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- Inter-company application
- Used in supply chains by trading partners
- Exchange business documents between two systems
- xchange of structured business information by agreed message standards.

Within a supply chain customers send orders to suppliers and in return suppliers send the invoice back to the customer via an EDI format. Examples of EDI formats are BAAN systems and Red Tail EDI which require mappling, testing, launch, translation, communications, monitoring and backup. EDI involves integration of information between trading partners along the value chain. Within the supply chain, one company sends information to another company electronically, enabling them to become trading partners. It is an efficient method with no paper, real time info, standardised processes, shipment  authorisations and advanced shipment notices.

Examples of Companies using EDI

- Amazon - EDI documents communicated through transmition methods called AS/2 (Applicability statement 2). Includes gross weight, SCAC code, date, carrier tracking number etc.
- L'Oreal - Purchase orders, advanced shipment notices, invoices etc. No EDI software required, web based EDI services provided monthly by L'Oreal, no long term contracts.

Benefits of EDI
- Expedite transmission
- Competitive advantage
- Automated data entry
- Reciept verification
- Data validation
- Available free software
- Fast processing
- Competitive differentiation
- Cost savings and time efficiencies

Drawbacks of EDI
- Expensive to set up
- Initial set up time consuming
- EDI standard charges may apply
- System electronic protection required
- Staff training costs
- Limited trading partners.

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·         Part of the Internet of Things.

·         Communication of secure information from one source to another.

·         Allows for tracking and monitoring of goods.  For example, tracking where goods are in a warehouse before being shipped to a     customer.  The RFID tag can transmit back to a reader levels of inventory and the need to reorder stock.

·         Consists of a chip, memory and antenna to transmit the data.

·         The RFID tag communicates with a reader and can be powered or passive, only activated when read by a reader.

·         Tags can potentially be cloned.

·         Tags can be injected into a patient, carrying all medical information of the patient.

·         Alternative to barcode technology.

·         Potential for removing barriers for shopping, as this video link shows.  https://www.youtube.com/watch?v=rBXJ9Razofw

·         Commonly used in retail, but now being used in automotive, security and medical industries.

·         Provides information in real-time
·         RFID tags have issues with privacy, being read after goods have left the supply chain.

·         Potential to read data with readers, without your knowledge

·         Amazon utilises RFID technology to help with automation within their distribution centres
·         Used by companies to try and gain competitive advantage

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What is an ERP System and How can they be used in a Supply Chain

Developed in the 1990’s

Allows an organisation to use a system of many different applications related to technology, services and human resource.

Integrates all areas of an operation for example product planning, development, sales and marketing into a single database, application and user interface

Tracks operations at real time

Consist of many different modules that are individually purchased in able to be specific to the business needs.

Most common modules to incorporate are: product planning, inventory control, account/finance and human resource.

ERP has the ability to flexibly adjust the business processes, operations and information flow along the supply chain and becomes vital for success

Benefits and Limitations
Benefits

Status reports can be generated and analysed

Inaccuracies are limited or removed completely

Data is updated in real time allowing for more accuracy

Limitations

High start up cost for companies and can take 1-3 years to be fully complete and operational

Additional indirect costs over the life span of the system, for example computer upgrades, WAN upgrades

Difficult to achieve in decentralized organisations

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ERP Explained (Enterprise Resource Planning)

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ERP is a widely used acronym for a type of software called Enterprise Resource Planning that is not so simple to describe.