What is the description of electronic data interchange (EDI)?

Electronic Data Interchange (EDI) is a technology that enables companies to exchange business documents electronically in a standardized format. This allows for seamless transaction processes, reducing the need for paper handling and manual entry, which can be error-prone and time-consuming. EDI standardizes the format of data, ensuring that different systems can communicate effectively with each other; this is crucial in supply chain management where timely and accurate information is essential for decision-making and operations.

In the context of supply chain efficiency, EDI enhances the speed and accuracy of order processing, invoicing, and shipping notifications, thus improving overall operational performance. This standardization fosters better collaboration among trading partners, leading to streamlined business processes and cost reductions.

The other options do not represent electronic data interchange. Flexible Manufacturing Systems (FMS) relates to manufacturing processes, Coordinate Measuring Machines (CMM) are used for measuring physical geometrical characteristics of an object, and Radio Frequency Identification Devices (RFID) are used for tracking and identifying items through radio waves. These concepts, while important in the context of manufacturing and supply chain logistics, do not pertain to the electronic exchange of business documents as EDI does.