EDI-Retail.pptx..........................

The role of EDI in Retail

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2. TODAY’S AGENDA BBA-HO&M Retail Management 2 WHAT IS E-COMMERCE EVOLUTION OF EDI WHAT IS EDI EDI TRANSACTIONS TYPES OF EDI TRANSACTIONS TYPES OF EDI ROLE OF EDI HOW DOES IT WORKS BENEFITS OF EDI FACTS & FIGURES CASE IN POINT EDI - CLIP

3. E-Commerce - is a very common term that refers to the exchange of information via electronic media: – B 2 C - the i n f orm a tion electronic between e x ch a n g e of B u sin e s s & Consumer i.e. booking airline tickets and hotel reservations or buying books, shoes and clothes online. B2B - the electronic exchange of information between two businesses B2G – e-Invoicing mandates require that businesses providing goods and services to any government entity – educational, medical, transportation, local and federal offices – must e-Invoice (Nov. 27, 2018). E-COMMERCE BBA-HO&M Retail Management 3

4. EVOLUTION OF EDI BBA-HO&M Retail Management 4 In Late 1970’s and Early 1980’s for E-Commerce to Transmit data from one organization to another Organization. Rapid-response was building. Supply chain visibility was required. Big data and growing use of business analytics was coming into the scene. Uses of technology were in the accounting and financial areas primarily focusing on keeping track of revenue and ensuring that bills to suppliers were paid on time. By Late 1980’s Information technology resources and software systems were developed and designed to help facilitate supply chain operations – EDI was born.

5. The Evolution of EDI Broadly defined communications protocol for exchanging documents among computers – Stage 1: 1970s–1980s— Document automation Stage 2: Early 1990s—Document elimination Stage 3: Mid-1990s—Continuous replenishment/access model BBA-HO&M Retail Management 5

6. Electronic data interchange (EDI) is the electronic movement of data between or within organizations in a structured, computer-retrievable data format that permits information to be transferred from a computer program in one location to a computer program in another location. EDI is used for electronic funds transfer (EFT) between financial institutions, which facilitates such common transactions as the direct deposit of payroll checks by employers, the direct debit of consumer accounts to make mortgage or utility payments, and the electronic payment of federal taxes by businesses. EDI ELECTRONIC DATA INTERCHANGE BBA-HO&M Retail Management 6

7. Another common application of EDI involves the direct exchange of standard business transaction documents from one business to another via computer. Such as: Purchase orders Invoices and Bills of lading EDI is mainly used by retail businesses as part of their electronic scanning and point-of-sale (POS) inventory replenishment systems. EDI – ELECTRONIC DATA INTERCHANGE BBA-HO&M Retail Management 7

8. TYPES OF DATA MOVEMENT BBA-HO&M Retail Management 8

9. How EDI works with the help of a Diagram BBA-HO&M Retail Management 9

10. How EDI Works? User Places an Order into the Computer That Order goes through an interface program. The Application edits the Order and relays it to intermediate EDI Files. Purchase Order is changed to EDI. Translation program functions with several programs. It al low s r ec e i v er's s y s t em t o i n t erp r e t order. The network proceeds to take the order. From EDI’s format it is changed back to sender’s Original format. Thi s al low s t h e r ecei v er t o r ead the document. BBA-HO&M Retail Management 10

11. MOST COMMON EDI TRANSACTIONS BETWEEN BUSINESSES BBA-HO&M Retail Management 11 PURCHASE ORDERS – What you Want, How Much You Want, What Variety you Want, When &Where to Ship.. INVOICES – How Much in What Currency and When to Pay.. ADVANCED SHIPPING NOTICES – Information of Delivery, Notification to Client of Shipment.. FUNCTIONAL ACKNOWLEDMENT – Receiving of acknowledgement electronically..

12. ASC X12 204 Motor Carrier Load Tender 214 Transportation Carrier Shipment Status Message 754 Routing Instructions 810 Invoice • 846 Inventory Inquiry/Advice 850 Purchase Order 855 Purchase Order Acknowledgment 869 Order Status Inquiry 944 Warehouse Stock Transfer Receipt Advice 997 Functional Ac k n o wledgme n t ASC (Accredited Standards Committee) X12 develops and maintains EDI standards that facilitate electronic data interchange relating to business transactions. BBA-HO&M Retail Management TRAN S A C TI O 1 N 6 S

13. EDI Outsourcing EDI Outsourcing (also referred to as B2B Managed Services and B2B Outsourcing) is a fastest-growing option that enables companies to use external specialist resources to manage their EDI environment on a day-to-day basis. This is in part driven by companies wanting to integrate to back office business systems such as Enterprise Resource Planning (ERP) platforms. Many companies do not want to use their internal resources to undertake this ongoing type of work so they outsource it instead. BBA-HO&M Retail Management 13

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20. LIMITATIONS OF EDI BBA-HO&M Retail Management 20

21. INDUSTRY WISE EDI USAGE Automotive Distribution Energy Government Grocery Hard line retail Healthcare Home furnishings Home improvement Industrial Office supplies Pharmacy Publishing Soft line retail Specialty Sporting goods Third party logistics Transportation BBA-HO&M Retail Management 21

22. Some Facts & Figures of Giant Companies with EDI: Retailers are adding more products to build a larger assortment of product offerings. How are they doing this? They are not building bigger stores. Instead they are adding new products to their web stores and revamping what is sold in stores to stay close to their customers’ needs. Home Depot is expanding its depth and breadth of products and now has 600,000 items available from its online store. A typical Home Depot store stocks about 35,000 items. Wal-Mart supercenter has about 150,000 different products. But online, Wal-Mart offers over 5 million items. Sears says they have 30 million products available from their web store. Target announced in October the addition of 35,000 new items and free shipping for the holiday season. Amazon , a major driver of competitive retail trends and whose aim is to “sell everything to everyone,” sells over 200 million products BBA-HO&M Retail Management 22

23. Case in Point Wal-Mart and Technology Wal-Mart has become the world’s largest and most powerful retailer with the highest sales per sq u a r e f oot , i n v en t or y t u rn o v e r , and operating profit of any discount retailer. Wal- Mart b e g an w ith the g oa l t o p r o vi d e customers with the goods they wanted when and whe r e they w a n t ed th e m . N e xt , it focused on developing cost structures that allowed it to offer low, everyday pricing. The replenishment of inventory is one of the key facilitators behind this strategy. W a l -Mar t ’ s s u cc e s s efficient i n t e g r a t i on i s pr i ma r il y due to of manufacturing, warehousing, s u p p li e r , and distribution to stores. There are four key components of its supply chain strategy: supplier partnerships, cross docking and distribution management, technology, and integration. Technology plays a key role in Wal-Mart’s supply chain serving as the foundation of its efficient and effective supply chain. Wal- Mart has the largest information technology infrastructure of any private company in the world. Its state-of-the-art technology and network design enable Wal- Mart; to accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, manage customer relationships and service response logistics. Wal-Mart designed a point-of-sale system that improved customer services, decreased inventory throughout its supply chain, improved the overall competitive capability of the company. BBA-HO&M

24. Case in Point - Highlights BBA-HO&M Retail Management 24 There are a number of benefits to Wal-Mart’s supply chain partners. For suppliers: Demand is visible Obsolete stocks are minimized Volume increases This networked supply chain process has helped to change the way consumer-products companies and wholesaler distributors do business with retailers.