Why are we here today ???
1
W
O
W !
> 90,000,000,000,000
Greater than 90 TRILLION sheets of paper are
produced by American business annually
2
EC Strategy
Move From
Paper Intensive
Non - Integrated
Automated
Integrated
Create Data Once - Use It Many Times!
3
The World of
Electronic Commerce
EC
EC
JIT
Tech
Data
Barcoding
EI
EBB
EDI
VMI
InterNet
CE
E-mail
FAX
4
MODULE 1 OBJECTIVES
l
At the completion of this module, you
will be able to:
–
–
–
–
Define EDI
Explain EDI Terminology
Describe the background of EDI
Explain some benefits of EDI
5
ELECTRONIC DATA INTERCHANGE
• Definitions
• Background
• Benefits
Module 1
6
ELECTRONIC DATA
INTERCHANGE
TRANSACTION
DATA
COMPANY A
COMPANY B
EDI is the computer-to-computer exchange of routine business
documents (data) in a standard format between companies.
7
VALUE ADDED NETWORK (VAN)
Buyer Post Office
Seller
8
TRADING PARTNER
EDI
Trading partners are companies that do business via
EDI.
9
TRANSACTION SET
PO
EDI
Purchase
Order (PO)
Purchaser
A transaction set refers to a type of electronic document.
10
PAPER DOCUMENT INTERCHANGE
Data Entry
PO
Computer
Computer
Post Office
Purchaser
Invoice
11
ELECTRONIC DATA INTERCHANGE
Data Entry
PO
Computer
Computer
VAN
Purchaser
Invoice
12
Implementation
EC is Cross Functional
Account Executives
Accounting
Shipping
EDI has an impact on all departments
Order Processing
Infomation
Systems
13
Implementation
Considerations for System Design
• Determine Requirements
• Determine Readiness
• Select Participants
EDI
System
14
Implementation
Support areas
Liaison Areas
Accounting
Marketing
Order Processing
Sales
Transportation
Technical Areas
Electronic Commerce
Information Systems
15
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Questions
16
ELECTRONIC DATA INTERCHANGE
Components
Module 2
17
MODULE 2 OBJECTIVES
l
At the completion of this module, you
will be able to:
–
–
–
List the four major components of an EDI
system
Recall the terms VAN, ANSI X-12,and
their meaning
Recall reasons why companies are doing
EDI
18
EDI Components
Hardware
Standards
EDI
Software
Communications
19
Transaction Set
PO
EDI
PO
Purchaser
Transaction set refers to a type of electronic document
20
WITH STANDARDIZATION
Type a who'll bunch of things in her gain.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
Type a who will bunch of things in her again.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
21
Components
ELECTRONIC DATA
INTERCHANGE
STANDARDS
ANSI
X12
UN/EDIFACT
22
Other Standards
Transportation Data Coordinating Committee
(TDCC)
Uniform Communications Standard (UCS)
Warehouse Information Network (WINS)
Voluntary Inter-Industry Communication
Standard (VICS)
EDI for Administration, Commerce, and Trade
(EDIFACT)
23
TYPES OF BUSINESS
TRANSACTIONS VIA EDI
Other
15%
Invoices
24%
Shipping Note
14%
Credit/Debit
3%
Purchase
Orders
44%
24
A Standard Language
Type a who'll bunch of things in her gain.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
Type a who will bunch of things in her again.
Make it look like there are words written on this
page. I am very warm. This presentation is very
long. Make it look like there are words written
on this page. I am very warm. This presentation
is very long.
Type a who'll bunch of things in her gain.
Make it look like there are words written
on this page. I am very warm. This
presentation is very long. Make it look
like there are words written on this page.
I am very warm. This presentation is very
long.
25
How EDI Works !
The APL Group
quote
664
danbury Ct
Wilson, ct
RFQ # 1234
06/07/95
1 WIDGET #5678
2 dz gizmos
ST* 843 12345
NTE**Ship
Complete
N1 *SE* The Apl
Grp Inc...
N3 *664
DANBURY
Converts Internal Data
Format to ANSI X12
(outbound)
Converts ANSI X12
Standard format to
Internal Format
(inbound)
26
EDI Components
Hardware
Standards
EDI
Software
Communications
27
EDI Software
1. Document Support
Database
4. Translation
Communicati
ons
2. Mapping
X12
3. Standards Support
28
EDI Components
Hardware
Standards
EDI
Software
Communications
29
Hardware
30
EDI Components
Hardware
Standards
EDI
Software
Communications
31
Value Added Network (VAN)
U.S. Post Office
Buyer
Seller
32
Point-to-Point:
EDI Without a VAN
Buyer
Supplier
1
A
2
B
3
C
4
D
33
Value Added Network (VAN):
Buyer
Supplier
1
A
2
B
3
C
4
D
34
Interconnect Strategy
GE VAN
AT&T
VAN
35
---EDI Process-----Integrated Systems---
Business
Management System
Business
Management System
Purchase Order
Accounting
Shipping
EDI
Accounting
Receiving
Purchase Order
Acknowledgment
Manufacturing
Purchasing
Sales/Order
Processing
Order Processing
36
Data integration Issues
Database
Part List
New Data
Partner’s Part List
Cross-referencing
Database
Integrated Applications
EDI Software
Bridge Between
Applications
37
Networking Users
EC GROWTH
45,000
Number of Registered
EDI Users.
40,000
.
35,000
30,000
25,000
Average Annual Growth ~ 45%
20,000
15,000
10,000
5,000
0
88
*Source: EDI Forum
89
90
91
92
93
94
38
Why do Companies use EDI?
60%
Percent
50%
Customer/supplier
requirement
40%
30%
Quick access to data
Cost savings
20%
10%
Data accuracy/error reduction
0%
1992
1993
1994
1995
1996
In 1996, EDI grew substantially due to customer / major supplier
requirements or requests. EDI is an element used to streamline
business processes.
39
Government
Health care
Retail
Grocery
Transportation
Policy
EDI
USERS
Advertising
Insuranc
e
Construction
Banks
Manufacturing
Chemical
Electronics
Petroleum
Automotive
40
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??
Questions
41
Manufacturing Focus
EFT
BPR
Internet
(IT)
EDI
JIT
VMI
ERS
Bar-Code
Maximum benefits are obtained when EDI is coupled
with BUSINESS PROCESS CHANGE
42
EDI BENEFITS
Increased Business
Opportunities
Reduced Inventory
More Accurate Records and Decision-making Information
Lower Data Entry Costs
43
EDI
BENEFITS
Decreased Mailing Costs
Reduction In Order Time
Greater Customer
Satisfaction
Better Cash Management
44
Bar-Code
45
EDI and Business Processes
EFT
BPR
Internet
(IT)
EDI
JIT
VMI
ERS
Bar-Code
Maximum benefits are obtained when EDI is coupled
with BUSINESS PROCESS CHANGE
46
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??
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??
Questions
47
ELECTRONIC DATA INTERCHANGE
EDI Translation
Module 3
48
Module 3 Objectives
l
At the completion of this module, you will be able
to:
–
–
Relate the paper document
components to EDI transaction set
Recall the sections of an EDI
transaction set
49
ANSI ASC X12 Standard
Purchase Order
Purchase Order
Facilitates electronic interchange of business documents
50
Transaction Set Composition
File = Transaction Set
Record = Data Segment
Field = Data Elements
51
Paper Vs. EDI Document
Paper Document = EDI
Transaction Set
Date: 12/31/92
Purchase Order #
4001
PURCHASE ORDER
Vendor: ABC Supplies
P.O. Box 180
Baltimore, MD 21239
Quantity
2
Ship To: Cleveland ECRC
2415 Woodland Avenue
Cleveland, OH 44115
Description
Legal Pads LP8X11
Price
Amount
$8.00/DZ $16.00
ST*850*0001^
BEG*00*NE*4001**921231^
N1*VN*ABC Supplies^
N3*P.O.Box 180^
N4*Baltimore*MD*21239^
N1*ST*Cleveland ECRC^
N3*2415 Woodland Avenue^
N4*Cleveland, OH 44115^
PO1*1*2*DZ*8.00**VP*LP8X11^
CTT*1^
SE*11*0001
52
Envelopes
Address Information
Information Receipt
Information Routing
Date and Time
Stamp
Audit and Version
Control
53
Envelope Elements
Identification
Information
54
Trading Partner
Enveloping Issues
• Envelope Identiffers
• Addressing codes
• Types of control numbers
• Control number sequence
• Version of standards
55
Envelope Structure
ISA
Interchange
Interchange
IEA
56
Paper Vs. EDI Document
Envelope = Interchange
Cleveland ECRC
[electronic address]
ABC Company
[electronic address]
ISA*05*0000000000*01*PASSWORD01*01*
SENDERID
ENTIFIC*01*ReceiveidentifI*950919*1503*U
*00304*
123456789*1*T*|^
GS...
ST...
.
.
SE...
GE...
IEA*1*123456789^
57
Paper Vs. EDI Document
Folder = Functional Group
GS*PO*CECRC01*DISC*95091
9*1426*
0001*X*003050^
ST*850*1001
.
.
.
SE*17*1001
GE*1*0001
58
Envelope Structure
ISA
ISA*05*0000000000*01*PASSWORD01*01
*SENDERID
ENTIFIC*01*ReceiveidentifI*950919*1503*
U*00304*
123456789*1*T*|^
GS...
ST...
.
.
SE...
GE...
IEA*1*123456789^
GS
GE
IEA
59
Transaction Set
ISA
GS
ST
Transaction Set
ST*850*0001^
BEG*00*NE*4001**921231^
N1*VN*ABC Supplies^
N3*P.O.Box 180^
N4*Baltimore*MD*21239^
N1*ST*Cleveland ECRC^
N3*2415 Woodland Avenue^
N4*Cleveland *OH* 44115^
PO1*1*2*DZ*8.00**VP*LP8X11^
CTT*1^
SE*11*0001
SE
GE
IEA
60
Paper Vs. EDI Document
Document = Transaction Set
ST*850*0001^
BEG*00*NE*4001**921231^
Date: 12/31/92
Purchase Order # 4001
PURCHASE ORDER
Vendor: ABC Supplies Ship To: Cleveland ECRC
P.O. Box 180
2415 Woodland Avenue
Baltimore, MD 21239
Cleveland, OH 44115
Quantity
Description
2 Pads LP8X11
Legal
Document
Price Amount
$16.00
$8.00/DZ
N1*VN*ABC Supplies^
N3*P.O.Box 180^
N4*Baltimore*MD*21239^
N1*ST*Cleveland ECRC^
N3*2415 Woodland Avenue^
N4*Cleveland, OH 44115^
PO1*1*2*DZ*8.00**VP*LP8X11^
CTT*1^
SE*11*0001
Transaction Set 850
61
Data Segment
Date:
Purchase Order #
PURCHASE ORDER
Vendor:
Ship To:
Line Item = Data Segment
Quantity
2
Description
Legal Pads LP8X11
Price
Amount
$8.00/DZ
$16.00
PO1*1*2*DZ*8.00**VP*LP8X11^
62
Paper Vs. EDI Document
4001
Date: 12/31/92
Purchase Order #
4001
PURCHASE ORDER
Vendor: ABC Supplies
P.O. Box 180
Baltimore, MD 21239
Ship To: Cleveland ECRC
2415 Woodland Avenue
Cleveland, OH 44115
Data Elements
N1*VN*ABC Supplies^
63
Paper Vs. EDI Document
Data
Segment
Delimiter
Code = Qualifier
N1*VN*ABC Supplies^
Separator = Element Delimiter
64
Summary
Communications Protocol
ISA
ISA*05*0000000000*01*PASSWORD01*01*
SENDERID
ENTIFIC*01*ReceiveidentifI*950919*1503*U*
00304*
123456789*1*T*|^
GS...
ST...
.
.
SE...
GE...
IEA*1*123456789^
GS
ST
SE
GE
IEA
65
Module 3 Summary
–
–
–
The paper business document and its
components can be compared with
the EDI transaction set.
EDI enveloping can be compared
functionally to postal envelopes.
EDI Software translates business
documents into a standard format for
transmission
66
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Questions
67
Organizational Issues in EC/EDI
Implementation
Move From
Paper Intensive
Non - Integrated
•
•
•
•
•
•
•
Automated
Integrated
Mind Sets
Cultural Change
Conveying Key Messages
Building a Case for Action
Bottom Up Support
Selecting EC Technologies
68
Linking EC Technologies to Business Results
Organizational Issues in EC/EDI
Implementation
Two Key Messages:
– Here is where we are and why we can’t stay
here.
– This is the company we must become.
•Supplier/Customer Mandate
•Increased Competition
•Globlization of the Marketplace
•Reduce Costs
People must buy-in!
69
Organizational Issues in EC/EDI
Implementation
Elements of an effective case for action:
–
–
–
–
–
Business context
Problem
Marketplace demands
Diagnosis
Cost of no action
70
Organizational Issues in EC/EDI
Implementation
o
o
o
Increased competition and a rapidly changing
business environment have forced the
implementation of technology in businesses of every
size.
Implementing Electronic Commerce can position
your company to compete with a wide range of
competitors.
A small business has the advantage of skipping
layers of management when implementing
electronic commerce. Execution can happen quickly,
risk free, and at a low cost.
71
Organizational Issues in EC/EDI
Implementation
How to bring people into the change
process.
“Start with reality. Get all the facts out. Give people the rationale for
change, laying it out in the clearest, most dramatic terms.
When everybody gets the same facts, they’ll generally come to the
same conclusions.”
J. Welch, CEO of General Electric
“To inaugurate large-scale change, you may have to create the burning
platform. You have to give people a reason to do something
differently. Scaring people isn’t the answer. You have to appeal to
them. The more they understand why you want to change, the easier it
is to commit to it.”
72
L. Bossidy, CEO of Allied-Signal
Fortune Magazine, Dec 13, 1993
Organizational Issues in EC/EDI
Implementation
The cost of integration in the absence of a cultural
change actually are higher. This is true because a
new technical system has been introduced within
the old culture.
–
–
–
–
–
The organization retains redundant processes.
Non concurrent processes slow the cycle.
Hand-offs further slow the process.
Creates an environment for error.
Rework is a characteristic.
These findings are especially pertinent today because of the
need to lower costs, the requirements to be flexible and the
ability to take advantage of the opportunities.
73
Electronic Communication(EC)
Vision for the Future
Virtual
Enterprise
3,000 Pound Gorilla
Prime Contractor
Vendor
Vendor
Prime Contractor
1st
tier
Vendor
1st
tier
74
1st
tier
2nd tier
??
??
??
??
??
??
Questions
75