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Managing Business To Business (B2b) E-Commerce using EDI Assignment
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Task 1:Electronic Data Interchange (EDI)
1.1 Start of EDI. State two EDI Standards.
In 1960, Ed Gilbert developed a concept of electronic communication between the US army supply chains. This was necessary as the transfer of data enabled the supply of products for the US Army. In the mid-1990s, EDI had become a highly used concept in supply chain management. Thus, EDI played a vital role in the process of globalisation in those early days. In the modern world, this concept of electronic data interchange has become impossible to leave out. This procedure enables one or more organisations to contact each other and clarify their information regarding transaction procedures.
However, organisations can not directly implement any method before testing it out. They require to have set standard procedures in their work processes. Having set standards ensures that organisations are able to follow procedures that will enable them to troubleshoot and resolve their issues quickly. Two of those standards are as follows:
- ANSI 12: The Accredited Standards Committee (X12.org, 2021) is an ANSI 12 subsidiary committee that helped establish the ANSI 12 standard format. This was set as the global rule for exchanging information among organisations regarding their data exchange rules. This set of rules is repeatedly updated to ensure that they are in line with the modern age (Sunstrum and Howard, 2021)
- EDIFACT: Edifact is a procedure that states the standard procedures of conversation between two multinational organisations regarding their process of conversation. These interchanges are typically non-human; there needs to be a method to enable this process in simple terms (Enkhuizen, 2021). Thus, EDIFACT is used to send and receive information regarding procedures that keep organisational procedures running.
1.2 EDI Facilitating E-commerce
The modern world has become too fast for old-world techniques of data exchange. Letter-writing still exists; however, it cannot support the quick transactions required by high profile businesses. Thus, organisations use electronic data interchange methods to make conversations and resolve issues (Geeksforgeeks.org, 2021). Ed Gilbert was able to understand the advantage that this up-gradation would hold for the US Army. Transfer of products for the troops on time would ensure their well-being, and thus, the ordinary people would also be able to live in peace. Business organisations quickly noticed the massive advantage of this process to the army and were interested in implementing these procedures in their everyday functioning.
1.3 Types of VAN (Value added networks) and benefits over Peer to Peer
There are several types of VANs
- One-to-one
- One-to-many
- Many-to-many
- Secure
- Building costs
Vans are more valuable than peer to peer as they allow for better error correction and improve exchange methods.
Task 2: Electronic Fund Transfer
Electronic fund transfer is the process of transferring capital digitally, without the use of printed paper money.
2.1 Common types of payment methods. Their use in online banking, instant payments and contactless payments.
The following are commonly used fund transfer methods in payment processes:
These methods are used in online banking processes as it enables simplistic transfer of funds by online procedures. These methods have become extremely useful in the present day and age as organisations use these techniques to transfer funds among themselves. This ensures that people can transfer funds without the other party not always being involved in fund transfer. Among all these methods used worldwide, Cheques were the first fund transfer process that did not require hard cash. Even though this process is not completed online, cheques played a valuable role in initiating this type of fund transfer process. Organisations nowadays use that initial concept that was provided by cheques regarding contactless payment methods. After the pandemic hit our planet, there was a stark rise observed in the use of contactless payment techniques (BBC, 2021). By using these methods of online translation, organisations such as banks have been able to speed up their procedures and ensure that they are able to resolve their fund-related issues quickly.
2.2 Implications of Cryptocurrency
There has been a steady rise in the use and valuation of cryptocurrency over the past years. The use of these digital currencies across the planet has the ability to involve developing nations in becoming more financially stable countries. This can be achieved by the use of cryptocurrencies since their transaction procedures are far more transparent. Thus, poorer nations do not have to worry about corruption in these procedures, as contracts have to be respected since they will be insured . Thus, they will not be left behind in the process of development and growth (Mikhaylov, 2020).
Most Cryptocurrencies are built on blockchain technology; this helps ensure that the value of these digital currencies is not lost by maintaining their security from thefts . This enables crypto to be among the most fast-growing ideas on the planet. Blockchain cuts out intermediaries; thus, there is far less money wasted in paying them. Apart from this, factors related to fraud are radically reduced by the use of this blockchain technology (BBC, 2021).
Task 3: Online transaction processing (OLTP)
Online transaction processing enables the execution of massive numbers within a database transaction procedure completed by many people. This procedure is advantageous since it enables the easy transaction of several procedures simultaneously.
3.1 Key difference between OLTP and OLAP in terms of usage. Challenges in use of OLTP
Online Analytical Processing or OLAP is a software tool that is used to analyse data to make appropriate business decisions. This procedure enables organisations to take several insights regarding the procedures that would not have been visible in case these tools were unavailable.
Online Transaction Processing or OLTP enables transitions that occur on a day to day basis. Systems like ATMs (Automatic Teller Machines) are OLTPs (Geeksforgeeks.org, 2020).
There are several obstacles in the functioning of an OLTP system, which may be reasons for problems in case of organisational development. Nevertheless, these challenges are unavoidable, and they have to be lived with at present. The present OLTP system may be upgraded in future to enable solving current problems that are harming this process of online transaction. The challenges associated with an OLTP system are as follows:
- Lack of Concurrency control
Multiple users can access the same data and alter it according to their liking; thus, this process can keep getting modified. Lack of stability in case of data will cause problems related to final results in case they are not resolved (Geeksforgeeks.org, 2019).
- Unsuitable data for decision-making
OLTP systems can help organisations acquire several data; however, this data does not help make decisions of any organisation. OLAP systems are far more suitable for extracting informative data (Multiple users can access the same data and alter it according to their liking; thus, data within this process can keep getting modified. Lack of stability in case of data will cause problems related to final results in case they are not resolved (Geeksforgeeks.org, 2019).
3.2 Pros and cons of using centralised and decentralised payments
Having a centralised payment system ensures there is more security in the transaction procedures of an organisation. This enables organisations to have an increased speed of payment and reduced transaction costs. On the other hand, there are pitfalls related to this procedure as there is an increase in the whole business process (Bitdegree.org, 2018).
Having a decentralised payment procedure enables organisations to have a highly cost-effective procedure since there are no middlemen in their work procedure. On the other hand, the lack of intermediaries also increases pressure on the people performing said transaction procedure. All procedures of transaction are completed by the end-users (Consensys.net, 2018).
Task 4: Inventory management systems
4.1 Using a Cloud-based server to upgrade present system
In the case of our institute, there is a requirement of handling procedures related to organisational development. There is minimal IT related infrastructure in the two buildings our institution consists of. Thus, instead of using ERP to automate procedures of the whole institution, this organisation should look to move towards cloud-based software. This will enable our institution to become more capable in remote handling of our day to day procedures. Several issues may arise in the daily handling of our working procedures that may not be entirely resolved by using automated software. However, having a cloud-based system will ensure that these procedures are resolved remotely by people of this organisation. Thus, facets that require attention of the people in the organisation will be taken care of.
If members of the organisation can resolve issues remotely, these organisations will save a massive amount of time. Thus, people will be able to improve their work procedures and improve their workflow techniques. Supply chain management is not a favorable option in the case of our institution since there is a shortage of members required to handle all the functions required in supply chain management. That process is highly labour intensive and requires several person-hours to carry out functions. All deliverables of a project, right from the acquisition of raw materials up to the production of final output, require several members' involvement in a supply chain management group. Thus, this is not suitable for our institution.
4.2 Challenges faced in implementing Cloud-Based processes
Firstly, organisations that are looking to improve their work processes by the involvement of cloud services need to have a set idea regarding their present setup. There will be a large sector of the IT department that will need to be upgraded. These factors of improvement will need monetary funds to be poured in. This needs to be taken care of by the organisation, thus preparing for an upgrade is a severe challenge.
Another issue that this organisation was facing was the lack of technological know-how. This factor was solved by involving organisation members in learning IT-related factors in cloud computing (Carnegieendowment.org, 2020). There will always be problems related to bringing in new technologies, however, overcoming these factors will ensure that members of the organisation are able to improve their ability to learn new techniques.
Task 5: Supply chain management
5.1 6 types of ERA in the development of supply chain management
The following are the six types of ERA involved in supply chain management:
- Efficiency of the chain
- Quickness of the chain
- Agile
- Flexibility of the chain
- Continuity
- Customizability
5.2 Processes in supply chain management
- Strategic planning: Strategic planning in a supply chain refers to understanding long term solutions and long-term requirements from an organisation. This enables an organisation to plan and be ahead of the curve while solving their issues related to organisational development procedures (Hbr.org, 2021). Organisations need to plan ahead as a lack of planning will ensure that their organisation will perish.
- Demand planning: Demand planning in supply chain management is a process of predicting essential requirements for any organisation. Several organisations look to move forward and understand all the facets that may allow them to grow into becoming a far bigger organisation in future. However, only the organisations that can understand their future will be the ones that can flourish.
- Supply planning: In a management chain process, various processes ensure organisations are able to understand future procedures of procurement, manufacture and distribution of projects. This process is based on demand forecasts of the projects. Thus, organisations need to understand the possibilities of forecasting the changes in their supply processes.
- Procurement: The process of procurement in supply chain management is the total effort that is put into acquiring supplies for a project. Procurement involves several factors such as Sourcing supplies, Managing the suppliers, Contract sealing and more.
- Manufacturing: Manufacturing is the process of transforming raw materials into a final product that will enable organisations to sell them to buyers. Manufacturing process depends upon the demand of the product as well as the quality of the product.
- Warehousing: A warehouse is a place where products are stored after production. This is a process that occurs just before sending out the finished products. Warehousing is an essential phase of supply chain management as the products have to be kept in a system that ensures their quality is preserved. There are several problems that have arisen due to online shopping, as warehouses are falling short in numbers (BBC, 2021).
- Order fulfilment: Order fulfilment is the complete process of receiving an order; processing is based on the requirement of the products and the person who ordered them. This process is followed by storing the product and finally dispatching it to the organisation or individual who ordered it.
- Transportation:The process of transportation involves sending the final product from warehouses to their destinations.
5.3 Application processes
Factors of JIT, MRP and TQM will be involved in this whole process by ensuring that members of the organisations carefully manage all the procedures. All procedures have to be observed keenly from procurement to final sale.
Reference list
BBC, 2021. 6 ways blockchain will revolutionise banking and commerce . http://www.bbc.com/storyworks/banking-on-innovation/blockchain-revolution
BBC, 2021. Contactless payments dominated as lockdowns eased . https://www.bbc.com/news/business-58341582
BBC, 2021. Online shopping boom drives rush for warehouse space . https://www.bbc.com/news/business-57547389
Bitdegree.org, 2018. Centralized vs Decentralized: What’s the Difference? https://www.bitdegree.org/crypto/tutorials/centralized-vs-decentralized
Carnegieendowment.org, 2020. Cloud Governance Challenges: A Survey of Policy and Regulatory Issues . https://carnegieendowment.org/2020/11/09/cloud-governance-challenges-survey-of-policy-and-regulatory-issues-pub-83124
Consensys.net, 2018. Decentralized Exchanges vs. Centralized Exchanges: Overview https://consensys.net/blog/news/decentralized-exchanges-overview-benefits-and-advantages-over-centralized-exchanges/
Enkhuizen, M.J., 2021. Innovative Data sharing in logistics, migrating from UN/EDIFACT to the OpenTripModel (Bachelor's thesis, University of Twente).
Geeksforgeeks.org, 2019. On Line Transaction Processing (OLTP) System in DBMS . https://www.geeksforgeeks.org/on-line-transaction-processing-oltp-system-in-dbms/
Geeksforgeeks.org, 2020. Difference between OLAP and OLTP in DBMS . https://www.geeksforgeeks.org/difference-between-olap-and-oltp-in-dbms/
Geeksforgeeks.org, 2021. What is EDI (Electronic Data Interchange)? https://www.geeksforgeeks.org/what-is-edi-electronic-data-interchange/
Hbr.org, 2021. Future-Proofing Your Organization . https://hbr.org/2021/09/future-proofing-your-organization
Mikhaylov, A., 2020. Cryptocurrency market analysis from the open innovation perspective. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), p.197.
Sunstrum, A.L. and Howard, F.H., 2021. Strategic alliances enabled by electronic commerce.
X12.org, 2021. About x12 . https://x12.org/about/about-x12
