An emerging vision of Internet-enabled supply-chain electronic commerce

Increasingly, large retail companies are finding that the traditional visio n of Electronic Data Interchange, using a value-added network with expensiv e message-translation software and private wide-area networks, is unable to deliver its promise of paperless trading with their suppliers. Many compan ies have achieved a high level of EDI compliance from their large suppliers , but unsophisticated, usually small, suppliers generally remain outside th eir electronic commerce networks. This poses a serious problem, since the m ost important business reengineering benefits require 100 percent complianc e. Many large retailers are turning to the diverse range of new Internet-ba sed document distribution and presentation systems for ways of including un sophisticated traders in their replenishment systems. The traditional EDI vision resulted from the interaction of several aspects of the replenishment problem (available technology, transaction cost struc ture, the power of message-transmission intermediaries, notions about how t o achieve supply-chain cooperation, shared understandings of correct e-comm erce practice within the industry), but it achieved only partial supply-cha in compliance because it failed to take account of the differences between sophisticated and unsophisticated trading partners. This paper argues that the commercial availability of the Internet does more than simply provide a cheaper alternative document-transmission channel. Rather, by upsetting th e balance among the contextual Forces, it allows the emergence of a new vis ion of supply-chain electronic commerce featuring a backbone any-to-any net work of EDI-compliant, technologically sophisticated trading partners, with Internet-based subnetworks, centered on large players or third parties, us ing proprietary software, development tools, and message formatting to prov ide connection to unsophisticated players.