Let's look at consumer-packaged goods for an example of collaboration. If there are two companies that have made supply chain a household word, they are Wal-Mart and Procter & Gamble. Before these two companies started collaborating back in the '80s, retailers shared very little information with manufacturers.
But then the two giants built a software system that hooked P&G up to Wal-Mart's distribution centers .
But then the two giants built a software system that hooked P&G up to Wal-Mart's distribution centers
When P&G's products run low at the distribution centers, the system sends an automatic alert to P&G to ship more.
With this kind
of minute-to-minute information , P&G knows when to make, ship and display more products at the Wal-Mart stores.
EDI stands for
Electronic Data Interchange , a method of transporting all types of information, such as purchase orders, invoices, payments and even graphics, to another party electronically.
EDI technology was introduced by
Value-Added Networks (VANs) in the 1970s as an alternative to modem banks, and essentially replaces paper-based communications with electronic equivalents.
If you are like many companies that never moved to VAN-based EDI, and still
, fax, mail, telephone) documents with your trading partners, your savings could be tremendous.
Despite the benefits, VAN EDI had limited adoption because it was cost-prohibitive for most companies to deploy.
Before Internet EDI became available, approximately 80% of the suppliers in any given supply chain were communicating with their customers manually via fax, telephone and snail mail because they could not afford the investment required for VAN EDI.
Before Internet EDI became available, approximately 80% of the suppliers in any given supply chain were communicating with their customers manually via fax, telephone and snail mail
because they could not afford the investment required for VAN EDI.
With the advent of secure Internet EDI, companies of every size are now able to transact electronically with their trading partners.
And VAN services such as "Message Disposition Notifications" (MDNs) are built right into the software products.
Internet EDI (EDI-INT)
consists of three established standards to securely transport EDI documents over the Internet.
Here is a quick summary of Internet EDI Benefits
High transaction speed
One-time data entry
Reduced time and paperwork
100% secure electronic data transmission
standard is a way to securely transport EDI and XML documents over the Internet via HTTP (literally sending a document over the Internet rather than emailing the document over the Internet).
With increased business dependency on the Internet and solutions that were built to run on it,
dis-intermediation became the rallying cry for many technology-savvy companies.
The primary principle behind the AS1, AS2 and AS3 standards pertain to security and how to securely transport data via the Internet. The four primary points are
Privacy provides message content privacy via data encryption (the document can only be viewed by the sender/receiver).
Authentication is achieved via the sender's digital signature to ensure that the sender is actually who they claim to be.
Integrity is achieved through the use of hash totals that are enclosed in Message Disposition Notifications (MDNs) to...
Non-repudiation is ensured through a signed MDN receipt that the receiver sends back to the sender, ensuring that the...
Here is a breakdown of the advantages Internet EDI has over VAN EDI
Zero transaction fees
Easy to use
Entire supply chain
All data transport
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