Asda anticipates major savings from switch to web-based EDI

US retail giant Wal-Mart's roll-out of web-based electronic data interchange technology has made the company's links with...

US retail giant Wal-Mart's roll-out of web-based electronic data interchange technology has made the company's links with suppliers more efficient.

UK subsidiary Asda could soon follow suit, creating an upheaval in supply chain technology.

The roll-out, planned for October, follows a US-wide implementation last September which saw thousands of suppliers linked together using software operating to the newly-interoperable AS2 transport standard.

Wal-Mart's US roll-out was seen as a milestone in the adoption of web-based EDI and was hailed as being able to cover its own costs within months.

Frank Kenney, an analyst with Gartner Group, said, "Wal-Mart will benefit by the use of one internet-based standard. There will be no need to maintain large numbers of discrete telephone lines and banks of modems.

"All supplier information will be in AS2, which will make it infinitely easier and cheaper to support and it will be simpler to provision new suppliers."

Web-based EDI cuts the costs associated with traditional EDI. Instead of using a value-added network, where a network supplier provides the network, technical support and manages the encryption and non-repudiation of EDI messages, with web EDI a business will do much of the work in linking with its suppliers.

Web-based EDI has been possible for a few years, but two developments allowed Wal-Mart to embark on its roll-out. The first was the widespread adoption of the AS2 transport standard, which provides certificate-based encryption for security and data compression. The second was a guarantee of AS2 product interoperability by the Uniform Code Council and Drummond Labs.

The AS2 standard is HTTP-based and can transport flat-file EDI and other formats such as XML. It supercedes AS1, which was based on SMTP and routed messages to a specific mailbox.

UCC-Drummond interoperable AS2 does away with the need for uniform EDI software installations between tier one and supplier sites, with a web browser or generic AS2 client software. AS2 software tracks and manages the certificates that encrypt and decrypt EDI documents.

Wal-Mart engaged IBM and Sterling Commerce to provide the hardware, software and services. Roy Lee, senior director for marketing at Sterling Commerce, said a major consideration for Wal-Mart would be the costs saved due to the different skills needed for the new type of messaging.

"Wal-Mart moved from an X.25 network to an internet-based system. That is where the cost issue is - the skills needed to maintain an X.25 network are not available, but internet skills are. Modern technologies are cheaper and simpler to implement and maintain. However, suppliers must support AS2 as well as traditional EDI if partners demand it," Lee said.


UK firms that use web-based EDI

British Sugar

The company has estimated it will save between £100,000 and £350,000 in administration costs by switching to web EDI. It delivers in the region of 10,000 documents a year to UK Customs & Excise using XML and digital signatures

Argos

Argos orders are received by suppliers via a web browser which generates delivery notices and invoices in a format that complies with the retailer's EDI messaging requirements.

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