E-Commerce Operations And Management - An Introduction To EDI And Impact Of E-commerce

EDI and its Usage

Discuss about the E-Commerce Operations and Management.

EDI stands for Electronic data interchange. It is the concept of business communication done electronically, sharing certain information which was originally communicated through a paper. The two best examples of such information exchange are purchase orders and invoices. EDI facilitates parties doing such transacting such instruments without making any special arrangements.

EDI  has been existing for more than 30 years now and there are many EDI standards like X12, EDIFACT, ODETTE , etc. in some which there is no need of specific industries or regions. The data which is formatted representing the documents can be transmitted via telecommunications or physically from the originator to the recipient on electronic media. It differentiates electronic communication stating that EDI, the processing of a received message is originally intended for errors[1]. For example, the binary data transmitted is not EDI unless the data is treated as one or more elements of the EDI message and are not generally meant for the human interpretation as a part of the online data process exchange. EDI is officially defined as a transfer of structural data by agreed standards of messaging from one computer to the other without any human interference. Some areas where EDI is used well are:

Warehousing- Mitre 10 partners with Main freight to use Crossfire EDI for order confirmations and inventory administration between 2 dissimilar systems run by two different companies. Automating the orders through Crossfire Cloud EDI significantly decreased manual work for Mitre 10. Less manpower is needed and man-made errors are drastically reduced, saving a lot of cost and time and increasing efficiency. Crossfire is held in the “cloud”, which supports the system, meaning no in-house IT specialist is required for supporting and means that you can focus on your work.

Shipping- Kawasaki Kisen Kaisha Ltd. is among the largest shipping companies running in Japan, which operates a fleet of 320 vessels approximately. The company transports almost everything from grain, lumber, iron ore, crude oil globally. The Iconic Australia which has been using Crossfire to meet the statutory needs with customs, update the cargo information with the port authorities to track movements domestically and globally. Without EDI the Iconic would have been restricted in attaining their business goals. Crossfire runs 7 days a week 24 hours a day with almost 20,000 messages sent over in a week.

Transport- Shell Oil distributes car oils and liquids to workshops to New Zealand by Owens Global Logistics. It is used for translating consignments and message status between Shell and Owens. The consignment note is generated via Crossfire providing efficiencies in the pickup and delivering process including Processes are more standardized which gives more control[2]. Real-time is enabled for status events and significantly reduces the rates of human error and environmental footprint is also reduced by removing paper documentation and enhancing the business reputation.

EDI in Warehousing

 The business transactions of purchasing and selling the goods and services via internet or online is called e-commerce[3]. Electronic commerce uses technologies such as supply chain, NEFT, online marketing, and m-commerce. Contemporary e-commerce makes use of the (World Wide Web) WWW for making the transactions and exchanges happen though it might also use other technologies as well like e-mail. Purchase of online books (Amazon) and music downloads like iTunes includes typical e-commerce transactions and personalized liquor store or inventory services. E-commerce also includes:

1. B2B( business to business data interchange)
2. Launching new products and services.
3. Business to business buying and selling.
4. Currency exchanges.

How e-commerce has transformed The Iconic business process.

It was not long before that the idea of outsourcing and its data processing was considered a masterstroke. Outsourcing has allowed the company to not only cut the extra costs but to rent out time on its own uses like:

Product development- The results were processes that were radically almost unrecognizable. The application of digital media has transformed different practices. This transformation is at all levels from individual to subprocesses.

Supply chain management- Traditional EDI working in private value-added networks has helped exchange of data between buyers and suppliers for a number of transactions. VANs as legacy sponsored by big companies, handle the most routine business to business transactions. The increasing application of ERP (enterprise resource planning, sets the stage for a great breakthrough in supply chain management).

Customer service- The combination of web technologies and traditional call centers create an customer service enabled through online means and centre through which they reach customers on an individual basis, responding to their queries via fax, mail or video devices[4]. Depending on the type of call center these changes can reduce costs, increase profits and capture valuable feedback from customers. They also support the community's formation and exchange of VAN and services. And as its customers become used to this level of service, they are likely to find it gratifying.

• B2B leads the way- Business to business e-commerce plays an important role in global supply chain networks. Development through EDI networks is the main reason due to which the B2B e-commerce is better and larger in size than the direct consumer to consumer e-commerce and also one of the biggest. The steadfast in growth in business e-commerce has transformed the cost and profit scenario for the company. At the micro level, a growth of B2B e-commerce has shown the visible reduction in the cost of the transaction and has improved supply chain management.
• Double-digit growth in B2C- E-commerce is the fastest expanding trade sector and has outgrown every other business or trade. Recession weathered relatively good, albeit slower growth prior to the financial crisis. B2C sales come in through mail orders which have the online presence as well as traditional presence as well. Mail orders still have a strong hand, until they outperformed online retailers.
• Economic behavioral changes- Globalization has become more complex, buyers and sellers have increased connectivity and the speed at which they conduct sales. A major economic turmoil a faster response to sales can have flowing impacts resulting in order expansion, shipments, and inventory.
• Impact and implications of dealing with customers online- Customer support system, chatting sessions and mail support are held liable for having one on one contact regarding the issues of online purchases. Online customers are treated as such to expect a level of anonymity in terms of non-face to face customer service.
• Greater competition- The business that operates as an online trader outlook many benefits and new opportunities in terms of improving the distribution network. Competing in a marketplace which is global has opened them to have other traders competing throughout the world[5]. If The Iconic has a very successful line up for fashion throughout Australia this would not promise good sales in other countries as the native people might be able to get source similar stuff. Australian customer's maybe also to get same products from the Asian market from the manufacturers at a cheap price.
• The challenges of new technology and monopoly market- When the company established the online business it did not have any online presence in terms of IT needed to run the click of the business[6]. If Iconic is to expand and be a big player in regard to selling products online they will probably require a dedicated tech support to maintain the servers to process the orders for the customers and deliver correctly. Adopting new technologies and keeping systems to maintain e-commerce business. The expenses associated with it is important to invest to ensure the best services online offered to the customers[7]. To provide an online store is generally to increase the market on both a national and international level. To become a better known globally by more people to find the website then you have the chance to be a good player in your department of products by reaching out to the consumers who want to place online orders. Although the Iconic is mainly based in Australia their customer base extends to New Zealand as well[8]. Their retail existence is not that strong in New Zealand. While doing this they monopolize their power in the footwear market and extends their marketplace due to their reputation. A local family who runs the business and has an excellent product to sell online on a global scale. This is a way for reaching out to a broader marketplace and competes with a more popular company in the same market sector[9].

In the limelight of the above-executed analysis, it has been concluded that E-commerce is one of the contemporary means of operating business. The mechanism proves advantageous on various grounds for the business entity.

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