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I read this week that over the last couple of years Dow Chemical has significantly increased the amount of automated EDI and B2B E-Commerce transactions they have implemented between their SAP system and key suppliers using a managed EDI services provider. What were Dow Chemical’s goals for this effort?

  • increase business process efficiency
  • improving data quality
  • reducing human error
  • to identify and eliminate system and process errors
  • proactively notifying customers regarding exceptions
  • enabling users to meet customer expectations and increase overall satisfaction
  • gain better control over their procurement process
  • eliminate transactional barriers
  • empower their staff to focus on business issues, rather than order processing

It is interesting to note how many of their goals were simply to reduce errors and problems with the quality of their processes. Often these issues were the result of errors introduced into the system by bad data and human error. The more data validations upfront, and the reduced “human touch” on the data once it is in the system, the less errors. Once the data is good, all kinds of filters, alerts and exception monitoring can be implemented. None of these features work correctly if the data is bad, or can be made bad somewhere in the process.

Dow is migrating hundreds of key suppliers to an EDI managed services provider. It is interesting to note that Dow Chemical’s has had a mature internal EDI department for many years now. Their stated reason for migrating to an EDI managed services provider are the following:

  • to centralize global purchasing operations (consolidation of P2P)
  • to standardize global purchasing operations (standardize and simplify)
  • allows Dow to quickly add new trading partners
  • simplifies maintenance by standardizing on a single platform
  • simplifies ERP upgrades – a single connection, through the managed service provider, to external trade partners eliminates complexity and paves the way to an easy SAP upgrade path

Not stated by Dow, but common to EDI managed services providers is the ability to reuse EDI connections that have already been used by other companies on the network. This can simplify roll-out efforts and reduce costs.

 

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