Internet based Electronic Data Interchange (EDI) and its role in Supply Chain Management

Dr. Tejinderpal Singh Assistant Professor University Business School Panjab University, Chandigarh Abstract Electronic Data Interchange (EDI) is the computer-to-computer exchange of routine business documents between trading partners in standard data formats. There are two key elements in basic EDI; First, electronic documents replace paper documents. Second, the exchange of documents takes place in a standardized format. Using these two basic concepts, any business can implement EDI in its processes and take advantages of the speed and economy of transferring of data which helps them in their supply chain management. There are many traditional ways in which an EDI environment can be implemented across trading partners such as EDI via VAN, EDI via VPN, EDI outsourcing, etc., called traditional types of EDI. Implementation of any of traditional type of EDI for the first time can appear to be a daunting challenge for many companies. Because, it involves huge cost and requires building of

infrastructure within the company and across trading partners. As a result, small and medium size companies were unable to implement EDI and were deprived of the benefits of EDI so far. But, with the increasing penetrating of internet throughout the world and unique advantages of internet, have given birth to a new type of EDI i.e. Internet based EDI. Internet based EDI, also called web-based EDI, allows all size businesses to receive, turn around, create and manage electronic documents using just a web browser instead of building EDI infrastructure. The present paper studies the various traditional types of EDI which are being used by companies along with their limitations. Paper further discusses the advantage of internet based EDI to small and medium companies and its role in their supply chain management. Paper highlights that Internet based EDI appears to be the most feasible alternative to replace traditional EDI as it offers the benefits such as potential to reach the widest possible number of trading partners, reduction in cost, easy to handle, user friendly, etc. In the end, paper concludes that companies using traditional EDI have also responded positively to Internet-based EDI and in the coming days, more and more companies will make use of internet based EDI. Key Words : Electronic Data Interchange, Internet Based EDI, Supply Chain Management, Value Added Networks (VAN).