The Impact of Technology

Chapter 15

Distribution has been referred to as the function of moving goods and services from the manufacturer to the consumer. While the movement of the physical product itself is not directly facilitated by the WWW, the process of moving this product has been changed forever. To move a product, information must flow ñ and the faster this information travels the better. American industry in its ever growing quest for economic efficiencies has moved, and whole heartedly accepted the principle of Electronic Data Interchanges or (EDI).

The principle of EDI recognizes that information has cross- functional usage. In this instance information about distribution, may be relevant to a variety of functional areas such as logistics, accounting etc. Therefore information relative to a shipment is entered in one standardized format. The idea being, if all information is keyed only once at the initiation point, all that is to be added at points down the line is the information generated at those points, thus replacing the traditional method that duplicated information and created information redundancies. With EDI, the information is integrated into one standardized format beginning with the purchase of raw materials all the way to incorporate final shipment and even the reverse channel. Therefore EDI results in not only economic savings due to increased efficiencies but also yields current information which by itself is a source of competitive advantage.

This impact is more profound in the instance of information products that are digital in format (books, music, computer programs). These products can be distributed directly (downloadable with a payment mechanism) at a very low cost. In cyberspace the marginal cost of adding a subscriber to a newsmagazine is minimal for example sending 100 newsletters in comparison to a 1000 costs virtually no more than sending one.