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Electronic Data Interchange�(EDI)

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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

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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

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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

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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

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Disadvantages

  • High Dependence on the participation of trading partners

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  • Costly for smaller companies

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  • Difficult to agree on standard to be used

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http://www.edi-guide.com/risks-of-edi.htm

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Retailer A

Retailer C

Retailer B

Retailer D

Wholesaler A

Wholesaler B

Wholesaler C

Wholesaler D

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Original Model

Retailer A

Retailer C

Retailer B

Retailer D

Wholesaler A

Wholesaler B

Wholesaler C

Wholesaler D

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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

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VAN Model

Retailer A

Retailer C

Retailer B

Retailer D

Wholesaler A

Wholesaler B

Wholesaler C

Wholesaler D

Value-added Network

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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

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Options

  • EMAIL

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  • XML

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  • DIRECT ROUTING

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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

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Direct Routing

Retailer A

Retailer C

Retailer B

Retailer D

Wholesaler A

Wholesaler B

Wholesaler C

Wholesaler D

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Who Needs EDI or a VAN?

Companies still need…

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  • Assistance with formatting problems

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  • Authentication of customers

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EDI Standards…

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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

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Example of ASC X12

Note: Linefeeds and "(Continued)" notes inserted for clarity

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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*(Continued) *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

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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

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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

​

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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

​

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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

​

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UCS Implementation Guidelines

  • Data Administration
  • Ordering
  • Logistics
  • Financial
  • Business Support

http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

​

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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

​

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UCS Internet Standards

  • Design
  • E-commerce Transport Communication Guidelines

http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

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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

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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

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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

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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

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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

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Things you may want to remember . . . � (for the test)

  • EDI – Electronic Data Interchange

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  • VAN – Value-Added Network

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  • ASC X12 is moving towards integration with XML formatting

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  • EDIFACT – international set of EDI standards

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  • In the near future EDI will be vital for business domestically and abroad

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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.