The evaluation, adoption and diffusion of electronic data interchange (EDI) by retail firms operating in South Africa

Master Thesis


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University of Cape Town

Two fundamental elements of the retail industry are customer service and merchandising. Customer service entails meeting customer needs and wants, while merchandising is the art of selecting the combination of goods that meets those needs and wants. One of the strategies open to retailers is to move in the direction of suppliers by creating partnerships with those suppliers. The system of Quick Response (QR) distribution embodies this strategy. QR is analogous to Just-in-Time (JIT) manufacturing, where the objective is to speed up the entire order and replenishment cycle. The potential results are enhanced customer service through greater responsiveness to customer demands and reduced costs through lower inventory holding costs and lower opportunity costs (in terms of lost sales when goods are not in stock). Electronic Data Interchange (EDI) is an Information Technology (IT) that can be used to facilitate a system of QR. EDI can be used as an Inter organisational System ((lOS) that spans the retailer and supplier organisations and communicates structured messages, such as orders and invoices, between the trading partners. Apart from creating efficiencies in the flow of information between retailers and suppliers, EDI applications can be integrated with internal systems and the entire order and replenishment cycle can be redesigned to improve customer service.

Bibliography: pages 176-192.