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EDI- Electronic Data Interchange

6 Mar

In my last post I talked about Peer to Peer Networking which I hope you found interesting, Heres the link if you havent already checked it out >>>> https://eternalsunshineoftheismind.wordpress.com/2013/03/04/trends-in-information-systems-overview-of-p2p-continued/

Today I will talk about EDI. Electronice Data Interchange is the computer-to-computer exchange of routine business data between trading partners in standard data formats.

Conventional_Paper_Process.jpg

The diagram above illustrates how much slower the conventional paper process  than the EDI process. Additionally, the conventional paper process includes substantially more human intervention to move business information from one company to another.  The EDI process is a computer transmitting the information directly to another computer, eliminating the paperwork and human intervention.

So What Are the Benefits of EDI?

  • Speed – Data can move directly out of one computer system and into another with little to no delay.
  • Accuracy – Errors are reduced because data is not being re-keyed.  Error rates from entering data are between .5 – 3%.  On large volumes of transactions, the possibility for the introduction of errors is enormous.
  • Simplicity – EDI standards specify how data will be formatted and where it can be found.
  • Security – Much less likely to lose information transmitted through EDI than information sent via mail.  EDI can be accessed only by authorized users, and then there are audit trails and archives of data.  EDI data cannot be easily changed by unauthorized users.  It is also not subject to viruses.

Due to the above benefits the following results can be produced:

  • Faster buy-sell cycle time
  • Faster cash flow
  • Reduced order lead time
  • Reduced inventories
  • Ability to conduct just-in-time manufacturing
  • Improved trading partner relationships

Below is an example of how EDI works in a retail environment:

Document_Flow.gif

Thanks for reading, hope you enjoy🙂

One Response to “EDI- Electronic Data Interchange”

  1. sad111334931 March 8, 2013 at 12:16 pm #

    Thank god for that! Reduce so much paperwork, do you think there will be even advances in this area??

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