leaner and more synchronized processes.

The Importance of Integration Planning in B2B EDI Supply Chain Projects – Part 3, Properly Planned Processes

With proper EDI integration planning, the fulfillment process can be substantially streamlined, such that both the retailer and vendor achieve accurate, direct and real-time data within their supply chain systems. This type of integration planning removes, at a minimum, twice the number of redundant processes that are required to have a very responsive and visible fulfillment process.

Once proper integration planning is implemented, the data and information that is exchanged between the two parties at each end removes all  redundant and un-necessary processes resulting in a simplified fulfillment process that follows the following business process;

1. PO sent directly into the vendor’s system.
2. Vendor picks, packs and ships the PO.
3. Vendor sends the order to the retailer systems.
4. Retailer does a match of the PO and the shipment and makes the payment.

The example from our previous post implies that the flow of data and information is occurring between the key data points that are being updated directly without having to go through any in-between processes. This example shows how proper integration planning can streamline an organization’s EDI processes, resulting in substantial improvements both for the retailer and the vendor.

Also note that the example represents a process called an “Evaluated Receipt Settlement” or (ERS). ERS eliminates the need for an invoice and subsequent cheques, and all of the related processes around invoice and payment management.

Other Supply Chain Processes:

You have seen above an outline of a fulfillment process and how it can flow seamlessly with proper integration planning. Similarly, all other supply chain processes can benefit from proper integration planning.

These processes are;

• Manufacturing and Product Lifecycle Management;
• Logistics and Transportation;
• Reverse Logistics;
• Inventory and Warehouse Management;
• Inventory and Store Management;
• Forecasting and Replenishment;
• Business Intelligence and Data Analytics;
• Dashboard / Scorecard for a Business’s Operational Metrics & KPI’s;
• Dashboard /Scorecard for a Business’s Execution Metrics & KPI’s;
• HR Management for Logistics Management.
• HR Management for Warehousing and Distribution Facility Management;
• HR Management for Store Management.

One can see from the above list of key supply chain processes that there are potentially many components within an organization’s supply chain that can be automated. With proper automation and integration planning, each of these components together can work to deliver a BEST-IN-CLASS supply chain operation. This is ideally what an organization strives to achieve.

We’ll conclude this series in our next post by summing up and drawing connections between the key concepts that we have been discussing.

Stay Tuned!

The Importance of Integration Planning in B2B EDI Supply Chain Projects – Part 2, Optimal Integration Process

We know that we can’t adequately integrate anything – all the way from ingredients in a recipe to disparate systems within connected business processes – without planning. It’s just impossible. But knowing that you need to plan and understanding the process are two different things. In this post, we’ll discuss the process of integration planning and how to ensure that your process is optimized.

An Optimal and Powerful Process Outline:

Successful integration planning will achieve the removal of all of the unnecessary or redundant systems (see previous post) that consume/waste a tremendous amount of resources and play a major part in slowing down supply chain processes. It is this redundancy which is responsible for making supply chain processes cumbersome, error-prone, very difficult to manage and administer and, ultimately wasteful.

The redundant and completely unnecessary processes that must be removed from the supply chain operation were also discussed in our previous post.

The following outlines an example of a properly planned and designed integrated supply chain operation. This encompasses not only the integration planning process (that is, the planning of the actual integration phase), but also (and perhaps most importantly) the pre-integration planning process which must be considered and completed first.

Pre-Integration Planning Process:

Integration Planning Process:

In summary, unless the proper automation and the proper integration are implemented, many, if not all of the key business activities cannot be improved, as any and all collaboration with external and internal users and systems will not be accurate and timely. 

In our next post, we’ll look at how integration planning applies to a retailer’s supply chain process, what waste there may be, and we’ll describe a hypothetical example of a properly implemented integration plan.

The Importance of Integration Planning in B2B EDI Supply Chain Projects – Part 1, An Overview

Preamble:

Before we discuss the importance of Integration Planning in B2B EDI Supply Chain Projects, let’s quickly review the information we provided in our previous series of blogs on, “The Ongoing relevance of EDI” or “Why EDI is still relevant”.

In the last series of posts, we discussed EDI from a historical perspective, the current state and the future use of EDI in supply chain, how EDI costs have significantly decreased over time and how the proper use of EDI has resulted in transformational business and process improvements in supply chain for all organizations that use it as part of their overall supply chain management infrastructure. These organizations have continued to substantially improve in a highly cost effective manner as their overall EDI operations have become entrenched as a core foundational component their supply chain Infrastructure.

That having been said, there is an important factor which is critical to using EDI optimally which must be considered – integration planning. Without properly planning how EDI will integrate across the supply chain, it is impossible to consider an implementation to be “Best-in-Class.” Over the next 4 posts, we will explore integration planning for B2B EDI supply chain initiatives including examining what optimal plans and processes should look like.

The Promise of Integration Planning:

The secret of achieving a highly successful supply chain operation is the achievement of “Collaborative End-to-End Visibility” and “Collaborative End-to-End Responsiveness.” This visibility and responsiveness cannot be achieved without effective integration planning. A well-integrated operation will result in a highly effective and responsive business operation, both from an execution and administrative perspective.

The benefit of a properly automated and integrated supply chain operation is the ability to involve and collaborate with customers and suppliers to:

These are only an example of key benefits - there are literally endless benefits that an organization and its trading communities achieve with a properly automated supply chain.

The key ingredient (and we would be inclined to say that the ONLY ingredient) that is absolutely mandatory for a highly effective supply chain is in integration planning and execution. Without a properly integrated supply chain, collaboration cannot occur. Without proper collaborative processes, an organization cannot have a meaningful nor effective operation to deal with its trading communities.

A BEST-In-CLASS Integration Plan:

In order to achieve highly collaborative supply chain processes that will provide end-to-end visibility and the desired responsiveness, one must remove/eliminate as many in-between and redundant processes from the supply chain. These unnecessary data points are the processes that have to do with but not limited to;

As we can see, there are many points to consider when embarking on an integration planning process for a B2B EDI supply chain initiative. In our next post, we’ll look at optimizing the process outline as well as what pre-integration and integration planning processes should look like. 

The Ongoing Relevance of EDI Part 4 – EDI's Impact on Business; A Conclusion

The Revenue Impact of EDI:

Both average and best-in-class implementations of EDI have resulted in substantial revenue gains for businesses.  Revenue gains are proportional to the degree to which EDI has been implemented across all business operations, both for internal processes and processes that deal with external stakeholders and trading communities.

The cost budget analysis which we discussed in our previous post, only represents EDI implemented for the basic fulfillment (order, pick, pack & ship) aspects of a business. The basic EDI represented in our last post is related to the following base supply chain transactions; purchase order (EDI 850), purchase order change (EDI 860), product information (EDI 832), invoice (EDI 810), advance ship notice/manifest (EDI 856), the remittance advice (EDI 820) and acknowledgement(s) (EDI 997).

The additional revenue impact that an organization could expect would be in the range of 5% to 30%. So, the benefits of a good EDI program can have transformational change to an organization measured as both costs and revenue.  These benefits are only increasing with the advancements that are being made to EDI.

RESULTS OF SOME RECENT EDI SUPPLY CHAIN STUDIES:

Below are the findings of select North American studies. The study groups were formed from a large representation of organizations in the retail and CPG industry.

The two summary findings are for:

1. Industry measured statistics related to EDI/B2B improvement metrics.

2. Best-in-Class performance of companies.

Industry Measured Statistics related to EDI Improvement Metrics

| Create infographics

% Improvement of Core-Business Metrics in Best-in-Class EDI Implementations | Create infographics

CONCLUSION:

From this high level information, one can witness the transformational nature of a well implemented EDI program. The costs and revenue information provided in this article are only a baseline measure of an EDI program.

In order for an organization to further improve its cost and increase its revenues and service levels, an organization has to further automate and integrate EDI across all its other information, with EDI being the base technology to create an operating and service environment that is highly collaborative in nature. Without the collaborative Implementation, an organization will not operate in the most efficient manner.

In the Internet and mobile age, information is being generated and is growing at an exponential and uncontrolled manner. In order for organizations to deal with these oceans of data in a meaningful, disciplined, controlled and automated way only a robust standard such as EDI, can help properly harness this sea of data. EDI and its newer protocols and standards are truly an answer that are very comprehensive, robust and have proven the test of time.

EDI is now coming in to its true potential (which was simply not needed or even possible a decade or two ago); to address the immense, global expansion of data and information. Getting our hands and minds around this data requires a highly structured, disciplined and proven platform, which EDI will clearly provide for the use and benefit of coming generations.

The Ongoing Relevance of EDI Part 3 – A Comparative Analysis of EDI from the 1970s to the Present

In the first two posts in our series about the ongoing relevance of EDI, we’ve looked at EDI from an historical perspective, and tracked its growth from the 1960s, into the 20th century and on towards the near future.  In this post we’ll begin to take a look at why Electronic Data Interchange has not only survived, but become increasingly prominent over time. 

Proof of EDI’s Ongoing Relevance:

The notion that EDI is no longer relevant or that it has died and has been taken over by newer technologies, processes and procedures, is a completely false premise. In fact traditional EDI, since 2000, has become the single largest enabler of corporate improvements, innovation, and increased revenues due to a substantial decrease in costs (both capital and operating expenses). EDI has provided substantial productivity gains across many industries including, but not limited to, financial services, retail and consumer packaged goods (CPG), manufacturing, distribution, logistics, and healthcare.

In its present state, EDI has completely eliminated the need for capital outlay. Needless to say that the world of EDI has become ubiquitous as a core part of both supply chain operations, and non-supply-chain operations. EDI has grown into a technology that provides great value to any business, small, mid-sized or large, in all aspects of its commercialization and ongoing operations.

Let’s take a look at a comparative analysis of the impact of EDI and the benefits it promises to those that will plan and implement it to its fullest capabilities.

Comparative Analysis by Time – From the 70’s to the Present:

Summarized here are the financial, operational and service benefits of EDI encompassing all aspects of businesses. For ease of reference the table is ONLY discussing Tier 1 organizations, organizations that have an annual revenue of 5 billion and higher. The findings, however can also be extrapolated for organizations of all sizes on a relative basis.

These charts and tables represent the following TIER 1 industries:

1. Financial Services (Banking and Insurance)
2. Retail and Consumer Packaged Goods (CPG)
3. Manufacturing, Distribution and Logistics/Transportation
4. Health Care Industries

Please note that these industry sectors and their related supporting industries make up well over 70% of a country’s GDP. Hence the benefits achieved by these industries and the overall impact to a nation’s GDP, promises the continued use of EDI and its ongoing innovations. 

As we can plainly see, over time, the cost of implementing and running EDI have diminished significantly. But that hasn’t been the main driver of EDI’s continued success, nor has it been the reason for its rise to ubiquity. Cost drivers alone cannot sustain a technology over as much as 5 decades. Instead, it has been the increasingly substantial and wide spread business benefits of EDI which have enabled its prosperity. In our next post, we’ll conclude our series on the ongoing relevance of EDI by taking a look at EDI’s impact on business in more detail.

The Ongoing Relevance of EDI Part 2 – EDI in the 21st Century and Beyond

EDI Today

In our last post, we discussed the early years of EDI, looked at its adoption in the 1970’s, its early uses for both Supply Chain and Financial transactions, and its eventual rise to prominence by the end of the 20^th Century. By 2000, the massive popularity of the Internet and advancements in both Computing and Communications would open up huge opportunities for the users of EDI. Today, EDI has become much more affordable for those who, previously, could not afford it. Over the past decade of the 21^st Century, organizations of every size, no matter how small, can get into the EDI game and start to enjoy the benefits that only a select set of industries and organizations enjoyed only 10 or 20 years ago.

Simply put, the transformation of the technology operating infrastructure necessary for commerce to flourish has been re-defined by 21^st Century advancements driven primarily by the public Internet and IP-based networks.

This EDI trading transformation is now entrenched across many industries, as it has been re-architected and re-deployed as a widely consumable service on the public Internet, to the dismay of many pundits and gurus who had been claiming the death of EDI in its traditional form. Those who thought that the Internet, cloud computing, and new IP-based protocols would make EDI redundant couldn’t have been more wrong. EDI has adapted and flourished as the industry standard for B2B data collaboration in the modern information ecosystem and will continue to do so. In a nutshell, the Internet has only helped further proliferate the use and adoption of EDI by largely bringing down the costs and complexity to implement EDI within the small, midsize or large enterprise.

EDI for the Foreseeable Future

EDI service delivery has been completely re-engineered, adapted, and improved to take advantage of modern-day technological advancements in server computing and communications. It has become so deeply entrenched into all of our core computing and communication advancements and supporting technologies and practices, that the very base of successful operations are now an integral part of the way information technology will be consumed in the foreseeable future. Not only are Supply Chain and Finance departments feeling the benefits of EDI today but so are users in Sales, Marketing and IT. Hosted, or cloud computing-based deployments of EDI allow for business users to reap its benefits from a data integration & visibility perspective. Furthermore, IT departments benefit from both an ease-of-deployment & management perspective. Essentially, EDI is providing benefits across most if not all aspect of one’s business.

EDI is a unique weapon in that can have a positive impact on revenue growth, cost savings and customer satisfaction. The business case for EDI should include metrics improvement targets that address all three areas!

We all know that since the dawn of the computing and electronic age and now the Internet and eCommerce age, there has been a complete transformation in the technological world. For those who have maintained closeness to the advancements in our technology industry, know all too well, that some of the most remarkable innovations that are being unleashed in the global electronic game are the retrofitting of older technologies with the new forms of information technology management. (Think Mainframe interop with Web Services). This is also very true for EDI. The EDI standards and advancements since the 70’s and more so since the turn of the 21st century, are so great that their benefits can be expected for a long time to come.

But the real drivers for EDI adoption are not simply its ease of use and integration or its ability to adapt to the changing technological landscape. We’re in business after all. It is EDI’s newfound affordability and its ability to impact the bottom-line which are the real strengths of EDI from a buyer’s perspective.

Next week, we will take a look at some of the proof-points for EDI and how the cost of EDI has changed dramatically from the 1970’s to today.

The Ongoing Relevance of EDI Part 1 – EDI, An Historical Perspective

What does Electronic Data Interchange (EDI) conjure up in one’s mind when you hear it, or read about it or personally get involved with EDI? How or why is EDI still relevant almost 50 years after its inception? How will EDI evolve and remain relevant as time goes on? Over the course of the next 4 posts, we will be taking a very close look at something very close to our hearts, here at QLogitek, Electronic Data Interchange, or EDI. With an aim towards developing a better understanding of where EDI has been, how it has evolved and the impact it has (and continues to have) on the business landscape, we’ll be discussing the following:

• An Historical Perspective on EDI
• EDI in the 21st Century – Today and the Foreseeable Future
• A Comparative Analysis of EDI Costs
• The Impact of EDI on Business

An Historical Perspective

Reaction to EDI can range from utter disgust to pure joy, and there can be many feelings that get aroused anywhere in between. There really is no common response. Why is that?

The start of the 21st century was considered by many to be the dawn of mystical innovations that would make traditional EDI obsolete. Businesses, we thought, would find new ways to trade and communicate with their respective stakeholders and their supply chain trading partners and trading communities.

EDI, a very robust technology for trade, was developed in the 1960s, but it didn’t gain traction until the 70s. It became well received and utilized by the Retail and Finance sectors for their Purchase Orders, Invoicing and Payment Transactions. Gradually, the efficiencies achieved by these early adopters started to convince a broader commerce base to also adopt EDI for their business operations. By the 1980s EDI was becoming mainstream.

The last 50 years have produced hundreds if not thousands of EDI and EDI related industries, regulatory bodies, profit and not-for profit organizations that offer Standards, Technologies, Tools, Methodologies, Education & Training and a plethora of EDI resources. These EDI resources support the needs of businesses to use EDI as a core technology to provide Improvements and Productivity for their Supply and Demand Chain operations.

EDI has evolved in the last 50 years as a key enabling technology and a business best practice, as EDI provides a great competitive advantage and as an overall productivity improvement in any business operation, be it supply chain or otherwise.

As the adoption of EDI and its use required, in almost all cases, extensive capital outlay as well as a large ongoing operational expenditure, EDI could only be utilized by large organizations and in some cases by mid-size organizations.

Its use was also required, and in many cases, enforced by the larger organizations, for their smaller and mid-size trading communities to implement and use, if they wished to trade with the larger organization. 

It could be argued that 80% of businesses were not capable of using EDI or an alternate form of communication, thus causing difficulties for companies to grow. The businesses that were smart and capable enough to raise capital for growth had lesser challenges whilst many others suffered growth and competitive challenges.

Due in large part to its continued use, widespread adoption, and realized benefits that span 50 years, EDI can be considered as a primary business enabler. Simply put, its proper implementation typically results in benefits that can be felt across the entire organization.

Today, many successful industries and leading organizations have solid implementations of EDI and supporting processes & procedures that have become their secret to success, growth and productivity. But how is it continuing to be relevant in the 21st century?

In our next post, we’ll explore EDI as it entered the new millennium, and what we might be able to expect from EDI in the near future.