Wednesday, March 01, 2006

EDI, Success or Failure?

EDI facilitates the exchange of data between supply chain associates and obviously, the immediate sharing of market data all over the supply chain association is the key to attain the ability in order to reduction of costs and the concurrent improvement of customer satisfaction. This approach requires communications at all levels of supply chain association to be effective and timely, and hence the integration of ISs (Information Systems) becomes a necessary element of a successful supply chain association. That is why the past decades were witnesses of numerous large organizations reliance on EDI to handle their relationships with suppliers, and exchanging vital information on VANs (value-added networks).
Here, by pointing out Ehsan’s posting on 14th of February 2006, I may say Yes! Traditional VAN-based EDI business are rather expensive, and in some cases, are an unaffordable cost for small or mid-sized organizations, even with the development of Internet and E-SCM, widely using XML (eXtensible Mark-up Language) to communicate with business partners as a common language, etc. Because of this fact, and importance of having an IOS (Inter-Organizational Information Systems), still many suppliers are unwilling to switch their current EDI systems integrating because of their high investment in past.
Nonetheless, in spite of benefits of employing EDI systems, and adopting cross organizational electronic integration (upstream and/or downstream) among many organizations, the main question is still persisting: why does electronic integration in supply chain associations fail every so often? And what are success (or failure) factors of this integration?
It is complicated! In my opinion the electronic integration across a supply chain association relies on some attributes like every other integration, which eventually identify the success or failure of an EDI system adoption in its turn. In this respect we can call (out of many): mutual commitment and trust, social aspects of associated organizations, and power balance and dominance. As a matter of fact, in addition to investing in EDI and electronic integration solutions, besides, attributes are to be focused as supply chain associated organizations attitudes and prevailing atmosphere in the integration.

3 Comments:

Blogger Ehsan Ehsani said...

I agree Siamak!

Specially two points in your post were important: first size of the company and EDI readiness and the second managerial issues...If you go to my website www.supplychainer.com I have discussed this issues as well...

10:16 PM  
Blogger Siamak Zarrin Ghalami said...

Absolutely right. Thanks for publishing it.

1:08 PM  
Anonymous Emanio EDI said...

There is the rub my friend. Its all relative from business to business.

4:43 PM  

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