Edi Within the Food Retail Industry
Electronic Data Interchange within the Food Retail Industry
Report assessing the impacts of EDI on a company operating within the food retail industry.
1 Introduction to EDI
Electronic Data Interchange can be defined as:
“The transfer of electronic data from one organisations computer system to another’s, the data being structured in a commonly agreed format…” (Curtis and Cobham 2007)
The purpose of EDI is to enable a company to directly exchange business documents, such as purchase orders and invoices, with its suppliers and/or customers. The data is transmitted between computers over a leased line or a Value Added Network (VAN). The receiving trading partner 's EDI system then translates the standardized document so data can be directly input into its business systems. (McGahee 1999)
In order to use Traditional Electronic Data Interchange there are a number of requirements:
1) Communications Standards: Both computers must speak the same computer language.
2) Legal agreement to trade electronically: Due to inability to obtain signatures, you must have contractual arrangement in place between supplier and buyer.
3) Market specific document standards: To eliminate the need to have documentations for each retailer/supplier UN/EDIFACT produced standards, known as EDIFACT for electronic transmission of data in relation to commerce in goods and services. (Curtis and Cobham 2007)
4) Use of high telecommunications infrastructure: Usually in the form of Value added networks (networks specially designed and operated for EDI) which guarantee speed and security.
EDI can be used to support different elements of a business. This report will focus on the use of EDI in the food retail industry, for the transfer of business documents between a retailer and its supplier. It is important to establish the impacts EDI will have on both parties, as this will affect their relationship.
2 Impacts
EDI provides both operational and strategic benefits. Operational
Report assessing the impacts of EDI on a company operating within the food retail industry.
1 Introduction to EDI
Electronic Data Interchange can be defined as:
“The transfer of electronic data from one organisations computer system to another’s, the data being structured in a commonly agreed format…” (Curtis and Cobham 2007)
The purpose of EDI is to enable a company to directly exchange business documents, such as purchase orders and invoices, with its suppliers and/or customers. The data is transmitted between computers over a leased line or a Value Added Network (VAN). The receiving trading partner 's EDI system then translates the standardized document so data can be directly input into its business systems. (McGahee 1999)
In order to use Traditional Electronic Data Interchange there are a number of requirements:
1) Communications Standards: Both computers must speak the same computer language.
2) Legal agreement to trade electronically: Due to inability to obtain signatures, you must have contractual arrangement in place between supplier and buyer.
3) Market specific document standards: To eliminate the need to have documentations for each retailer/supplier UN/EDIFACT produced standards, known as EDIFACT for electronic transmission of data in relation to commerce in goods and services. (Curtis and Cobham 2007)
4) Use of high telecommunications infrastructure: Usually in the form of Value added networks (networks specially designed and operated for EDI) which guarantee speed and security.
EDI can be used to support different elements of a business. This report will focus on the use of EDI in the food retail industry, for the transfer of business documents between a retailer and its supplier. It is important to establish the impacts EDI will have on both parties, as this will affect their relationship.
2 Impacts
EDI provides both operational and strategic benefits. Operational
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