Electronic Data Interchange system or EDI system is a well planned system designed for transmission of data between two or more organizations by electronic means. It has been recently adopted by a number of business and non business organizations worldwide due to its high accuracy and almost no data loss during transmission. There is no human intervention in this system which has increased its accuracy to a higher extent.
Traditional vs. EDI order placement
Let us consider a case when a customer wants to place a purchase order with a company. Now there are two conditions possible.
- If the order is placed without EDI system
- The buyer will fill a purchase order and print it on a special form
- The printed purchase order will be sent to the vendor though postal mail
- The vendor receives the purchase order and posts the same into their order entry system for further processing
- The buyer has to call the vendor periodically to know the status of his order
- The entire process may require about 5-7 days in general
- The buyer will review his purchase order and fill it online
- The order is converted into electronic form through EDI system and transferred to vendor electronically within few minutes
- The vendor's EDI system receives the order and updates the same into order entry system
- The entire process involves around 8-10 minutes and less involvement of human hands, thus avoiding errors
This way the EDI system provides us with higher speed of data transmission and hence higher work efficiency.
Major Benefits of EDI system
- Faster Processing
- Competitive Advantage
- Improved Customer Service
- Better Trade Relations
- Enhanced Cash Flow
- Inventory Control
- Streamlined Processing
EDI system in Indian Customs Department
In December 1992, the National Infomatics Center and the Central Board of Excise and Customs conducted a study at various custom houses across the country. This study proved to be the base for computerization project in the customs department. A further detailed study was conducted in April 1994 at the Delhi Customs House which helped to collect the requirements needed to develop the software for the department.
The pilot project which thought about the computerization of customs department was launched in year 1994-1995. This project which was started at the Delhi Customs House included Electronic Data Interchange as the key element for connecting all the parties involved in the international trade to the customs house. After the tremendous success of Electronic Data Interchange system at the Delhi Customs House, the customs decided to implement the services to all other houses as well.
Scope of improvements in Indian Customs EDI System
- The data collected through Electronic Data Interchange system is being stored locally on the servers at the corresponding custom stations. Every customs station has a standard server for storing data which is later shared on the main server. The customs department must centralize the server which will make the data integration easier, faster and more efficient.
- The customs department must concentrate more on establishing more powerful and reliable servers at its stations to ensure round the clock processing.
- Any errors from the software must be removed to make its processing faster.