Differentiate Your Supply Chain Management Using Logistics Part 2
August 22, 2013
By
Ray Atia
Integration of logistics within SCM in a company streamlines EDI operations somewhat, as a continuous chain of information management can be built into an enterprise systems logic. Data management contributing to the flow of information may involve steps in the SCM chain such as inventory tracking, material handling and packaging, transportation and warehousing. Analysis of competencies for performance reporting of logistics and SCM in this regard is facilitated through EDI employment of information systems operations management, as each stage in the value chain will attribute data to forecasting of ordering, logistics and customer orders.
When companies tackle logistics as an exclusive process, EDI must respond by way of a segmented approach to data. Mapping data in cloud or Web based SaaS (software application as system) will demand more than one business process chain. While internal company functions are often more manageable as modular or separate standard business units (SBU) within an organization the emergence of Web based data storage, application, sharing and analysis of data has transformed the design-in features of business process management.
Logistics EDI and SCM present key challenges to any organization attempting to consolidate data with partners. Integration of core processes such as inbound transportation, material handling and customer service order operations has added more demand on data, and in turn set up EDI challenges in enterprise resource planning (ERP) and at the information systems level. An example of a data driven strategy is found in the upstream management of documentation on flow of production or goods. Information and inventory tracking data shared by trading partners requires in-transit visibility, visibility to vendor inventory and visibility to customer inventory. Strong EDI programs promote information sharing of this sort.
Where SCM builds on vertical logistics management activities, EDI services assist in the creation and coordination of those discretionary database records for an entire network of partners. Theoretical models of logistics in relation to SCM illustrate the different approaches to building EDI into an organization to suit its needs most aptly.
How EDI programs fit into the operations picture is really a matter of design. Once it is determined that an organization requires extensive vertical integration in two separate areas, or more horizontal integration of an entire operations value chain, the meaning, the volume and the future management of data and work processes can better be understood. Strategic coordination of other core departments such as marketing and production with logistics or SCM will follow. EDI improves supply chain and logistical capabilities.
The development of “universal” EDI is largely a question of automation at this stage of the game. Most EDI professionals are interested in innovations that will offer increased flexibility in EDI software and partner applications. Standardization in technology does not mean that legacy systems are not still posing challenge. Assessment of an organizations operations systems will inevitably reveal critical components to its business processes. Cost size often makes SCM the jumping off point for EDI programming. The relationship between SCM and ERP continues to be important, as Big Data drives cost savings found in SCM factor analysis.