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  • 6.3.4-E-COMMERCE AND SUPPLY CHAIN MANAGEMENT-CENTRALLY AVAILABLE DATA VERSUS STRAIGHT THROUGH PROCESSING (STP)

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  • Centrally available data versus straight through processing (STP)

     
     

    While e-marketplaces provide electronic functions and may replace back-office functions within each of the individual trading partners, the data remain on the servers at the e-marketplace. For certain functions it is ideal if the various parties in the supply chain have access to these centralized data. However, certain types of data need to be held in the databases of the participants themselves, for reasons of corporate security or enterprise resource planning (ERP): production scheduling, accounting, contract and position management systems and so on, that are outside the scope of an e-marketplace. Such data need to be transferred between the different players.

    In paperless trade this is done not through physical transfers of documents or rekeying the data, but rather through electronic messaging of the data, between participants or via the e-marketplace.

    If the electronic data are in a standard format, which can be recognized by participating systems, information can be transferred directly from computer to computer. This is also known as straight through processing (STP). This means the data do not have to be intercepted by users for verification and subsequent re-entry in the system (retyping or rekeying*) but can be integrated directly into the individual user's application or database.

    When combined with the central functions provided by the e-marketplaces, STP allows for efficiencies and cost savings at all functional levels of the supply chain. Administrative tasks are reduced, and supply chain visibility and efficiency between trade chain partners is increased.

    * A McKinsey study (2000) found that the error rate in rekeying may be as high as 50% for some documents - that is half of all the documents circulating contain at least one error.