Traditional B2B — Electronic Data Interchange

Abstract

As outlined in Chapter 2, e-Business has been around for longer than you might think. The first moves in that direction started back in the 1980s, particularly in the retail industry, in the form of EDI — Electronic Data Interchange. Then, as today, one of the main drivers for this development was the so-called ‘supply chain’, starting with the raw materials through to the finished goods. For most organizations, particularly in retail, this is where the heaviest costs are — in buying, distributing and warehousing the stocks of goods to go on the shelves. It is often said that in retail, the key to success lies not so much in selling, but in buying wisely. That is why the supply chain is so important. Before e-Business, many organizations had large numbers of staff occupied solely in sending out orders by letter, telex, phone or fax — a very expensive, time-consuming and error-prone operation. This also made it essential to keep large stocks in warehouses, at great expense, in order to provide a buffer for the delays and uncertainty in the whole logistics process. As one of the pioneers of EDI, Tom McGuffog, put it: “Uncertainty is the mother of inventory, and the grandmother of under-utilized resources” ¹.