Implementation of Electronic Data Interchange (EDI) System : Report

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Diploma in Supply Chain Management(DSCM 16/42)Implementation of Electronic Data Interchange (EDI) system for acompanyLecturer: Mr. Roger LeeFinal Year ProjectTeam Members: Leo Chandran Desmond : Tan Huey Yi : Foo Chuan Keong : Jerry Quek : Liew Win Ney : Tan Sie ChieSubmission Date: 16 January 2017
AcknowledgementWe have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. We would like to extend our sincere thanks to all of them.We are highly indebted to Mr. Roger for their guidance and constant supervision as well as for providing necessary information regarding the project and also for their support in completing the final project.An honorable mention goes to friends for their understandings and supports on us in completing this project. Without helps of the particular that mentioned above, we would face many difficulties while doing this
ContentPage1Introduction1.1 Supply Chain Management1.2 EDI systems1.3 EDI in Supply chain management2Procurement2.1 EDI in Procurement 2.2 The EDI Challenge : Large Competitive Purchase 2.3 EDI Application Example 3Implementation3.1 EDI Implementation3.2 The Implementation Process4Benefits5EDI technology
6EDI and JIT7Competitive Advantage8 Case Study8.1 Amazon8.2 WAL-MART8.3 DHL9Conclusion10Reference
Introduction1.1 Supply Chain ManagementA Supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may varygreatly from industry to industry and firm to firm. Below is an example of a very simple supply chain for a single product, where raw material isprocured from vendors, transformed into finished goods in a single step, and then transported to distribution centers, and ultimately, customers. Realistic supply chains have multiple end products with shared components, facilities and capacities. The flow of materials is not always along an arborescent network, various modes of transportation may be considered, and the bill of materials for the end items may be both deep and large.
Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. Marketing is an objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization---there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such an integrated can be achieved. Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm, and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and well-practiced relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The relationshipsare the strongest between players who directly pass the baton, but the entire team needs to make a coordinated effort to win the race. 1.2 EDI systems
Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners. Learn more about the benefits of EDI.Each term in the definition is significant:Computer-to-computer– EDI replaces postal mail, fax and email. While email is also an electronic approach, the documents exchanged via email must still be handled by people rather than computers. Having people involved slows down the processing of the documents and also introduces errors. Instead, EDI documents can flow straight through to the appropriate application on the receiver’s computer (e.g., the Order Management System) and processing can begin immediately. A typical manual process looks like this, with lots of paper and people involvement:

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