Electronic Data Interchange [EDI] Essay Example
Electronic Data Interchange [EDI] Essay Example

Electronic Data Interchange [EDI] Essay Example

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  • Pages: 3 (676 words)
  • Published: August 5, 2016
  • Type: Case Study
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Pump Supplier Company (PSC) must have latest technological implementation to facilitate its business activities among buyers and direct customers. It is of utmost importance that our company now invests in to buy new computers, networking systems and other essential equipments to implement EDI successfully. This will enhance communication and speed-up business activities of sale and purchase. It is for the mutual benefit of both parties and end-consumers.

Electronic Data Interchange is most common term used for sharing and exchanging information between different computer networks. Networks can be created between different departments of a company, between supplier and purchaser (B2B), and business to consumer. It is an electronic way that businesses share information and important files in sales and purchase order.

For implementation of EDI, PSC needs latest technology equipments in order to reach the standards set of by ANSI.

Purchase of following equipment and components will be necessary

  • ...

    Desktop computers

  • Backup drives
  • Fiber optic cables
  • VANs
  • Internet
  • Routers
  • Wireless equipments
  • Backbone System
  • Translator
  • Mail Boxing or Repository
  • Web server
  • Adapter
  • Supplier Registration
  • This way the entire view of company and its departmental functions can be managed on the computer system. Single software will be employed in every department and for different tasks including manufacturing, sales, finance, HR and warehouse. In addition, to coordinate functioning of the departments via networks bring all the tasks to the one platform. Software program works from a single database to connect all the single

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units in individual departments to one system. The implementing of EDI in an organization has huge benefits if executed correctly.

Pumps Supplier Company has been very successful in implement EDI in their organization. Main product of company is a router. It is the software combined with hardware to control traffic from Internet and intranet users. The company has been ranked among top five in 1997 and the most successful. How EDI has been successfully implemented in the pump company is revealed by the fact that all of its functions from manufacturing to the sales are centralized. Departments including manufacturing, finance, human resource, customer support, information technology and sales are well coordinated and functionally linked with each other. Though, two of its departments kept at the ‘lines of business’ are Product marketing and R&D.  It reached market capital of $531 billion in 2000 competing well with Microsoft and Intel.

The key factors in implementing EDI are to standardize the customer order so that the system can easily track all the way from order placement to the final sales. It was considered important to have all the information in one software system instead of having it in different programs. This way the company would be able to track orders and coordinating different business processes from manufacturing to shipping.

  • Automated flow of information between company and the clients
  • Reduce problem tackling time
  •  Enhance communication within different departments, customers and suppliers
  • Sending efficient Shipping Notices
  • Easy to use software for EDI and XML transactions present on the desktop
  • Efficient way to keep track of Purchase

Orders and send Invoices

  • Ability to send e-documents present on the desktop back to the customers as EDI or XML transactions
  • Enhancement of "Order Cash" cycle

    • To receive faster payments EDI will speed up sending invoices to the customer
    • EDI system will give customers an efficient way to send their feedbacks on reception of invoices. Invoices can be sent in timely fashion.
    • This system can also allow receiving electronic payments via ACH deposits. This will enhance faster collection of payments.
    • Reduce time of inventory, increased collaboration with all departments and customers.

    Implementation of EDI will save costs and time for many process hence reducing cost of products to benefit customers

    • EDI can standardize every process with time and efficient delivery.
    • Many tasks can be accomplished with simply press of a button.
    • Minimizing time of delivery
    • Reduced number of employee needed to run various tasks as many software implementations can be done and tasks can be accomplished with a press of a button.
    • Customer’s feedback and standardization process is made easy
    • Immediate salary deposit
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