April 2011 | Sponsored | Thought Leaders

Ensuring Successful System Integration

Tags: Logistics I.T., Electronic Data Interchange (EDI)

Jesus David Rodriguez is President, Magaya Corporation, 786-845-9150

Q: What factors make software system integration necessary?

Rodriguez: Variety among parties is a fact in the supply chain. Because of that variety, there is no software system that covers the immensity of combinations and scenarios that can occur in today’s supply chain. In the same way, there is no software right for every supply chain requirement specific to each business.

This leads to one conclusion: Supply chain software needs to integrate with other systems. As volumes increase and deadlines get shorter, the necessity of communication between systems in the supply chain is more evident.

Q: How is technology today helping to solve this?

Rodriguez: A few decades ago, electronic data interchange (EDI) was created as the standard. In the early days of using EDI, trade documents were transferred over expensive private networks that only larger companies could afford. The Internet made EDI more affordable, but there was still a high toll on converting business transactions to EDI documents.

Today, XML technologies have bridged that barrier. A small company can set up system-to-system communications (including both the old EDI standard and new XML-based technologies) via XML with a small investment and the right software.

Q: What are the benefits?

Rodriguez: The return on investment for this type of implementation can be seen within the first two months in data-entry labor savings alone. But the real improvement is in service quality. The number of errors, calls, and returns will be reduced significantly, and customers will be happier, which is the ultimate goal of any business.

This is excellent news in these tough times, when everyone is looking to cut expenses and keep service levels high. If you are a supply chain or logistics manager for a small or medium-sized company, and you have not currently established system-to-system communication with all your business partners, start discussing it with them. It’s easier to get this done now than it used to be. As you gain experience, write your own implementation guidelines and make them a requirement for each new business partnership you establish.

When selecting a new software application to address any aspect of your supply chain, also keep in mind that one of the most important features of supply chain software is the ability to communicate with others. To keep up with today’s demands, a good system should have out-of-the-box communication with other companies using the same system, and easy setup of communication with companies using other systems.