EDI seeks to electronically transmit data between businesses in a standardized format, eliminating delays and errors from paper-based transactions. It is used extensively in procurement between buyers and sellers. Examples given include universities exchanging transcripts, auto manufacturers transmitting engineering designs, and large companies sending price catalogs to customers. Benefits of EDI include reduced costs from eliminating unnecessary paperwork processing, improved information accessibility and business process monitoring, and faster resolution of issues and customer service.
EDI seeks to electronically transmit data between businesses in a standardized format, eliminating delays and errors from paper-based transactions. It is used extensively in procurement between buyers and sellers. Examples given include universities exchanging transcripts, auto manufacturers transmitting engineering designs, and large companies sending price catalogs to customers. Benefits of EDI include reduced costs from eliminating unnecessary paperwork processing, improved information accessibility and business process monitoring, and faster resolution of issues and customer service.
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EDI seeks to electronically transmit data between businesses in a standardized format, eliminating delays and errors from paper-based transactions. It is used extensively in procurement between buyers and sellers. Examples given include universities exchanging transcripts, auto manufacturers transmitting engineering designs, and large companies sending price catalogs to customers. Benefits of EDI include reduced costs from eliminating unnecessary paperwork processing, improved information accessibility and business process monitoring, and faster resolution of issues and customer service.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online from Scribd
manually prepared form or a form from a business application, translates that data into a standard electronic format, and transmits. At the receiving end, the standard format is “untranslated” into a format that can be read by the recipient’s application. Hence output from one application becomes input to another through the computer-to-computer exchange of information. This process results in elimination of the delays and the error inherent in paper-based transactions. EDI IN ACTION • 1) EDI has been used extensively in the procurement function to streamline the interaction between the buyer and seller. • 2) University use EDI to exchange transcripts quickly. • 3) Auto manufacturers use EDI to transmit large, complex engineering design created on specialized computers. • 4) Large multinational firms use EDI to send on-line price catalogs to customers listing products, prices, and documents and terms, thereby enabling EDI-capable businesses can compare prices and terms and make direct orders by EDI. EDI IN ACTION
• In a traditional system, the pervasive
practice of converting digital data into hard copy data that is reconverted into electronic information again on the receiving end generates unnecessary costs. The use EDI carriers save substantial administration costs by eliminating the bulk of circulating paperwork. Further, the accessibility of information is improved manifold, which enables EDI IN ACTION • The EDI transactions for a purchase, shipment and corresponding payment are as follows. • Buyer’s computer sends Purchase Order to seller’s computer • Seller’s computer sends Purchase Order Confirmation to buyer’s computer • Seller’s computer sends Booking Request to transport company’s computer • Transport company’s computer sends Booking Confirmation to seller’s computer • Seller’s computer sends Advance Ship notice to buyer’s computer • Transport company’s computer sends status seller’s computer • Buyer’s computer sends Receipt Advice to seller’s computer • Seller’s computer sends Invoice to buyer’s EDI IN ACTION • The Purchase Order Confirmation is the seller’s acceptance of the price and terms of sale. Various internal departments are aggregated and called buyers and seller to simplify the description. All interactions occur through EDI forms and in most cases are generated automatically by the computer. • EDI is a strategic tool that enhances the competitiveness of the companies involved. The improved ability to exchange huge amounts of data in a fast and effective manner tends to speed up business process. Further, these processes can be closely monitored, providing the companies with the ability to trace, manage, and audit the operation. Such flexibility allows firms to adopt business techniques aimed at removing the bottlenecks and making the business processes more efficient. EDI IN ACTION • Benefits of EDI • EDI can be cost-and time-saving systems for many reasons. The automatic transfer of information from computer to computer reduces the need to re-key information and as such reduces cost errors to near zero. EDI transactions produce acknowledgements of receipt of data. Many firms are now finding that this acknowledgement can make this invoice obsolete and save many efforts now devoted to acquiring, receiving and paying for goods. EDI IN ACTION • Reduced paper-system: The effort and expense a company devotes to maintaining records, paper-related supplies, filing cabinets, or other storage systems and to the personnel required to maintain have been taken over by EDI through automation, thereby drastically reducing the time spent to process them. This can also reduce the postage bills • Improved problems resolution and customer service- EDI can minimize the time companies spend to identify and resolve inter-business problems. Much of the problems come from data-entry errors and EDI can eliminate many of them. EDI can improve customer services by enabling the quick transfer of business documents and a marked decrease in errors. This apart, by providing an automatic audit trail, it frees accounting staff for more productive activities. EDI IN ACTION • EDI benefits for International trade includes • Reduced transaction expenditure • Quicker movement of imported and exported goods • Improved customer service through “track and trace programs that quickly identify to the many participants in a trade deal- companies, customs, bank, insurers, transport agents and so on-where things are located or being handled; and • Faster customs clearance and reduced opportunities for corruption, a huge