CONTENTS Foreword to the Indian edition ix Acknowledgements xii Summary xiii 1: A strategic tool to integrate the supply chain 1 What is EDI? 1 EDI is the province of senior managers 3 EDI is an enabling tool and lever for change 4 Strategic use-Ihe key 4 Japanese role model in supply chain management6 Reviewing business methods 7 A valuable tool in any industry 7 EDI as part of the engine of enquiry 8 EDI fits into TQM . 9 Many factors in strategic change 9 EDI changes the way a company operates 10 Compulsory EDI from different sides 13 Pentagon insists on EDI 13 Compulsory customs clearance 14 Japanese competition-the spur 15 Cooperation-the key 15 Success of groups, failure of adversaries 18 Techniques that complement EDI 19 Chapter 2: Fundamentals of supply chain management 21 Supply chain crucial to business success 21 Maximising the surplus in the supply chain 22 Elements with different surpluses 23 Moving up the chain 24 Sharing the enlarged surplus in the chain 24 Co-makership instead of buyer/seller 25 EDI enables supply chain management 27 Paying for materials management 27 Eliminating losses in the long supply chain 28 Scope for improvement ai each interface 28 Need to take out idle lime29 Delays greater in international chains29 Instant reduction in lead time with EDI30 EDI from sales outlets through the organisation to suppliers31 Automated cycle 31 EDI attacks weak spots in supply chain32 Bar codes complete automation loop32 Streamlining the supply chain 33 Management commitment needed for bar codes, too34 3 Specific benefits of EDI 35 Reduced administration costs35 Chaos with paper and distributed ordering36 Offices less efficient than factories 36 Reduced paper, reduced costs38 Excessive cost of paperwork39 EDI eliminates the need for invoices41 EDI improves cash management42 Profitable practices retard change 42 More timely information for the cash manager43 Payment terms to suit new methods45 Important issues', security and routing 45 Payment advice through the banks, or sent separately?46 Cost of EFT depends on system48 Reduced stock brings savings in manufacture, retail48 US industry paid price of pioneering50 Europe gained from later start 54 Transport: no more a black hole 54 Chapter 4: How to implement EDI successfully 56 Need to addre>,s decentralisation issue 56 Corporate iifproach even if decentralised57 Start with global pricing 58 Certification of vendors 58 Corporate approach-key to success60 Supra-departmental or supra-divisional control61 Corporate vs divisional approach62 Appoint business user as EDI champion62 Success comes with a multi-disciplinary team63 Assess legal issues64 Assess your own company 64 Assess resistance to change 65 Important aspects of planning for EDI 66 Be sensitive 10 human issues66 Analysis then education67 Seminars for management of vendors69 Keys to success with pilot project69 EDI in parallel with paper to start only71 Sift priorities when moving to full-scale implementation72 The 80:20 rule72 Determine which messages are critical72 Three stages in EDT project73 Expanding the EDI community74 Regular auditing of results75 Changing the company culture76 Chapter 5; Industry review: case examples77 Construction 77 Skanska uses EDI from building to suppliers 77 Finance 79 First Chicago pioneers EDI79 Rabobank moves to fee-based services 80 Manufacturing 82 Quick response at Levi Strauss 82 Mack Trucks-Dana alliance depends on EDI84 EDI brings life-saving changes to Rover 85 Texas Instruments' worldwide corporate EDI 89 Volvo uses EDI and bar codes to raise performance94 Publishing96 1PC Marketforce cuts lead time % Retailing 97 Kmart lurns tit strategic use of EDI 97 Tesco'i dramatic metamorphosis 100 Shipping (movement of goods)105 DHL's replacement parts service 105 ECT at the centre of wide EDI community 106 Singapore speeds customs clearance with EDI108 Chapter 6: Signposts to the future 111 Unique advantages of EDI 111 Systems to expand EDI-X.400 and Edipost 111 Rapid growth assured112 Liberal telecommunications foster growlh 115 Billion dollar market in the USA and Europe by 1995115 Interactive EDI 116 Instant answers for travel agents117 EDI in the year 2000118 Trend to team approach 118 Automated supply chain 119 Streamlined administration 119 Databases valuable assets 120 Non-invoice settlement 121 New business opportunities 121 Standards for EDI and products overcome barriers to trade 122 Removal of processes brings new business122 Instant book publishing123 Chapters customised Co suit user 124 Appendix I: Technical overview or EDI for managers125 Appendix II; EDI services in India136 Appendix III: Glossary of EDI terms and acronyms151 References155 Index156