Electronic Data Interchange

EDI stands for Electronic Data Interchange which is the exchange of large amounts of information computer-to-computer in a specified format between business partners. 

Electronic Data Interchange (EDI) is defined as the electronic communication process for exchanging data amongst trading partners without human intervention. Simply put, EDI provides a technical basis for commercial “conversations” between two entities, either internal or external.

Three types of EDI Solutions

• Integrated EDI Solution
• Internet EDI Solution / Web EDI Solution
• EDI Outsourcing
• Direct EDI/Point-to-Point
• EDI via AS2 
• EDI via SFTP
• EDI via FTPS
• EDI via Value Added Network or EDI Service Provider

EDI compliance refers to a business's capacity to accurately send and receive EDI transactions according to the order data requirements of its EDI trading partners. Each document must adhere to a specific EDI format to ensure the successful exchange of EDI documents.

List of EDI ANSI X12 Document Types

• EDI 204 Motor Carrier Load Tender
• EDI 210 Motor Carrier Freight Details and Invoice
• EDI 211 Motor Carrier Bill of Lading
• EDI 214 Transportation Carrier Shipment Status Message
• EDI 310 Freight Receipt and Invoice (Ocean)
• EDI 315 Status Details (Ocean)
• EDI 753 Request for Routing Instructions
• EDI 754 Routing Instructions
• EDI 810 Invoice
• EDI 811 Consolidated Service Invoice/Statement
• EDI 812 Credit/Debit Adjustment
• EDI 816 Organizational Relationships
• EDI 819 Joint Interest Billing and Operating Expense Statement
• EDI 820 Payment Order/Remittance Advice
• EDI 824 Application Advice
• EDI 830 Planning Schedule with Release Capability
• EDI 832 Price/Sales Catalog
• EDI 840 Request for Quotation
• EDI 843 Response to Request for Quotation
• EDI 844 Product Transfer Account Adjustment
• EDI 845 Price Authorization Acknowledgment/Status
• EDI 846 Inventory Inquiry/Advice
• EDI 849 Response to Product Transfer Account Adjustment
• EDI 850 Purchase Order
• EDI 852 Product Activity Data
• EDI 853 Routing and Carrier Instruction
• EDI 855 Purchase Order Acknowledgment
• EDI 856 Ship Notice/Manifest
• EDI 857 Shipment and Billing Notice
• EDI 860 Purchase Order Change Request – Buyer Initiated
• EDI 861 Receiving Advice/Acceptance Certificate
• EDI 862 Shipping Schedule
• EDI 864 Text Message
• EDI 865 Purchase Order Change Acknowledgment/Request – Seller Initiated
• EDI 866 Production Sequence
• EDI 867 Product Transfer and Resale Report
• EDI 869 Order Status Inquiry
• EDI 870 Order Status Report
• EDI 875 Grocery Products Purchase Order
• EDI 879 Price Information
• EDI 880 Grocery Products Invoice
• EDI 888 Item Maintenance
• EDI 889 Promotion Announcement
• EDI 894 Delivery/Return Base Record
• EDI 930 Automotive Inspection Detail
• EDI 940 Warehouse Shipping Order
• EDI 943 Warehouse Stock Transfer Shipment Advice
• EDI 944 Warehouse Stock Transfer Receipt Advice
• EDI 945 Warehouse Shipping Advice
• EDI 947 Warehouse Inventory Adjustment Advice
• EDI 990 Response to a Load Tender
• EDI 997 Functional Acknowledgment
• APERAK Application error and acknowledgement message
• DELFOR Delivery schedule message
• DELJIT Delivery just in time message
• DESADV Despatch advice message
• INVOIC Invoice message
• INVRPT Inventory report message
• ORDERS Purchase order message
• RECADV Receiving advice message

EDI communication standards are the requirements for the format and composition of EDI documents. EDI standards delineate the correct order and location of units of data in each EDI document.  

Here is the link to Complete Guide to EDI Standard

ANSI ASC X12

In 1979, the American National Standards Institute (ANSI) chartered the Accredited Standards Committee (ASC) X12 to develop uniform standards for inter-industry electronic exchange of business transactions, namely electronic data interchange. ANSI X12 was originally conceived to support companies across different industry sectors in North America however today there are more than 300,000 companies worldwide using X12 EDI standards in daily business transactions. ASC X12 also contributes to UN/EDIFACT messages that are used widely outside of the United States.

EANCOM

This standard was originally conceived in 1987 by the EAN General Assembly and was to be developed on the then emerging international UN/EDIFACT standard. The EANCOM messages, maintained by GS1, are more detailed in nature compared to the TRADACOMS message set. EANCOM was originally developed for the retail sector and has subsequently grown to become the most widely used UN/EDIFACT subset and is now found in a variety of other industry sectors such as healthcare, construction and publishing.

VICS

The Voluntary Inter-industry Commerce Standard is used by the general merchandise retail industry across North America. It is a subset of the ANSI ASC X12 national standard. VICS EDI is being utilized by thousands of companies, department and specialty retail stores, mass merchandisers and their respective suppliers. In 1988 GS1 US became the management and administrative body for VICS EDI. GS1 US also manages the ASC X12 derived Uniform Communication Standard (UCS) for the grocery industry and Industrial/Commercial Standard (I/C) for the industrial sector.

UN/EDIFACT

United Nations/Electronic Data Interchange for Administration, Commerce and Transport is the international standard that was developed by the United Nations. The work of maintenance and further development of this standard is done through the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) under the UN Economic Commission for Europe. The EDIFACT standard provides a set of syntax rules to structure, an interactive exchange protocol and provides a set of standard messages which allow multi-country and multi-industry exchange of electronic business documents. EDIFACT is widely used across Europe, mainly due to the fact that many companies adopted it very early on. EDIFACT has seen some adoption in the ASPAC region, however, there are currently more XML-based standards being used in this particular region today.

ODETTE

The Organization for Data Exchange by Tele Transmission in Europe is a group that represents the interests of the automotive industry in Europe. They are the equivalent of the Automotive Industry Action Group (AIAG) in North America. The organization develops tools and recommendations that improve the flow of goods, services product data and business information across the whole automotive value chain. ODETTE has been responsible for developing communications standards such as OFTP and OFTP2.0, constant improvement processes such as Materials Management Operations Guideline / Logistics Evaluation (MMOG/LE) and automotive-specific document standards as defined via the link below.

Tradacoms

This is an early standard for EDI and was primarily used in the UK retail sector. It was originally introduced in 1982 as an implementation of the UN/GTDI syntax, one of the precursors of EDIFACT, and was maintained and extended by the UK Article Numbering Association, now called GS1 UK. The standard is more or less obsolescent since the development of it effectively ceased in 1995 in favor of the EDIFACT EANCOM subsets. Despite this it has proved durable and the majority of the retail EDI traffic in the UK still uses it today.

VDA

This organization develops standards and best practices to serve the needs of companies within the German automotive industry. The VDA has developed over thirty messages to meet the need of companies such as VW, Audi, Bosch, Continental and Daimler AG. Further information about these messages can be found via the link below.

HIPAA

The Health Insurance Portability and Accountability Act was enacted by the U.S congress in 1996. A key component of HIPAA is the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans and employers. The standards are meant to improve the efficiency and effectiveness of the North American health care system by encouraging the widespread use of EDI in the U.S health care system. The HIPAA EDI transaction sets are based on X12 and the key message types are described below.

RosettaNet

This consists of a consortium of major computer, consumer electronics, semi-conductor manufacturers, telecommunications and logistics companies working together to create and implement industry-wide, open e-business process standards. These standards form a common e-business language, aligning processes between supply chain partners on a global basis. The RosettaNet document standard is based on XML and defines message guidelines, business processes interface and implementation frameworks for interactions between companies. Using RosettaNet Partner Interface Processes (PIPs), business partners of all sizes can connect electronically to process transactions and move information within their extended supply chains. Further information about RosettaNet PIP documents can be found from the link below.

SWIFT

The Society of Worldwide Interbank Financial Telecommunication was formed in 1973 and is headquartered in Brussels. SWIFT operates a worldwide financial messaging network which exchanges messages between banks and financial institutions. SWIFT also markets software and services to financial institutions, much of it for use on the SWIFTNet Network. SWIFTNet is the infrastructure used to exchange these documents and FIN, InterAct and FileAct are used to encode the SWIFT documents for transmission. The majority of interbank messages use the SWIFT network. As of November 2008, SWIFT linked 8740 financial institutions across 209 countries. The SWIFT document standard is split into four areas, Payments, Trade Services, Securities and Trading.

The main difference between EDI and simply sending email with EDI information, is the set of rigorous standards involved with following the EDI format. These standards were put in place to ensure that companies who use EDI as their method of information transfer were being diligent about security, and conforming to the proper procedures of the protocol.

The other difference, is that EDI is for the most part handled by computer systems; human intervention is usually only required when there are errors to address. In this way, it needs to follow a seamless data transfer process by which the data set being sent to the receiving machine is accepted and confirmed with no down-time.

Over time, EDI and the web began to live harmoniously. In fact, those businesses that have used EDI as their data transfer methodology have leveraged the Internet to send their EDI documents, instead of what some thought would happen: the Internet replacing EDI. If anything , the Internet has simply facilitated the transfer of EDI documents.

EDI has been used in the past primarily by automotive and retail businesses, however in the past few years, the format has been more widely adopted. Manufacturing, healthcare, pharmaceutical, utility and construction companies are good examples of EDI clients. Here are some of Commport's trusted partners. 

Basically, any type of business that deals with large amounts of identical paperwork/form data can directly benefit from adopting an EDI solution. The benefits of EDI over using a paper system are clear:

• significant cost savings
• Eliminate errors caused by manual data entry
• Improve cash flow - never miss invoice again
• reduced drain on resources overall
• reduced error rates in data transfer
• improved security of data being transferred
• reliability – you can have confidence that data is reaching its destination
• Automates the entire EDI document exchange

EDI solutions (Electronic Data Interchange) are designed to help you manage this massive amount of paperwork. The considerations for savings in time, potential errors from mistyped or incorrectly logged information, not to mention the impact on the environment—all of these are important considerations when you’re looking into an Edi solution for your business.

If your business model is based on having a series of processes that are labour intensive—yet completely necessary—in regards to a huge amount of work required to keep things running, then you will want to consider an EDI solution.

Getting started with EDI

First of all, lay out your process for handling documents from one side of the chain to the next. What is the process? Does it require a great amount of manual intervention? Think of how many places in the process where a human agent is necessary to move the process to the next stage.

Think about how much variation exists between documents. Consider that with an EDI solution, there should be seamless migration from one system to another. The less human intervention required, the better the system will perform.

Next, identify your internal network. What are you currently using to move your processes forward? How would you benefit from having an EDI solution in place? What would it replace? Have you considered the time and energy considerations for implementing an EDI solution?

Plan out your workflow. Once your documents have been brought to a certain level, how are they to be passed to the next stage?

Once you have identified these steps, you will be that much more prepared to integrate an EDI solution to manage a lot of the legwork currently going into your document tracking and submitting process.

What type of infrastructure do you need to have in place? The great thing about modern EDI solutions (Commport offers several solutions, including EDI software solutions like CyberLiNK) you do not have to have more than an Internet connection and the proper software installed to make use of the many advantages of EDI. The nature of Commport’s solutions is to apply optimum security right out of the gate, so you don’t even have to think about it.