IGNOU : M.COM : IBO 4 : UNIT 4 : Q - 5. What kind of strategic advantages an Export house may get through EDI ?

 

Ans. strategic advantages

It is clear therefore that EDI has an important role for business today. Linked to other Information Technology and Management Strategies it can assist what is now called the Re- engineering of Business Processes.

Organizations must use information to support their businesses. They must also share important information with their business partners as quickly as possible. Investments have therefore been made in systems which capture reliable sales information. Distribution and Inventory management systems manage the flow of products to the consumer and EDI ensures that suppliers, whose performance is essential to this process, receive rapid notification of schedule and order requirements. For retailers to be able to meet customer demand and back this up with rapid reordering and delivery mechanisms.EDI has become essential.

Automotive companies have set themselves the objective of delivering vehicles, built to order, within 4 weeks. To achieve this they need well managed communications with suppliers to ensure that components are delivered 'Just-in-Time' to the assembly line.

Suppliers now realize that if they receive orders and work schedules via EDI they must process them directly through their computer systems and rapidly make the appropriate amendments to their supplier schedules for the true benefits of EDI to be realized. This means that manual processing times are cut from hours to minutes and that managers can manage by exception rather than be overwhelmed with the volume of information which flows through the system.

For small companies the net result will be a business which is more tightly geared to meet the demands of large customers. Many existing users cite this as the main benefit of EDI to them. They feel that as they can deliver the levels of service that customers demand their business relationships are more secure. They have also improved management of their inventory and ordering processes and as the order and invoicing cycle now operates faster with more accurate information there are fewer invoice queries resulting in faster receipt of payment.