EDI

Introduction to EDI… What is EDI?
 Electronic Data Interchange is the computer-to-
computer exchange of business data and
documents between companies using standard
formats recognized both nationally and
internationally.
 The information used in EDI is organized
according to a specified format set by both
companies participating in the data exchange.
http://www.x12.org/x12org/about/faqs.cfm#a1

History of EDI
 The general idea behind EDI was originated by
a group of railroad companies in the mid-
1960’s, in the United States.
 Much of the early work on EDI was driven by
the industry sectors for:
 transportation
 pharmaceuticals
 groceries
 automobiles
 banking
www.edi-guide.com/edi-history.htm

History of EDI It was not until the 1970’s, when work began
for national EDI standards.
 Both client and vendors input their
requirements to create a set of standard data
formats that
 were hardware independent;
 were unambiguous and could be used by all trading
partners;
 reduced labor-intensive tasks such as data-entry;
 allowed the sender of data to control the exchange
including receipt confirmation of by the other party
www.gotedi.com/term_history.htm

Advantages of EDI
 Lower operating costs
 Saves time and money
 Less Errors = More Accuracy
 No data entry, so less human error
 Increased Productivity
 More efficient personnel and faster throughput
 Faster trading cycle
 Streamlined processes for improved trading
relationships
http://www.edi-guide.com/edi-benefits.htm

Disadvantages
 High Dependence on the participation of trading
partners
 Costly for smaller companies
 Difficult to agree on standard to be used
http://www.edi-guide.com/risks-of-edi.htm

Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D

Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Original Model

Value-Added Network (VAN)
communications networks supplied
and managed by third-party
companies that facilitate electronic
data interchange, Web services and
transaction delivery by providing
extra networking services

Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Value-added
Network
VAN Model

Web Services
 Applications that use a universal language to send
data and instructions to one another, with no
translation required
 Uses the Internet, so most of the connection
problems are eliminated
http://www.computerworld.com/softwaretopics/software/appdev/story/0,10801,64099,00.html

Options
 EMAIL
 XML
 DIRECT ROUTING

Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Direct Routing

Who Needs EDI or a VAN?
Companies still need…
 Assistance with formatting problems
 Authentication of customers
EDI Standards…

ANSI X12 Standard Accredited Standards Committee (ASC) X12 was
created in 1979 by the American National Standards
Institute.
 It is a not-for-profit membership.
 Members meet three times each year to develop,
maintain and build on the EDI standards.
 Its purpose:
 To standardize the EDI formatting and exchanges
between companies in order to make the transfers
less time consuming, due to differences in
formatting and information presentation.
http://www.x12.org

Example of ASC X12
Note: Linefeeds and "(Continued)" notes inserted for clarity
ISA*00* *00* *01*123454321 *01(Continued) *012341234
*031016*2359*U*00401*987600111*0*P*:
GS*RA*123454321*012341234*031016*2359*987600111*X*004010
ST*820*987600111
BPR*C*77.77*C*ACH*CTX*01*234056789*DA*0099109999*(Contin
ued) *123454321*01*045678099*DA*1008973899*031016
TRN*1*0310162359 REF*AA*EDI6 N1*PR*WHIZCO OF AMERICA
INC N3*55 MEGAPLEASANT ROAD*SUITE 999
N4*SUPERVILLE*NY*10954 N1*PE*YOWZACO ENT*1
RMR*AP*1111111111111111*PO*11.11
RMR*AP*2222222222222222*PO*22.22
RMR*AP*4444444444444444*PO*44.44 DTM*055*031016
SE*000000014*987600111 GE*1*987600111 IEA*1*987600111

ASC X12 Standard
 These standards have been updated 5 times
since their creation in 1979,
 They are updated to include new facets in the
business world, or update any information that has
become obsolete.
 As the standards evolved, subcommittees
were added to ASC X12.
 In 1986 X12F was added for the Financial Industry
 In 1989 X12M was added for the Warehousing sets
 In 1991 X12N was formed for the B2B Insurance and
Healthcare needs.

ASC X12
 ASC X12 is looking to integrate with XML.
 1999 the first summit was held to draft policies and
procedures to create XML in ASC
 2002 the second summit was held to further
develop ASC/XML bonds.
(www.disa.org)
 Currently there are more than 300 X12
transaction sets in XML format for B2B
transactions.
 They are used in the insurance, franchises,
automotive, finance, communication, and
merchandising industries.
http://cleo.com/university/tech-terms/EDI_X12.asp

UCS History and Background
 UCS = Uniform Commercial Standard
 Subset of ANSI ASC X12
 Foundation for creation from the
Transportation industry
 Grocery and Retail-oriented Industry – 1976
 Sponsorship and Funding
 Manufacturers
 Retailers
 Wholesalers
 Brokers
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

UCS Development (3 phases)
 1st – Feasibility Study (Spring 1980)
 2nd – Development of message and
communication standards (August 1980)
 3rd – Validity test of message and communication
standards
 By late 1982, UCS standards released for general
use by industry members

UCS Implementation
Guidelines
 Data Administration
 Ordering
 Logistics
 Financial
 Business Support

UCS Communication Standard
 Design
 Objective
 Provide for the communication of EDI data
 Identify alternative communication methods
 Specify the communication standard for industry
use
 Provide operational guidelines for using the
standard

UCS Internet Standards
 Design
 E-commerce Transport Communication
Guidelines

UCS Example (Kroger, Co.)
 Kroger Co. uses EDI for:
 Invoice processing
 Remittance advice
 Purchase order processing
 Vendor replenishment and managed inventory
 Advanced ship notice
 Product transfer and resale report
 Documenting price changes
 Promotional announcement processing
 Item maintenance
http://edi.kroger.com/edi/homepage_edi.htm

Item Maintenance (Kroger, Co.)
 UCS 888 transaction
 Receive detail finished good product information
for new products or changes in the existing product
specifications from suppliers
 Benefits
 Increased accuracy
 Improved timeliness
 Reduced operating expenses
http://edi.kroger.com/edi/homepage_edi.htm

EDIFACT
 Electronic Data Interchange for Administration,
Commerce, and Transport is the international set
of EDI standards
 Became a UN standard in 1987
 Maintenance and further development is the
responsibility of the United Nations Centre for
Trade Facilitation and Electronic Business
(UN/CEFACT)
http://www.x12.org/x12org/about/faqs.cfm#c8

EDIFACT
 Includes syntax rules and implementation
guidelines, message design guidelines, data
elements, code sets, and other definitions
 Used for business-to-business (B2B)
communication rather than business-to-
consumer (B2C)
 Allows multi-country and multi-industry
exchange
 Europe adopted EDIFACT early and has a large
installed base indicating its continued use
Statistical Journal of the UN Economic Commission for Europe, 2002

Example of EDIFACT
UNB+IATB:1+1APPC+LHPPC+940101:0950+1’
UNH+1+PAORES:93:1:IA’ MSG+1:45’
IFT+3+?*XYZCOMPANY AVAILABILITY?*’
ERC+A7V:1:AMD’ IFT+3+NO MORE FLIGHTS’ ODI’
TVL+240493:1000::1220+FRA+JFK+DL+400+C’
PDI++C:3+Y::3+F::1’ APD+74C:0:::6++++++1A’
TVL+240493:1740::2030+JFK+MIA+DL+081+C' PDI++C:4’
APD+EM2:0:1630::6+++++++DA’ UNT+13+1’ UNZ+1+1’
http://en.wikipedia.org/wiki/UN/EDIFACT

Things you may want to remember . . .
(for the test)
 EDI – Electronic Data Interchange
 VAN – Value-Added Network
 ASC X12 is moving towards integration with XML
formatting
 EDIFACT – international set of EDI standards
 In the near future EDI will be vital for business
domestically and abroad

Sources of Information
 http://www.x12.org
 http://www.edi-guide.com
 http://www.gotedi.com/
 http://www.phharval.com/edi/whatisedi/edibasics.html
 http://www.computerworld.com
 http://aspalliance.com/487
 http://cleo.com/university/tech-terms/EDI_X12.asp
 http://www.uc-council.org/ean_ucc_system/
stnds_and_tech/ucs.html
 http://edi.kroger.com/edi/homepage_edi.htm
 Statistical Journal of the UN Economic Commission for Europe, 2002
 Professor Byron Marshall, Ph.D.

EDI

More Related Content

What's hot (20)

Similar to EDI (20)

More from Nishant Pahad (20)

Recently uploaded (20)

EDI