Unformatted text preview: er and invoice, and hence it has some severe limitations for information
sharing. For example, EDI only handles rigid text formats. This may be sufficient in
standard transaction processing, but would not be adequate to handle other kinds of
information sharing, such as database tables, bar codes, images and HTML pages.
Fourth, EDI is batch-oriented, working only in operational windows. Finally, small and
medium size companies often are discouraged by the high cost of installing EDI.
Recently, innovative companies are extending the boundary of EDI and
developing mechanisms that directly connect information systems of multiple companies.
In addition, service companies now offer EDI on the Internet, thereby lowering the cost
of EDI usage.
3.2. Third Party Model
The Third-Party Model involves a third party whose main function is to collect
information and maintain it in a database for the supply chain. For example, in the
Apple-Fritz example, Fritz plays the third party role in information sharing. (Note that
Fritz has a role of managing transportation as well as information processing. Thus, if the
former role is highlighted, the Apple-Fritz model may be categorized as the Information
The third party company may also provide services for transactional processes.
As an example, consider Instill Corporation (www.instill.com), which serves as an
electronic interface between food service operators (e.g., restaurants) and food
distributors. A member operator can browse the catalog on the Instill system and issue a
purchase order to the Instill system. The purchase order is then forwarded to
corresponding distributors. Instill manages the transaction cycle - catalog management, ordering, invoicing and payment. In addition to transactions processing, it offers a
variety of information services like accounting, sales analysis, order tracking, rebate
tracking and alert of special sales and promotional campaign. Distributors also receive
various types of aggregate data that c...
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