Electronic Transactions - An Introduction to EDI in the Retail Industry

Finally, the retailer can send the order to the supplier at the press of a button, with the order first being automatically converted and then transmitted to the supplier. All messages are sent in accordance with the UN/EDIFACT standard. The messages received by the distribution centre from all retailers are automatically checked for availability (ability to deliver) and, if the result is positive, the order is automatically passed on for making up and dispatch. If the result is negative , an order acknowledgement (e.g. quoting a new delivery date) is generated and sent back to the retailer. The retailer can now accept the terms of this order acknowledgement and generate an order amendment which is sent back to the distribution centre. Benefits The process described above can be performed in a matter of minutes by the retailer, while at the distribution end everything is fully automated; on the basis of the details available on his PC, the retailer can place an order that has been checked for completeness and correct-ness or make an amendment in the shortest possible time. This cuts down considerably on administrative work and allows him more time to devote to serving and advising his customers. In addition to this, the retailer also has comprehensive statistical data at his disposal which can tell him a lot about lines that sell well and those that do not, about turnover with the supplier and about much more besides. Put simply, one of the major global business activities consists in the production of goods and their distribution to end-users via wholesalers and retailers. This flow of goods is accompanied by a wealth of necessary documentation (orders, order acknowledgements, amendments, invoices, product catalogues , pricelists etc.), which have to be exchanged between the parties involved in order to ensure the correct flow of merchandise. The article gives a brief introduction to EDI and describes how the retail industry currently is introducing an electronic trading system in Europe. contains not only the data converter and data communications module but also an application for the execution of the business transactions of ordering, order acknowledgement and order amendment. At a later stage further functions such as invoicing and payment etc. will also be included. The basis for this application is the supplier's product file which can be updated on a day-today basis from the distribution centre if necessary and which contains all the relevant …