When it comes to integrating with supply chain management (SCM) systems, electronic data interchange (EDI) is usually going to connect elsewhere, typically with an ERP system where the processes and people are in place to handle its highly structured information. Thus, at least for now, SCM EDI integration is usually a matter of connecting with ERP rather than SCM.
Isn't EDI "old" technology that has been replaced by web portals and internet technology?
EDI has been powering business-to-business transactions for almost 30 years. Despite the meteoric growth of the internet, EDI is still with us although EDI is no longer the "only game in town" as it was when it began in the 1980s.
In fact, EDI can be used to communicate via the internet. Because EDI is designed to provide automatic and reliable exchange of very specific things such as purchase orders, it is still considered a very desirable capability and in many cases is expanding. The big impact from the internet has been providing an additional transmission channel as an alternative to commercial, value-added networks (VANs).
What's the relationship between EDI and SCM?
For the most part, EDI and SCM don't connect directly. EDI is part of the B2B infrastructure traditionally including pre-internet technologies such as value-added networks and free-standing modems that may indirectly support SCM capability. SCM and EDI integration generally occurs through an ERP system.
What about integration issues?
Integration is primarily done through ERP systems which are equipped to handle the kind of information EDI supplies. So, SCM systems are most likely to connect to EDI via ERP.
If I'm concerned primarily about SCM, why do I need to care about EDI?
EDI provides valuable information, usually in the form of transaction documents such as shipping notices and purchase orders that filters through many corporate systems. However, because EDI requires some very specific skills sets, the human element -- trained staff -- can be the most important investment. As an alternative, some companies are turning to third party infrastructure providers who can deliver EDI functionality as a service.
About the author: Alan Earls had his first exposure to computer programming on one of Digital Equipment Corp.'s PDP-8 minicomputers. He went on to serve as editor of the newspaper Mass High Tech and is the author of the book Route 128 and the Birth of the Age of High Tech, a photographic essay on a key part of Massachusetts economic history. He currently is a freelance writer, covering many aspects of IT technology and writing regularly for SearchManufacturingERP.com.