unit 31 criteria 2-3&4
TRANSCRIPT
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Unit31:E-businessOperationsSession9
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LearningOutcomes
2-3DescribetheuseofVANs(ValueAddedNetworks)forEDI
2-4Evaluatetheadvantagesofusingoftheinternetforb2b
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Topics
ReviewofLastsession
GroupReport
Lecture
ValueAddedNetworks,VANs
Advantagesofusingtheinternetforb2b
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ReviewofLastSession
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TopicsDiscussed
The purchase process of b2c
The purchase process of b2b
Activities of professional buyer
Different company purchases
Risks
Electronic Transactions Electronic Data Interchange
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TestofBaselineKnowledge
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TestofBaselineKnowledge-Review
WhatareValueAddedNetworks(VANs)?
WhatarethefunctionsofVANs?
HowareVANsrelatedtoEDI?
NameastandardEDItransactionset;aVAN;aTradingnetwork
HowdoVANsearn?
WhatareTransactionLogs?
Whataretheadvantagesofusingtheinternetvs.VANsforb2b
WhatisXML?
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DescribetheuseofVANs
(ValueAddedNetworks)forEDI
CRITERIA2-3
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ValueAddedNetworks
StandardEDItransactionsets Specialistnetworkorganisationsservice
BuyerSupplierNetwork
VANschargeforservices
Availabilityoftransactionlogswitha3rdpartyinvolved
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ValueAddedNetworks
A private network used by a company primarily forrouting, storing and delivering electronic datainterchange (EDI) messages.
A value-added network (VAN) also provides otherservices such as message encryption, retransmission andsupport.
VANs may be operated by large companies for efficientsupply chain management with their suppliers, or byindustry consortiums and telecom providers.
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CreationofVAN
A VAN is created when a network provider leasescommunications lines from a common carrier (such asa telephone company), enhances them by addingservices and improvements that facilitate business-to-business application integration, and then resellsthe network connection and services to others for afee.
Company-created
Third Party
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FunctionsofVANs
1. providesEDItransactionservices,2. security,
3. documentinterchangeassistance,
4. standardmessageformats,
5. communicationprotocols,and
6. communicationparametersforEDI.
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Diagram
VAN
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Diagram
Client 1
Client 2
Client 3
VAN
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VANsandEDI VANs emerged as a way to connect supply chain participants.
They offered store-and-forward mailboxes that providedprotocol conversion, security and guaranteed delivery.
EDI VANs proved to be too costly for most businesses.Expensive setup fees associated with EDI software andexorbitant per-transaction fees.
When the Internet and the World Wide Web entered thepicture, along with standards like ebXML.
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WSNDiagram
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TransactionStandards ANSI ASC X12 (American National Standards-
X12) X12 is a standard that defines manydifferent types of documents, including airshipments, student loan applications, injury and
illness reports, and shipment and billing notices.
The ANSI (American National StandardsInstitute) assigned responsibility for development
of EDI standards to the ASC (AccreditedStandards Committee) X12 organization in 1979.
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PRODUCT/PRICINGTRANSACTIONS
PriceSalesCatalog 832PriceAuthorizationAcknowledgement/Status 845
Specification/TechnicalInformation 841RequestForQuotation 840ResponseToRequestForQuotation 843ElectronicBidForm 833
ORDERINGTRANSACTIONSPurchaseOrder 850PurchaseOrderAcknowledgement 855PurchaseOrderChange 860PurchaseOrderChangeAcknowledgement 865OrderStatusInquiry 869OrderStatusReport 870ContractAward 836
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MATERIALSMANAGEMENTTRANSACTIONS
PlanningSchedule/MaterialRelease 830
ShippingSchedule 862ProductionSequence 866ShipNotice/manifest(ASN) 856ReportofTestResults 863MaterialSafetyDataSheet 848
ContractAward 836SHIPPING/RECEIVINGTRANSACTIONS
ShipmentInformation(BillofLading) 858ReceivingAdvice 861
Non-conformanceInformation-DispositionTransaction,Cause/Correction
842
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INVENTORYMANAGEMENTTRANSACTIONS
InventoryInquiry/Advice 846ProductTransferandResaleReport 867
ProductTransferAccountAdjustment 844ResponseToProductTransferAccountAdjustment 849FINANCIALTRANSACTIONS
Invoice 810
FreightInvoice 859Paymentorder/RemittanceAdvice(EFT) 820Lockbox 823FinancialInformationReporting 821CONTROLTRANSACTIONS
FunctionalAcknowledgement 997ApplicationAdvice 824TradingPartnerProfile 838
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TransactionStandards UN/EDIFACT UN/EDIFACT (United
Nations/Electronic Data Interchange forAdministration Commerce and Transport) is aninternationalsetofEDIstandardsthatarepublishedby the United Nations Trade Data InterchangeDirectory(UNTDID).
The standards include syntax rules and
implementation guidelines; message designguidelines, directory sets defining messages, dataelements,andcodesets,amongotherdefinitions.
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PRODUCT/PRICINGTRANSACTIONS
PriceSalesCatalog PRICATPriceAuthorizationAcknowledgement/Status ATHSTS
Specification/TechnicalInformation PRDSPERequestForQuotation REQOTEResponseToRequestForQuotation QUOTESElectronicBidForm --
ORDERINGTRANSACTIONSPurchaseOrder ORDERSPurchaseOrderAcknowledgement ORDRSPPurchaseOrderChange ORDCHG
PurchaseOrderChangeAcknowledgement ORDRSPOrderStatusInquiry ORSSTAOrderStatusReport ORDREPContractAward --
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MATERIALSMANAGEMENTTRANSACTIONS
PlanningSchedule/MaterialRelease DELFOR
ShippingSchedule DELJITProductionSequence --ShipNotice/manifest(ASN) DESADVReportofTestResults QALITYMaterialSafetyDataSheet --
ContractAward --SHIPPING/RECEIVINGTRANSACTIONS
ShipmentInformation(BillofLading) IFTMCSReceivingAdvice RECADV
Non-conformanceInformation-DispositionTransaction,Cause/Correction
NONCON
TradingPartnerProfile PARTIN
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INVENTORYMANAGEMENTTRANSACTIONS
InventoryInquiry/Advice INVRPT
ProductTransferandResaleReport SLSRPT
ProductTransferAccountAdjustment --ResponseToProductTransferAccountAdjustment --
FINANCIALTRANSACTIONS
Invoice INVOIC
FreightInvoice IFTMCSPaymentorder/RemittanceAdvice(EFT) REMADV
Lockbox --
FinancialInformationReporting --
CONTROLTRANSACTIONSFunctionalAcknowledgement CONTRL
ApplicationAdvice BANSTA
TradingPartnerProfile PARTIN
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TransactionStandards Open-EDI The ISO (International Standards
Organization) and IEC (International ElectricalCommittee)aredevelopinganEDI referencemodelunderajointcommitteecalledOpen-EDI.
The goal of Open-EDI is to allow electronic
transactions among "multiple autonomousorganizations" that may or may not have any prior
businessrelationships.
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GSX f l GE I f ti
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GSXformerlyGEInformationSystems
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IBMGlobalServices
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Rationale
Many enterprise buying organizations find thatmanaging their supply base can be very challenging andexpensive if to maintain their own site.
Point-to-point communications in multiple technologiesrequired by different suppliers are expensive andtime-consuming to manage.
Buyers can utilize transaction capabilities for reliabletranslation and delivery of business documents usingtrading networks.
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SampleTradingNetworks
Ariba.com Connectory.com
TriangleAreaBuyer-SupplierNetwork
BuyerSupplierConnection Tradekey.com
Bayantrade.com
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Charges
Set-upFee($5,000to$10,000) MonthlyFee($100to$1,000)
Consumables($1,000to$10,000)
PerKilobyteused($0.50to$1.00) Pertransaction(%oftransaction)
Subscriptionfee($2,000to$10,000)
MaintenanceCharges(20%ofset-up)
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UNRules Toensurethevalidityandenforceabilityoftransactions
completedthroughtheuseofEDI,Section2.6requirestradingpartnerstostoreandretain:
(a)theMessagescommunicated(bothsentandreceived)and
(b)recordsrelatingtothoseMessages.
Thoserecordsmayincludehistoriesorlogsofthecommunicationsaswellasdatabasescontainingextracts
ofcertainportionsoftheMessages.
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UNRules Therecordstoragerequirementswhichmaybespecifiedin
theTechnicalAnnexshouldbedevelopedbaseduponthecommercialorlegalrequirementsunderwhicheachpartyconductsitsaffairs.
Theobjectiveistoprovidethenecessaryrequirementswhichcanbestassureeachtradingpartnerthatbothrequiredanddesiredrecordswillexistwhenneeded.
Nationallawsandregulationsmaydifferconsiderablyregardingthereadability,durabilityorintegrityofelectronicrecords.
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UNRules Nospecifictimerequirementsorstorageformatsare
indicated;however,tradingpartnersareencouragedtospecifydetailsregardingbothmatters,inorderthattheappropriaterecordscanberecoveredforreviewintheeventofanyfuturedisagreementsordisputes.
Otherwise,theAgreementimposesnorestrictionsonthe
internalproceduresusedbyapartytocomplywiththerequirementsofSection2.6.
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TypesofTransactionlogs
Paperprintout Datastorage(softcopy)
Reportformat
Rawdata
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ThirdParty
VANsresponsibility 3rdpartydatastorage
Buyerandsellerhardandsoftcopies
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Advantages of usingthe internet for b2b
Criteria2-4
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Advantages astandardcommunicationnetworkacrossthe
worldwhichcanbeusedforb2bbetweenbuyersandsellers,
avoidingthecostschargesbyVANs
Security makingitaccessibletoorganisations
enablingamorecompetitiveglobalmarketplace.
Otherdevelopments
Standard Communication
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StandardCommunicationNetwork
Thereisnostandardcommunicationorprotocol
ProgrammersutilizeaProtocolSuiteoracombinationofstandard
communicationprotocols
Standard Communication
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StandardCommunicationNetwork
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AvoidingCostbyVANs Minimalcharge
Minimalornosubscriptionfee
Percentageoftransactionislower
Lowermonthlysubscription
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Security Networklayersecurity
IPsecProtocol Electronicmailsecurity(E-mail)
PrettyGoodPrivacy(PGP)
MultipurposeInternetMailExtensions(MIME) Firewalls
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Accessibility GlobalAccess
24x7access
Anyterminal
AuthorizedPerson
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Competitiveness Strategicalliances
Up-to-date/minutedecisions
Fluctuatingpricesandterms
Expedientdeliveryofservices
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OtherDevelopments-XML Aflexiblemarkuplanguageforstructured
electronicdocuments.
XMLisbasedonSGML(standardgeneralized
markuplanguage),aninternationalstandardforelectronicdocuments.
XMLiscommonlyusedbydata-exchange
services(likeblogfeeds)tosendinformationbetweenotherwiseincompatiblesystems.
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END OF SESSIONSeeyounextmeeting