Electronic data interchange ( EDI ) is a business concept that electronically communicates information to what is traditionally communicated on paper. Two classic examples of such information are purchase orders and invoices. Technical standards for EDI exist to facilitate transacting these instruments without having to make special arrangements.
EDI has been around since at least the early 70s, and there are many EDI standards (including X12, EDIFACT, ODETTE, etc.), some of which address specific industry or region needs. It also specifically refers to the standard family. In 1996, the National Institute of Standards and Technology defines the exchange of electronic data as "computer-to-computer exchange of strictly formatted messages representing documents other than monetary instruments." EDI implies a sequence of messages between two parties, one of which may serve as the originator or recipients. Formatted data representing documents may be sent from the originator to the receiver by telecommunication or physically transported on electronic storage media. "It distinguishes electronic communication or mere data exchange, specifies that" in EDI, message processing is received only by the computer alone Human intervention in received message processing is usually intended only for error conditions, for quality review, and for specific For example, transmission of binary or textual data instead of EDI as defined here unless the data is treated as one or more data elements of EDI messages and usually not d intended for human interpretation as part of on-line data processing. "In short, EDI can be defined as a structured data transfer, with agreed message standards, from one computer system to another without human intervention.
Video Electronic data interchange
Histori
Like many other early information technologies, EDI is inspired by developments in military logistics. The complexity of Berlin's air transport in 1948 required the development of concepts and methods of exchange, sometimes through 300 teletype baud, large amounts of data and information on transported goods. This initial concept then formed the first standard TDCC (Transportation Data Coordinating Committee) in the US. Among the first integrated systems using EDI are the Transport Control System. One of the real-time systems was the London Airport Cargo EDP Scheme (LACES) at Heathrow Airport, London, England, in 1971. Applying direct trader input method (DTI), allows forwarding agents to enter information directly into the Customs processing system. reduce the time for cleaning. Increased maritime traffic and customs problems similar to those experienced at Heathrow Airport led to the adoption of DTI systems at each port or port group in the 1980s.
Maps Electronic data interchange
Standard
EDI provides a technical basis for automated commercial "conversations" between two entities, both internal and external. The term EDI covers the entire process of electronic data exchange, including transmission, message flow, document formats, and software used to interpret documents. However, EDI standards describe strict electronic document formats, and EDI standards are designed by implementers, initially in the Automotive industry, to be independent of communications and software technology. EDI can be transmitted using a methodology approved by the sender and receiver. This includes various technologies, including modems (asynchronous and synchronous), FTP, e-mail, HTTP, AS1, AS2, AS4 etc. It is important to distinguish between EDI documents and methods to transmit them. When they compare the 2400 bit/s modem sync protocols, CLEO devices, and value-added networks used to send EDI documents to transmission over the Internet, some people equate non-Internet technologies with EDI and mistakenly predict that EDI itself will be replaced. along with non-Internet technologies. This non-internet transmission method is replaced by Internet protocols such as FTP, HTTP, telnet, and e-mail, but the EDI document itself still exists.
As more and more trading partners use the Internet for transmission, standards have emerged. In 2002, the IETF published RFC 3335, offering a standardized and secure method for transferring EDI data via e-mail. On July 12, 2005, the IETF working group ratified the RFC4130 for MIME-based EDIINT HTTP transfers (a.k.a. AS2), and the IETF has prepared a similar RFC for FTP transfers (a.k.a. AS3). EDI via web service (AS4) has also been standardized by the OASIS standard body. While some EDI transmissions have moved into this newer protocol, value-added network providers remain active.
EDI documents generally contain the same information that is usually found in paper documents used for the same organizational functions. For example, an order ship-of-storage EDI 940 is used by the manufacturer to tell the warehouse to ship the product to the retailer. It usually has a 'ship-to' address, a 'bill-to' address, and a list of product numbers (usually UPC) and quantity. Another example is a series of messages between a seller and a buyer, such as a request for a quote (RFQ), a bid in response to RFQ, a purchase order, a purchase order acknowledgment, a delivery notification, receiving advice, invoices, and payment advice. However, EDI is not limited to trade-related business data but covers all areas such as drugs (eg, patient records and laboratory results), transportation (eg, containers and capital information), engineering and construction, etc. In some cases, EDI will be used to create a new business information stream (which is not a previous paper stream). This is the case in Advanced Shipment Notification (ASN) designed to inform delivery recipients, goods to be received and how items are packaged.
Some standard EDI standard devices: UN-recommended
- UN/EDIFACT is the only international and dominant standard outside North America. AS AN12 ASC X12 (X12) is very dominant in North America.
- The GS1 EDI standard develops the dominant GS1 in the global supply chain
- The TRADACOMS standard developed by ANA (Association of Article Number now known as GS1 UK) is very dominant in the UK retail industry.
- ODETTE standards are used in the European automotive industry
- VDA standards used in the European automotive industry especially in Germany
- HL7, the semantic interoperability standard used for health care data.
- Edig @ s (EDIGAS) is a standard that deals with trade, transportation (via pipeline or container) and gas storage.
Many of these standards first appeared in the early to mid-1980s. The standard specifies the format, character set, and data elements used in the exchange of documents and business forms. The complete X12 Document List includes all major business documents, including purchase orders and invoices.
The EDI standard governs mandatory and optional information for certain documents and provides rules for document structure. The standard is like a building code. Just as two kitchens can be built "for code" but look completely different, two EDI documents can follow the same standards and contain different sets of information. For example, a food company may indicate a product expiration date while a clothing manufacturer will choose to send color and size information.
Specifications
Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology. Trading partners approve specific information to be sent and how it should be used. This is done in a human-readable specification (also called Message Implementation Guidance). While the standard is analogous to building codes, the specification is analogous to blue print. (The specification may also be called "mapping," but term mapping is usually reserved for machine-readable specific instructions given to translation software.) Larger trading "hubs" have Message Implementation Guidelines that reflect their business processes to process EDI and they usually do not want to modify their EDI business practices to meet the needs of their trading partners. Often in large companies these EDI guidelines will be written generically enough for use by different branches or divisions and will therefore contain information that is not required for the exchange of certain business documents. For other large companies, they can create separate EDI guides for each branch/division.
Transmission
Trading partners are free to use any method for transmitting documents. Furthermore, they can interact directly, or through intermediaries.
Peer-to-peer
Trading partners can connect directly with each other. For example, automotive manufacturers may maintain a modem pool that all of its hundreds of suppliers are required to perform EDI. However, if the supplier does business with multiple manufacturers, it may be necessary to get a different modem (or VPN device, etc.) and different software for each.
Value-added network
To address limitations in the application of peer-to-peer EDI, VAN (value-added network) is defined. A VAN acts as a regional post office. It accepts transactions, checks 'from' and 'for' information, and routes transactions to the final recipient. VANs can provide a number of additional services, e.g. retransmit documents, provide third party audit information, act as a gateway for different transmission methods, and handle telecommunications support. Because of this and other services provided by VAN, businesses often use VANs even when both trading partners use Internet-based protocols. Health clearing places perform many of the same functions as VANs, but have additional legal restrictions
VANs can be operated by various entities:
- telecommunication company;
- a consortium of industrial groups;
- Large companies that interact with their suppliers/vendors.
Internet
As more organizations are connected to the Internet, eventually most or all EDIs are pushed into it. Initially, this is done through an ad hoc convention, such as an unencrypted FTP ASCII text file to a specified folder on a particular host, only allowed from certain IP addresses. However, the IETF has published several information documents (the "Deployment Statement" below see below Protocols ) that describes how to use standard Internet protocols for EDI.
In 2002, Walmart has pushed AS2 to EDI. Due to its significant presence in the global supply chain, AS2 has become a common approach adopted for EDI.
Interpreting data
The EDI translation software provides the interface between the internal system and the EDI format sent/received. For "incoming" documents EDI solutions will receive files (either via Value Added Network or directly using protocols such as FTP or AS2), retrieve received EDI files (commonly referred to as "envelopes"), validate that the trading partners who send the files are partners legitimate trade, that the file structure meets the EDI standards, and that each information field conforms to an agreed standard. Typically translators will create either a fixed length file, variable length or XML tag format or "print" the received EDI document (for an unintegrated EDI environment). The next step is to convert/transform the translator-made file into importable formats into the company's back-end business system or ERP. This can be achieved by using an integrated program, integrated "mapper" integrated or integrated graphical standard "mapper", using standard data transformation languages ​​such as XSLT. The final step is to import the changed file (or database) into the company's back-end system.
For the "exit" document, the process for integrated EDI is to export the file (or read the database) from the company's information system and convert the file to the appropriate format for the translator. The translation software will then "validate" the EDI file it sends to ensure that the file meets the standards agreed by the trading partner, convert the file to "EDI" format (add the appropriate identifier and control structure) and send the file to partner trading (using protocol appropriate communication).
Another important component of EDI translation software is the complete "audit" of all steps to move business documents between trading partners. The audit ensures that every transaction (which in reality is a business document) can be traced to ensure that they are not lost. If a retailer sends a Purchase Order to a supplier, if the Purchase Order is "lost" anywhere in the business process, the effect is damaging to both businesses. To suppliers, they do not fulfill orders because they have not received them so they lose their business and damage business relationships with their retail clients. For resellers, they have stock outages and the effect of losing sales, reducing customer service and ultimately lowering profits.
In terminology EDI "in" and "out" refers to the direction of EDI document transmission in relation to a particular system, not the direction of merchandise, money or other things represented by the document. For example, an EDI document that tells the warehouse to make outgoing shipments is an incoming document that relates to the computer system of the warehouse. This is an outbound document in relation to the manufacturer or dealer who submitted the document.
Advantages of paper system
EDI and other similar technologies save companies money by providing alternatives, or replacing, information flows that require a lot of human interaction and paper documents. Even when paper documents are maintained in parallel with EDI exchanges, for example printed delivery manifests, electronic exchanges, and data use from such exchanges reduce the cost of handling the sorting, distribution, organizing and searching of paper documents. EDI and similar technologies allow companies to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry. Another advantage of EDI is the opportunity to reduce or eliminate manual data entry errors, such as delivery errors and billing, as EDI eliminates the need to rekey documents on the destination side. One very important advantage of EDI over paper documents is the speed at which trading partners receive and enter information into their systems thereby greatly reducing cycle times. For this reason, EDI can be an important component of a just-in-time production system.
According to a 2008 Aberdeen report "A Comparison of Worldwide Empowerment Suppliers", only 34% of electronic purchase orders are transmitted electronically in North America. In EMEA, 36% of orders are shipped electronically and in APAC, 41% of orders are shipped electronically. They also reported that the average paper demand to order the company costs $ 37.45 in North America, $ 42.90 at EMEA and $ 23.90 at APAC. With EDI demand for ordering costs reduced to $ 23.83 in North America, $ 34.05 in EMEA and $ 14.78 at APAC.
Obstacles to implementation
There are some barriers to adopting electronic data exchange. One of the most significant obstacles is the change in the accompanying business processes. Existing business processes built around paper handling may not be suitable for EDI and will require changes to accommodate the automated processing of business documents. For example, a business can receive most of their goods with a 1 or 2 day delivery and all their invoices by mail. Therefore the existing process can assume that the goods are usually received before the invoice. With EDI, an invoice will usually be sent when the freighter and therefore will require a process that handles a large number of invoices that the corresponding item has not received.
Another significant obstacle is the cost of time and money in the initial set-up. Initial costs and time arising from implementation, adjustment, and training can be costly. It is important to choose the right level of integration to suit your business needs. For businesses with relatively few transactions with EDI-based partners, it may make sense for businesses to implement cheap "rip and read" solutions, where the EDI format is printed in human readable form and people, not computers, respond to the transaction. Another alternative is the EDI solution being outsourced provided by the EDI "Service Bureaus". For other businesses, the adoption of integrated EDI solutions may be necessary because the increased trading volume brought by EDI forces them to reimplement their order processing processing business.
The main obstacle to successful EDI implementation is the perception of many businesses having EDI properties. Many see EDI from a technical point of view that EDI is a data format; it would be more accurate to take a business view that EDI is a system for exchanging business documents with external entities, and integrating data from those documents into the company's internal systems. Successful implementation of EDI takes into account the effects of externally generated information on their internal systems and validates the business information it receives. For example, allowing suppliers to update the Account Payables system of retailers without proper checks and balances would put the company at significant risk. New business for EDI implementation should understand the underlying business processes and apply appropriate judgments.
Recognition
Below is a general recognition of EDI
- Communication Status - Show transmission complete
- MDN (Message Disposition Notice) - AS2 only, shows readable messages
- Functional Recognition - usually "997" in ANSI, or "CONTRA" in EDIFACT, which indicates the message content is verified against its template, and notifies if the transaction is posted to the recipient's electronic system.
- Business Level Recognition - the final indicator indicates whether the transaction is received by the recipient or not.
See also
- Cost and Expense Recovery System (ECRS)
- Extract, modify, load (ETL)
- Official Electronic Data Exchange Standard (LEDES)
References
Further reading
- Gengeswari, K. and Abu Bakar Abdul Hamid (2010). "Integration of electronic data exchange: reviews", Humanitarian Journal , ISSNÃ, 1675-1930
External links
- "E-Procurement - Integration of Electronic Data Comes of Age" - Article from the Director of European Financial Journal
- EDI Protocols - Overview of the various protocols and formats used in the EDI network
- EDI Standards - Overview of the various standard EDI file format available.
Source of the article : Wikipedia
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