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In the past year, we have seen many changes in what is now widely called E-commerce. The face of the landscape has changed greatly and is expected to continue to change at an even faster rate. This article is being sent to the publisher almost exactly six months before it will be presented to the International Conference in New Orleans. What changes can we expect in those six short months? I am not sure if anyone really knows. As a result, the presentation that will be made in New Orleans may differ substantially from this article.

It is difficult to select which aspect of E-commerce to address. With its literal explosion, one could fill the allotted space for this article with just topic headings. At the end of the first draft, I had listed over 40 key topics, and more were turning up every week. I had to cut some­where. Hopefully, none of the areas I cut will become instrumental in the future of E-commerce.

In the last year—no in the last six months—the nature of the rela­tionship of the Internet to the supply chain has changed. Back then, when we talked about E-commerce, we were talking about business-to-consumer (B2C). Today when talk about E-commerce, we are talk­ing about business-to-business (B2B). (Have you noticed, that as we approach the end of the millennium we have started to run out of TLAs [three-letter acronyms]? We are now using numbers.) The definition of supply chain management also has changed substantially. Much of the supply chain literature today leads you to believe that the supply chain resides primarily within a company. The APICS Dictionary gives its definition as "(1) the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies; (2) the functions within and outside a company that enable the value chain to make products and provide services to the customer." The functionality provided by E-commerce has expanded the scope of the supply chain to the point where it extends from the final customer to the initial vendor. In other words, we might call the new supply chain model "ashes to ashes, dust to dust." We will look at the impact of these shifts in greater detail later.

HISTORY

Before we can try to identify where we are going in the future, we first must understand the past. Therefore, let us look at the history of both the Internet and of electronic data interchange (EDI). It might surprise many of you to find out that the Internet is in fact older than EDI.

History of Electronic Data Interchange

EDI was developed in the '70s and received its greatest boost when personal computers became readily available. This was because the early systems required mainframes and a third party to provide com­munications. With the availability of PCs, that all changed. EDI has been used to support the automotive industry, but it was shown to have value in other industries. It has grown to support most types of transac­tions that occur between companies.

Pros

  It is here and it works: this is one of the strongest things that can be said about a system—any system. Why turn your back on something that works, and something that works reasonably well? The Ford Model T works well, but it does not give us the utility that more modem automobiles provide. Many of us would like to own one, but few would want to drive one as their primary vehicle.

  Long-established relationships: the trading partnerships that EDI
requires have been long established. These trading partnerships
work; no development or training is necessary.

Cons

     Inflexible: one of the major negatives affecting EDI is that it is inflexible. Many "futurists" suggest that the only way to survive in the next century is to be flexible. They believ e, as I do, that those companies and systems that are not flexible will not survive.

     Limited application: EDI has limited application, because of its very nature. It is limited to specific trading partner relationships—only those companies with established relationships can communicate. This works well if you have a fixed number of vendors or customers. If you do not, it is possible that time and small customers are overlooked. Marketing opportunities have been and will continue to be missed. This may be overcome with the use of new technologies that provide an Internet front end to EDI.

As a result of the two issues above, EDI has not grown signifi­cantly. It has narrow market application. With the onset of the Internet, I do not expect that EDI will penetrate many new markets. This will be addressed in greater detail later in this article.

EDI is currently used extensively in the automotive and retail areas of our economy. It will continue to be used, but application will be limited because of its inability to change. The trading partner relation­ships will limit the ability for EDI to change rapidly.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 11


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