EDI and The Amazon Website

EDI and The Amazon Website

EDI facilitates the sharing of business information via standard interfaces (Sekhar, 2010). For example, the EDI would be used to share data between a vendor and a retailer. In 2010, several retail companies, such as supermarket chains, started using EDI to enhance business transactions (Sekhar, 2010). This move also enabled businesses to reduce costs incurred in the traditional EDI system. The Amazon website contains multiple retailers who sell different products to a wide variety of consumers. Therefore, the electronic data interchange would be used to share data between orders and shipping to the end consumer. This would allow customers to access information such as product availability and price availability, fill in data on order forms, and make payments. On the other end, a retailer would have information on the products paid for and the shipping address. Also, the vendor would know how many products of the ordered items are remaining and the reorder level.

The EDI feature on websites enables the sharing of various business documents. However, the main documents shared between businesses include orders and invoices (Yunitarini & Santoso, 2018). The EDI could be used just like the email. Formal business information is communicated between businesses through email; before the internet era, the information would be shared through conventional mail. However, sharing some information via email could slow business operations compared to sharing via EDI. This is why business information crucial to business performance is shared via EDI. For example, a business that operates on an e-commerce model would be more efficient if it shared information from one system to another using EDI (Yunitarini & Santoso, 2018). Especially information regarding customer orders and invoices. EDI facilitates the instant transfer of information between electronic systems without requiring much data entry. An email system requires constant checking of emails to ensure that an urgent email is identified on time. Unlike in EDI, the information shared could be updated in the destination system instantly if the two companies are in agreement and API configuration is done.

Businesses need to use EDI because fast and efficient communication is required in today’s business world. Electronic communication through EDI has made business transactions more efficient, especially in the supply chain industry, as observed in the past 20 years (Yunitarini & Santoso, 2018). The business activities on the Amazon website are similar to those of the supply chain industry, making it a good fit for EDI. According to Yunitarini and Santoso (2018), EDI has facilitated competitive success for businesses. Therefore, companies that adopted the use of EDI at an earlier date have had a competitive edge. Especially those in the supply chain industry. Amazon incorporates numerous retailers hence, has a large customer base. Making it important to have an effective business information-sharing system. The retailers who use the Amazon website to sell their products could use EDI to connect their system to that of Amazon. They would then implement API configuration on their systems to ensure that the required business information from Amazon systems is instantly updated (Yunitarini & Santoso, 2018). This would ensure that the respective retailers respond to business operations on the Amazon website in good time. Hence making business processes efficient. Also, Amazon would not be required to store large amounts of paperwork as business records for future reference. Another advantage is that manual reconciliation of records would not be necessary.

References

Sekhar, S. C. (2010). Applications of electronic data interchange technology in retail business: advantages and barriers to implementation. Journal of Business and Retail Management Research (JBRMR), 4(2), 93-98. https://jbrmr.com/cdn/article_file/i-5_c-36.pdf

Yunitarini, R., & Santoso, P. B. (2018). A literature review of electronic data interchange as electronic business communication for manufacturing. Management and Production Engineering Review, 9(4), 117-128. https://journals.pan.pl/Content/104019/PDF/12-

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EDI and The Amazon Website