Question

The following two technologies provide support for SCM (supply chain management). For each of the following two technologies, provide an example and explain how each example could help to improve Target’s SCM:

(i) Electronic data interchange (EDI) which is a communication standard that enables business partners to exchange routine documents electronically. (Section 11.7, p. 319-320).

(ii) Extranets, which link business partners over the Internet by providing them access to certain areas of each other’s corporate intranets. (Section 11.7, p. 321-322).

Answer 1

Before coming to the actual answer, let us understand what is a network?

A NETWORK  is an interconnection ( interconnection) of computers to share information.

Now, there are different types of networks with respect to the sharing of information.

For example, the Internet is a network of networks that allows users to access information publically.

However, certain documents cannot be shared with everyone due to competition, leakage of secrets and other reasons.

And this leads to the discovery of Intranet which is a private internet that allows only select users to transmit and share information electronically.

A subset of this intranet is an extranet or "extraordinary network" which is used to share information electronically with a particular select class or group of people privately.

Also, whenever information like receipts, vouchers, etc are transmitted electronically, we call it "EDI- ELECTRONIC DATA INTERCHANGE" or in other words EDI is an alternative to paper-based transmission.

Under supply chain management, An organization can collect data from its customers using Electronic Data Interchange or in other words, when a customer places an order on an e-commerce website. At the time of placing an order all required information like shipping address, mobile number , name, etc are being collected privately on the site using both extranet and EDI .(Example 1)

This helps in speeding up the process of placing an order where earlier the order was placed physically over the counter .

Also, continuing the same example as example 2 , when the information is collected by the Organisation from its customer , it can then share the same with its supplier using Extranet and as the data is being forwarded, again EDI comes into picture .

Morever, the customer also gets a copy of the invoice on mail which is also an example of EDI .

So , to conclude , It is true that both EDI and Extranet have supported SCM in a great manner .