2012 KATZSCAN N

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December 2012

Twas the holidays of the season

And how could I not remember?

When the calendar pages flip

To the month of December


I set upon my task 

At end-of-year time

To craft a melodic message

And convey my message in rhyme 


These are moments to reflect 

On the events of the year 

And think of friends and colleagues 

Some that are far, some that are near 


Hong Kong and London

Were my two big trips 

It was quicker to go by plane 

Than taking slower cargo ships


For a holiday gift

No further do you need to look

Than the August release of 

My supply chain fraud book


Katzscan has grown on Linked In

And is now on Facebook and Twitter

Holiday candles reflected glow 

Cause shiny tinsel to glitter 


To my friends and supporters 

To those with whom I link 

To my newsletter subscribers 

Who read what I think


Regardless of how long I’ve known you

A lot, a little, or somewhere in between

Next year is the beginning 

Of Katzscan year seventeen


Enjoy your holidays

Happily, merrily, and with good cheer

If the world doesn’t end in 2012

Then I’ll see you all next year

November 2012

There is more value than just charging to help. 


I have always been happy to try and help when I can. (A good friend of mine who does astrology readings would say this is typical of my Zodiac sign, Cancer.) This usually entails giving away free advice…sometimes a lot of it. That may seem a little crazy because a consultant like me gets paid because we know things that most regular folks don’t know. But I have always believed in trying to do the right thing and sometimes people just need to know in what direction to go. To make someone sign a contract and bill them for less than an hour of my time seems rather ridiculous. The people I help are most gracious and appreciative. I know they’ll probably forget about me not long after my phone call or e-mail but that’s okay: it is good to know I helped someone.  I sure do appreciate it when someone helps me. 


In October I received a rather desperate e-mail from Wilson Electronics, a manufacturer of cellular telephone booster products. They were struggling to understand some retail vendor compliance requirements and were reaching out for help. I called them up and we had a nice chat that lasted about 20 to 25 minutes which – in their words – solved their problem in the “same day” and allowed them to ship product. 


One week later I received another e-mail from Wilson Electronics but this one was quite different: I was asked if they could gift me one of their products in appreciation for my time and advice. Wow! What an unexpected surprise! After some sales help I picked their MobilePro® product so that I can boost cellular signals wherever I go in both a vehicle and a building. 


In good times and bad don’t stop extending yourself when someone asks for a little bit of help. Good customer service shouldn’t require a customer but may result in one either directly or by referral. It is a message I practice as best I can, and now one I can shout out with a great cellular signal. 


For more information about Wilson Electronics and their line of fine cellular booster products, please go to http://www.wilsonelectronics.com.  

October 2012

Barriers to business intelligence.

  

The August 13, 2012 edition of Information Week magazine had an interesting article on data visualization. Enterprises can struggle with business intelligence and data analytics due to the sheer volume of data, growing beyond gigabytes to terabytes and petabytes, across various platforms such as enterprise resource planning, sales force management, contact management, point of sale, and marketing & social media. 


The article noted that barriers to adopting business intelligence and data analytics solutions include:


· Standardization: Getting all the different user groups to agree on a single product and its features and functions.

· Scalability across the enterprise. 

· Integration to all the various platforms and applications. 

· Lack of enterprise staff technical savvy in utilizing a data analytics product.


The leading barrier to business intelligence product adoption: poor data quality. 

From an enterprise standpoint I certainly understand the problem this causes: business opportunities may be overlooked and lost due to a failure to have a comprehensive perspective on information. Sometimes you don’t always know what you are looking for when you set out on a quest: data analytics reveals patterns, possibilities, and problems heretofore hidden. In an age of fast and fierce competition data analytics is an absolute necessity. 


The problem of poor data quality is a compound one when I consider supply chain fraud detection and reduction: a lack of data quality can hamper the analysis of information to investigate situations for potential fraudulent behavior. In my supply chain fraud business model I highlight technologies that – especially when used together – provide a good foundation for detection and reduction. But the more complex the enterprise’s business model, the more software platforms there are likely to be: platform connectivity and data integrity across platforms are both two important factors to address. 


An enterprise’s data is at the very core of its ability to be successful, dynamic, intelligent, competitive, and other adjectives. If you know of a company – maybe your own – that is suffering from dirty data, let me know: I keep my cleaning supplies close at hand. 

September 2012

Fishy fraud.


“Fraud can occur anywhere along the supply chain, beginning on the boat that hauled the fish to the distributor to the fish shack that offers a grouper sandwich for a bargain price.”


The sentence is a quote from an article that appeared in the Monday, July 23, 2012 South Florida Sun Sentinel newspaper about fish fraud. The article highlighted the results of a study by Oceana, the largest international organization focused on ocean conservation, who found that one in three fish servings at 60 South Florida restaurants and markets were in fact substitutes. Ninety-six samples in total were collected. 


The study’s chief author marine scientist Kimberly Warner stated: “Given that Florida is a state that tests regularly, I was wondering if we would find any fraud at all. Why in the world would people think they can get away with this? That it’s happening is quite shocking.” 


As I read the article I started thinking about what types of frauds could be occurring: 


· Deceptive identification and labeling.

· Deceptive pricing at any or all points in the supply chain given that each entities’ involvement (fisherman, distributor, and retailer) must mark up from the price at which they purchased.  Different fish sell for different prices, especially to the end consumer at a restaurant. 

· Testing cover-up, either falsifying results or creating fictitious results when no testing was actually performed. 

· Taste cover-up by the restaurant if they were trying to mask the substitution with seasonings and sauces. 

· Health & safety issues. The article noted that one problem with fish substitution is that it can pose a health risk. In one instance grouper was replaced by king mackerel, a fish that federal and state authorities warn women of childbearing age to stay away from due to king mackerel’s high levels of mercury. 


“Full traceability of the seafood supply chain from boat to plate, combined with verification and accountability, is needed to ensure that the seafood sold in the United States is safe, legal, and honestly labeled” wrote the study’s authors. Verification of the type of fish can be done with genetic testing as a Nova Southeastern University genetics class proved last year. 


Whether checking if food has been tainted or substituted the technology is out there to ensure the integrity and safety of our food supply chain. I think the benefits in fraud reduction and increased health & safety would outweigh the additional costs, but until the scales tip in favor of the consumer, let the buyer beware.

August 2012

My first book is published!


I have got some really big news to share: My first book, Detecting and Reducing Supply Chain Fraud,has been published by Gower Publishing (http://www.gowerpublishing.com) and its affiliated company Ashgate Publishing (http://www.ashgatepublishing.com/). The official publication date is August 8, 2012. 


This has been a 2 ½ year journey from concept submission through approval, manuscript development, editing, and proofing. Through trial and tribulation, during days, nights, and weekends, I was writing away in between teaching and consulting and everything else as this was the biggest priority on my plate.


Why would I engage in such an encompassing endeavor? 


I have a message to shout out to the world. Since 2007 through magazine articles and presentations I have been delivering my unique perspectives on supply chain fraud detection and reduction to diverse audiences both domestically and internationally (Mumbai and Hong Kong to-date) with rave reviews. Writing a 76,000 word book was a challenge to be sure but one that I knew I must undertake and successfully complete. 


While I am not the first person to ever discuss the terms “supply chain” and “fraud” together I think it would be fair to say I have taken ownership, (Google “supply chain fraud” and the results will speak for themselves). I have formalized and solidified the term into a single yet multi-faceted business model that well goes beyond just the typical conversation of procurement fraud which, I have discovered, is usually what most people consider to be supply chain fraud…yet it is so very much more. 


This is a business model that redefines the supply chain and unifies the concepts of technology, operations, audit, compliance, law, ethics, and governance to guide an enterprise to better detect and reduce fraud throughout the organization, domestically and internationally, regardless of whether it is being perpetrated from the inside or the outside. 

July 2012

So, let us see what is in the news these days…..


…Amazon air conditioned a 615,000 square foot distribution center in Pennsylvania as part of a reported $52M program to cool distribution centers around the country. At the Pennsylvania warehouse the Occupational Safety and Health Administration (www.osha.gov) reported the heat index (a measure of heat plus humidity) broke 100 degrees multiple times in 2011 even going above 110 degrees at times. In response to this effort Donna Hoffman, co-director of the Sloan Center for Internet Retailing at the University of California in Riverside stated: “It behooves them to not be responsible for negative publicity if they can control it.” But Sucharita Mulpuru of Forrester Research has a different opinion, stating: “Amazon ships a lot of electronics and food now. It’s not good to have that stuff in extreme temperatures. I would like to think there was an element of humanity to the decision, but there’s nothing in Amazon’s history or in Jeff Bezos’ public persona that would lead me to think that was the driver of the decision.”  


In November and December 2010 fire alarms at this same facility forced employees outside into freezing temperatures. Apparently unable to get their coats beforehand and without hats, gloves, and blankets for protection some workers were taken to a hospital due to extended exposure to below-freezing temperatures. 


…Foxconn CEO Terry Gou, in response to his company’s apparent labor violations and working conditions, stated: “What’s wrong with sweatshops? We toil hard with blood and sweat, so long as we don’t break any laws. I believe in reaping what you sow.”  The working conditions at Foxconn are blamed for resulting in employee suicides. The U.S.-based Fair Labor Association (www.fairlabor.org) interview of 35,000 Foxconn workers uncovered labor violations including extreme work hours and unpaid overtime. After interviewing 170 workers and visiting several Foxconn factories, the group Students and Scholars Against Corporate Misbehavior (http://sacom.hk) reported “The front-line management continue to impose humiliating disciplinary measures on workers.” Foxconn is Apple’s primary contract manufacturer. 


…As a $24M Mexican bribery scandal continues to unfold, Wal-Mart CEO Mike Duke who, according to The New York Times was a senior executive during the bribery scandal and knew what was going on, recently informed a gathering of employees that integrity was a core value of the company, stating “It’s doing the right thing, every single day.” 


…After the February 2010 death of killer whale trainer Dawn Brancheau at SeaWorld Orlando the Occupational Safety and Health Administration (www.osha.gov) spent six months investigating the killer whale training program. Presiding Judge Ken S. Welsch issued a ruling in support of the OSHA recommendation that future shows have no physical contact between trainers and the whales. (Physical contact between humans and the whales can continue during relationship-building exercises and for medical treatment.) Welsch was particularly harsh in his assessment of SeaWorld management when they cited a lack of awareness that working with killer whales could be hazardous. 


He rebuked an executive who stated that SeaWorld could predict whale behavior with 98% accuracy, and wrote: “Because it is not part of SeaWorld’s corporate culture to acknowledge unpredictable behavior by its killer whales, it must necessarily find that its trainers are implementing the program incorrectly. SeaWorld holds trainers to a near-impossible standard set by upper management, who engage in a form of Monday-morning quarterbacking. Any trainer unfortunate enough to have to file an incident report is subject to second-guessing by his or her superiors, who will always find the trainer did something wrong, otherwise there would be no incident to report.” 


…Walmart reportedly takes out life insurance policies on its employees (extending even after employment) with the goal of collecting upon the employee’s death, hedging that the employee will not have a will and thus no court-appointed administrator, even if the employee had immediate family members. 


I can understand how executives at publicly traded companies are under pressure to meet the short-term outlooks of financial analysts and shareholder expectations of continual dividends while ensuring their companies are planning for long-term growth and success, and that these perspectives are something of a dichotomy. I can understand how the drive to be #1 can be intoxicating and financially rewarding. I also understand how protective one can be of a core tenet of a business model especially when it separates you from your competitors. I can’t say I’m a supporter of companies looking to profit or recoup expenses from the death of their current or past employees, but I can understand the black-and-white of the cost-benefit analysis. 


I can understand all it but I cannot accept any it. The business of America is business, to quote former president Calvin Coolidge, but that buck has to stop when laws, ethics, morals, values, confidence, and integrity are breached. Profits attained at the cost of health and safety should be forbidden.  


I think that public companies – and some private ones too – should institute a new CEO role, Chief Ethics Officer, who would have full knowledge of all company goings-on and the authority to stop a company from doing the wrong thing. Someone who can lead a company down the path of doing what is right, what is just, what is fair. 


It is time consumers start to give their appreciation – and money – to companies who act ethically and legally, sending a message that doing the right thing is good business, and that bad behaviors are being noticed and will not be tolerated. 


Sell without selling-out: that’s doing the right thing. It is high time business leaders practice what they preach and act as examples of the messages they convey. The world will be a better – and still plenty profitable – place for it. 

2012 KATZSCAN NEWSLETTERS

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June 2012

Infragard.

  

Earlier this year I joined InfraGard® (www.infragard.net) – a public/private partnership with the United States Federal Bureau of Investigations (FBI). The purpose of InfraGard is to provide the FBI with “front line” eyes and ears regarding threats to infrastructure assets (such as utilities and transportations hubs) and facilitate the sharing of intelligence and information. I was aware of InfraGard having received a security in the workplace certification from the organization but I was not a formal member until this year.


The timing of my membership could not have been better as shortly after my acceptance was approved InfraGard had their first-ever national conference right here in South Florida. The focus of the one-day event was to highlight how the public and private sectors are working together to meet current and future security threats. By my estimation the attendee count was approximately 250 and I met plenty of attendees from out-of-state. Speakers represented both private sector companies and federal and state government agencies. 


While all the sessions and speakers were interesting, I was particularly drawn to a statement by one of the presenters when he said that the physical world is being replicated in cyberspace. Consider that what was once the domain of the physical world – commerce, finance, enjoyment/entertainment, socializing, addictions, scams & frauds, credentials (such as resumes), and social engineering – are all now deeply entrenched in what the online world has to offer. 


Inasmuch as cyberspace has created a multitude of opportunities, this creates a unique set of challenges in terms of authenticity, health, integrity, safety, and security. As several speakers pointed out from their various vantage points, these challenges are only getting more complex as they become more intertwined and technology advances beyond the speed at which security and risk professionals can keep up with it. Even something as seemingly innocuous as a telecommuting employee brings a whole set of security concerns to the forefront. 


It is somewhat difficult to remove oneself completely from some of these perils. Sure, you don’t have to be on various business and social networking sites. Personally that would result in something of a withdrawal from society. Professionally, employers tend to check Linked In®, Klout® and other web sites to learn details of a candidate behind the resume, so not being “out there” professionally might damage a job search. 

It wouldn’t be difficult to get really paranoid about how much data there is out there and how much it is shared (sold) to be combined with other data and profile a person. 


Nor would the concerns be far from the truth: there is more happening with our detailed data then we realize. Just as the prudent person will take practical safety and security measures in the physical world, so to should such measures be taken in cyberspace. We can’t fully withdraw from the virtual world developing around us any more than we can withdraw from the physical world we exist in. We simply have to learn to live in both and keep our wits about us as we travel in each world and traverse from one to the other. 

May 2012

The devil is in the detail data. 

  

I really enjoyed reading the January/February 2012 edition of Supply Chain Brain (www.supplychainbrain.com) magazine. The issue was titled 2012 Supply Chain Management Resource Guide – A Look Ahead and contained several industry-expert write-ups in each of 28 different knowledge categories. 


One recurring theme I found was the important aspects of data analytics between traditionally silo applications such as Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), Customer Relationship Management (CRM), Sales & Operations Planning (SOP or S&OP), and others. It is not enough to analyze data within one application: the data must be analyzed across the organization as it flows through and manifests itself within the standpoint of different applications and different user perspectives. 


The challenge of course is that the data must exist for it to be analyzed. I’m not talking about entity information such as customers, vendors, or products. Those entities are – if you will – like molecules. What I’m referring to are the characteristics that exist at a more atomic level: the customer’s zip code or Standard Industry Classification code; what categories of products and services are provided by a vendor; the difference between the same item sold in light, medium, or dark blue. 


Confirming what I already knew as I listened to the other speakers when I was not presenting at an anti-fraud conference in Hong Kong in March, fraud detection is done using data analytics by focusing on a variety of entity attributes and looking for anomalies and patterns that conflict with normal behavior. 


Paraphrasing an old saying: the devil is in the data. 


Establishing meaningful data characteristics can be an intense, introspective exercise into what truly defines an organization’s entities. The benefits are an ability to analyze business performance at a new and deeper level of detail, sometimes close to the point of prediction. Close enough is not often good enough especially in a highly competitive environment or during difficult economic situations where wrong decisions can be more costly than just the money wasted. Instinct is important but information is invaluable. 


In a sidebar called A CEO’s View On Analytics that was part of the article titled Sell It! in the March 26, 2012 issue of Information Week magazine, Steve Schlecht, CEO of Duluth Trading Company was quoted as stating: “Today my biggest challenge is this area of analytics.”


If you know of a company – maybe your own – that is struggling with detailed business performance analysis, then have them contact me. I’m happy to help and I’ll bring my microscope.  

April 2012

Goal distractions.


Over the past several months I have read more discussions in the news with regards to distracted driving. Studies have suggested that distracted driving – mostly due to texting and talking via cellular telephones – is comparable to driving while under the influence of alcohol. The United States Department of Transportation has a web site dedicated to distracted driving awareness – www.distraction.gov – that includes statistics on fatalities due to distracted driving.


Without downplaying the seriousness of the injuries, damages, and deaths caused by distracted drivers, there is something else going on here too: quite simply distracted drivers are taking longer to get to their destinations because they are not focusing on their driving. And from my unscientific though I believe pretty accurate observations it only takes between four and eight distracted drivers strategically spaced apart to slow down hundreds if not thousands of vehicles on multi-lane highways. As such distracted drivers are imposing their inefficiencies on countless others.  


There is a cause-and-effect here: the more distracted the less effective in the ability to perform individual tasks. (I’ve noticed this with my university students.) With more attention focused on the non-productive task there is an increased obliviousness to the important aspects of the productive task, e.g. being aware of vehicles in blind spots before changing lanes. 


Organizations that are constantly distracted by exceptions to normal routines or processes can become absorbed in those exceptions: important resources are diverted and this can result in lost opportunities. Important aspects of the business will not get the attention they deserve or require. The organization wants to move forward quickly but simply cannot because they are a distracted driver. It might take only a few distractions to grind the entire organization’s progress to a near halt.  


So what is the solution? My message to distracted drivers is to put down those cellular telephones and concentrate on driving: let’s all get to our destinations safely and timely. I know this will take some willpower but consider the catastrophic consequences of failing to do the right and prudent thing. In addition by getting to our destinations more quickly there will be extra time to make those phone calls and check those e-mails safely.  


Organizational distractions can be caused by internal operations discord, supply chain interruptions, and software applications that are not able to produce the necessary analytics from which qualified business decisions can be made. 


If you know of an organization – maybe your own – that needs aid in “hanging up” on the distractions then please give me a call and let’s chat about how I can help. Just don’t call me while you’re driving. 

March 2012

The first step to problem solving is asking the right questions.

  

In a January 3, 2012 article by Mark Z. Barabak that appeared in my local South Florida Sun Sentinel newspaper about the Iowa GOP caucuses there is a quote by Michael Dimock, associate director of the Pew Research Center: “When you ask people if they want a bigger government doing more or a smaller government doing less, it’s almost exactly down the middle.”


No wonder there is so much indecisiveness in the answer: I think the question itself is wrong. Maybe the size of the government wouldn’t matter if it just did what the country needed it to do without pandering to polarizing politics. Instead of a smaller or a larger government, how about one that just functioned better? (Compromise does not equate to capitulation!) And included in functioning better toss in one that is right-sized: perhaps some areas of the government need to grow and perhaps other areas need to shrink. 


Similarly a question constantly asked – often I think by pollsters – is whether someone supports the U.S. military in <insert the name of a foreign country here>. 


Let me state unequivocally that I support the U.S. military no matter where they are. 


The cook in Kentucky should have the best spatula available to ensure our troops are well-fed. The combat solder fighting wherever should have the best offense weaponry and the best defensive protection on the planet. And those solders should have lifetime access to the very best medical care, whatever is needed and when it is needed. And this support should extend to their immediate families holding down their own personal forts until their deployed family members are returned home safe and sound. 


Whether I believe the U.S. military should be in one place or another is a wholly separate and distinct issue that is far apart from my complete support of the U.S. military no matter where they are. Again, I think the basic question of support of the military is wrong.


It is so very important to ask the right questions. Posing the right questions has been vital in reframing my clients’ problems and identifying the root causes of chaos. Once the true source of the disruption is discovered, an appropriate solution can be implemented. 


To know what the right questions are to ask requires intensive listening when my clients tell me their troubles and keen observations as I review their operations and software applications. I take in the nuances of the conversations and focus at what I refer to as the atomic level of both data & processes to target – and subsequently solve – the actual problems at their core. The individual improvements collectively better the organization holistically. 


If you know of a company – maybe your own – that is unable to resolve its problems maybe it is because they are asking the wrong questions. If so, contacting Katzscan and asking how I can help is the right question to begin with. 

February 2012

The cost of forgiveness versus permission.

  

In the December 12, 2011 issue of Information Week magazine, Editor Rob Preston wrote a rather scathing article about the waste from the proposed merger between AT&T and T-Mobile. Mr. Preston calls the acquisition attempt “…a microcosm of this country’s economic atrophy: billions of dollars set aside and countless hours of work consumed to pander to regulators and special interests rather than create anything of value.” 


On December 20, 2011 I read in my local newspaper that the AT&T/T-Mobile merger was dropped by AT&T who will take a pretax charge of $4B for the breakup fee. One could argue that, as part of the merger process, people were employed and paid for their work which therefore helps the economy, but Mr. Preston’s point is clear and well-taken: imagine how much value could have been achieved for the $4B plus all the money paid out in salaries, expenses, and fees. 


What surprises me, as noted by Mr. Preston, is how AT&T could not have known that federal regulators – the Department of Justice and the Federal Communications Commission – would have a problem with the deal. For all the expertise and resources at its command and history as a guide, it seems that someone should have anticipated the regulator resistance and either recommended scuttling the deal at the start or submitting a modified merger plan that would pass federal regulator scrutiny. I don’t know anything about the process of submitting mergers to federal regulators but couldn’t someone at AT&T have simply asked federal regulators for an opinion first before embarking on this nearly one-year long and expensive journey? (If the answer is “no” then federal regulators need to update their procedures and permit a discovery process.) 


This news story has reminded me of a saying (that I’m paraphrasing) that seems to be the mantra of some organizations: Why ask for permission when you can ask for forgiveness?


Charging ahead without due diligence, without team consensus, without effective communications, without holistic perspective, without alternate insight, and with pride and politics in place is a sure-fire recipe for destruction and damage to an organization. 


Money is wasted, time is fretted away, valuable opportunities are lost, and competition gains footholds. The effective leadership of senior management is needed to set the tone of the organization – a.k.a. the Control Environment for those of you Sarbanes-Oxley COSO compliance framework fans out there – and create an atmosphere that recognizes haste makes waste but without suffering paralysis by analysis. This delicate balance is very achievable but I often find out-of-reach from organizations mired in the same tired acceptance of their status quo.  


In my experience it takes fewer resources to make good decisions than to recover from bad decisions. Connecting the disconnected dots up front is far more efficient and effective than dropping the ball time and time again. 

January 2012

Foundation technologies still hold their ground. 

  

The November 28, 2011 edition of Information Week magazine made we wax nostalgic a bit.


I learned that John McCarthy, the person who coined the term “artificial intelligence” passed away in October. According to the article by Andrew Binstock, Mr. McCarthy designed the Lisp programming language for artificial intelligence in the late 1950s and Lisp’s “functional programming model is at last gaining traction in mainstream programming”. 


I saw three full-page ads by Perforce (www.perforce.com) that used the tag line “The best ideas evolve” and showed contrasting images of old and new processors, cameras, and video game controllers. Clever. 


I read an interesting article by Capers Jones and Olivier Bonsignour about software quality inspection. The authors state that IBM developed formal code inspection processes in the 1970s that are still in use today. The article informs while inspections increase front-end costs they forever decrease downstream costs.  The authors say that projects with formal inspections realize lower maintenance costs of approximately 45%. 


Formal inspections are a “deeper dive” than just software testing. 


It seems like what was old is now truly new or at least gaining acceptance and recognition. 


My thoughts floated to one of my core consulting specialties in which I have 20 years of experience: Electronic Data Interchange (EDI). For all the talk approximately 10 years ago about XML being the EDI killer, EDI is just as if not more pervasive in e-business as ever before. In a May 21, 2008 article titled “EDI and Darwin – Survival Of The Fittest” by Steve Keifer in the Ecommerce Connexion newsletter, Mr. Keifer states that EDI’s resiliency and growth can be attributed to several characteristics: EDI is mature (20+ years old); EDI is industry-neutral; EDI has been proven to work; EDI is inexpensive these days; EDI is independent of network protocol; and EDI is a standard and was the only e-commerce standard for a 10-year period.


In my experience I’ve helped clients with EDI and integration to their ERP systems in the following verticals: retail consumer products, pharmaceuticals, marine, electronics, and book publishing. While the EDI standards have evolved to meet new business needs and situations (e.g. Y2K when the year part of dates went from two digits to four digits), the structure of EDI documents and the format of the transaction records has remained consistent to what I remember from my first introduction to EDI. 


As technology has lowered an objective barrier to EDI implementation, there still remains a critical element in the subjective integration of EDI to the ERP system. 


Further, the introduction of EDI will typically require changes to business processes as operational procedures will be affected: this is because the necessity of EDI is usually just one of many vendor compliance requirements. EDI equates to closer supply chain relationships – which can lead to sales growth for suppliers – with good operations return-on-investment potential from both up-stream and down-stream supply chain perspectives. Organizations who are not taking full advantage of this tried-and-true technology should really reconsider and take a serious look at the benefits EDI brings.