Electronic Data Interchange
(EDI)
Rebecca Fouts
Laura Frye
Laura Gray
Matt Muller
Ariana Pelayo
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 dataentry;
– 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
Wholesaler A
Retailer B
Wholesaler B
Retailer C
Wholesaler C
Retailer D
Wholesaler D
Original Model
Retailer A
Wholesaler A
Retailer B
Wholesaler B
Retailer C
Wholesaler C
Retailer D
Wholesaler D
Value-Added Network (VAN)
• communications networks
supplied and managed by thirdparty companies that facilitate
electronic data interchange, Web
services and transaction delivery
by providing extra networking
services
VAN Model
Retailer A
Wholesaler A
Retailer B
Wholesaler B
Value-added
Network
Retailer C
Wholesaler C
Retailer D
Wholesaler D
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
Example of XML
<?xml version=”1.0” standalone=”yes”?>
<NewDataSet>
<Order>
<Customer><Name>Company Name</Name>
<Address>Address, City, State, Zip</Address>
<Customer Number>101</Customer Number></Customer>
<Items>
<Item><Product Number> 25</Product Number>
<Qty>25</Qty></Item>
<Item><Product Number> 30</Product Number>
<Qty>15</Qty></Item>
</Items>
</Order>
</NewDataSet>
http://aspalliance.com/487
Direct Routing
Retailer A
Wholesaler A
Retailer B
Wholesaler B
Retailer C
Wholesaler C
Retailer D
Wholesaler D
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*004
010 \ST*820*987600111
\BPR*C*77.77*C*ACH*CTX*01*234056789*DA*0099109999*(Co
ntinued) *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\
http://www.x12.org
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.
http://www.x12.org
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
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html
UCS Implementation Guidelines
• Data Administration
• Ordering
• Logistics
• Financial
• Business Support
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html
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
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html
UCS Internet Standards
• Design
• E-commerce Transport
Communication Guidelines
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html
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-toconsumer (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.