Question

As a very small manufacturer of nutritional products for race horses, Horse Health Products Company maintained information using bookkeeping and inventory management software and communicated with customers through e-mail and fax. As its business expanded, Horse Health Products's owner began to consider creating an electronic data interchange. What could an EDI system do for his company?

Answer 1

When the Horse Health Products Company used the email and fax for communication and maintained the information through book keeping and inventory management software, it takes more time and effort. They need dedicated employees for the process and hence it would incur more cost for the company. But if they use EDI system, an electronic version of the documents is created and is transmitted automatically to the intended recipients. There need not be dedicated workers for handling the mails as it is sent automatically. The time delay that may arise from human factors like ignorance, lack of ability to perform the job, error while taking orders etc is also eliminated here while recording the information or taking the orders. Hence this method helps to ensure more accuracy. The firm can reduce the chances of rework and the staffs can concentrate on other productive tasks which improves the efficiency. Avoiding use of paper through EDI systems also help the firm to reduce the pollution while saving money.