What Is EDI?


Electronic Commerce:

Combination of:

· Business strategies;

· Business processes;

· People and technology required to achieve supply chain integration.

EDI Definition

Electronic Data Interchange (EDI) is, in simplest terms, computer to computer transmission of business documents such as purchase orders, material releases and invoices, in a format easily recognizable by different companies.

EDI is not:

A real time on-line system where you can directly connect to your supplier's computer to inquire about purchase order and inventory status.

Why use EDI?

EDI enables companies to complete business transactions faster with less expense and fewer errors. There are many other indirect benefits that derive from this increased control and efficiency, such as faster transaction processing, increased accuracy and better information access, among others.

How does EDI work?

EDI isn't really very complicated or highly technical. It's just an extension of what most companies are doing already. That is, businesses today commonly use computers to hold and process information used in the management of various business functions such as purchasing, inventory management, payables and receivables and so forth. The computer is the repository of all information that will be included in business transaction documents. EDI simply takes these computer system capabilities one step further by adding the transmission of the business documents themselves. Purchase orders, invoices and the like are transmitted between trading partners over telephone lines in computer readable form.
EDI thereby makes it possible to exchange data, without ever rekeying the original transaction, information stored in the sender's internal computer files. Sending business documents computer to computer is more efficient than printing the data stored in internal computer files, mailing paper documents, and having a trading partner's clerical staff enter the same document data into it's own computer system. The elimination of paper documents reduces paper processing costs and clerical labor. Reducing document processing results in fewer mistakes and better and faster customer service.

What do I need to do EDI?

In order to communicate with your trading partners using EDI, you need a computer, modem, phone line and EDI translation/communication software. In addition, an interface program will have to be written between the EDI software and the computer application with which you wish to exchange documents. Many companies now use the Internet and send/receive Web (HTML) documents and/or offer "XML" (eXtensible Markup Language) files instead of EDI.

How are computers able to exchange business documents?

Standard message formats have been adopted by specific industries which allow computers to exchange common business documents. For example, formats have been programmed to arrange purchase order or invoice data in a completely predictable form, a form that computers can process. Translating documents from a company's internal format to an industry accepted EDI format is done with the help of software, available commercially, or through programming completed by a company's own data processing staff.

In order for the sender and receiver to communicate electronically, both must use the same industry standard format. Once a business document has been formatted for EDI, it can be sent to a trading partner's computer where it can be converted back to human-readable form as well as stored for further computer processing.

What is an EDI Value Added Network?

EDI trading partners traditionally found it more practical to use EDI Value Added Networks, commonly referred to as VAN's, rather than transmit data directly to each other. The EDI VAN acts as a clearinghouse and offers a variety of services that make EDI more accessible and cost-effective. Newer technologies use the Internet or an "extranet" such as "ANX" (Automotive Network eXchange).

How does a VAN improve EDI communications?

The role of the VAN includes maintaining the systems and equipment that allow incompatible sender and receiver equipment to "speak" with each other.

Also, VAN's make it possible to complete all of a company's communications in a single transmission, thus freeing the sender from transmitting documents one by one to each trading partner, a process which could prove far too costly if done in-house.

The EDI network can also provide many additional services, including development of EDI implementation plans, programs to assist a company's trading partners to also become EDI active, in-network translation from one EDI standard to another, conversion of EDI data to readable format and subsequent mailing or facsimile transmission to a company's non-EDI trading partners, and much more.

What is an EDI mailbox?

The term mailbox is used to refer to a unique identified area of information storage within a computer, a point of private user access and data consolidation to which EDI transmissions are sent and held until retrieved by the individual EDI VAN customer. Each VAN participant can retrieve documents from its assigned mailbox whenever convenient to it's own operations.

All major VAN's communicate with each other via an interconnect to transmit data from one network to another. Before signing up with any VAN, verify that they provide this service and how often they interconnect with other VAN's. A VAN should not hold data that is to be transmitted to your trading partner for more than one hour.

Start-Up Checklist:

· Network availability
· Obtain required EDI documents from trading partner
· Develop cross-reference to application data system
· Communications - Line Type and Speed
· Line protocol, Transmission Mode
· Transmission Initiation
· Install hardware and translation software
· Create application data file (ADF)
· Map data to ADF
· Test translation software with existing data
· Develop internal edits and controls
· Establish "Go-Live" date
· Determine length of parallel mode operations
· Document "Trouble-Shooting" procedures
· Fine tune existing system/procedures
· Add other applications, standards, users

See our PowerPoint presentation
What is EDI?

What is Financial EDI?

Government EDI Definitions

By Ken Kinlock at kenkinlock@gmail.com

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ec-bp.com The Forum for Supply Chain Integration

ec-bp was established in 2005 as the advocate for lowering the barriers to the adoption of EDI, and our email newsletter has been published every month since that time. Our focus has expanded beyond EDI to encompas the full gamut of supply chain practices and technologies. In addition, our readership has grown to become the largest of any similarly focused publication, and has expanded to include more than 90,000 professionals involved in nearly every aspect of the supply chain.

Today’s supply chain is more than simple transport of EDI documents. The complexity of maintaining compliance with trading partners, managing the ever increasing amount of data, and analyzing that data to drive constant improvement in processes and service take supply chain professionals far beyond the basics of mapping EDI documents.

What is EDI? - A Definition and a History

Your first thought might be: “I know already or I wouldn't be reading this publication”. Yes, we will give you the “schoolbook” definition. We will even tell you a brief history of EDI (Electronic Data Interchange), but our real purpose is to give you the Year 2013 definition of EDI; and back it up with an expert opinion.Developed in the United States in the mid-1960s, the idea of what became known as EDI today originated with a group of railroad companies.
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Find out about EDI Global Identifiers and EDI Directories

The CIO and EDI

We have been commenting several times about “who owns EDI”, but irrespective of the outcome, the CIO has a role in the software/hardware end of EDI. In the near future, the EDI scenario starts to get more interesting with the development of cloud technology.

Overseeing an EDI department used to be simple. Buy software, negotiate a VAN connection. The hiring of a manager and setting up an EDI department could be under the CIO or not, but the technical implementation was clearly in the realm of the CIO.

Partner hookups and standards conventions were really business issues; but if the department was under the CIO, they were budget issues.

An increasing number of CIOs are dabbling in cloud computing, drawn by promises of its scalability, affordability and more powerful computing ability.

WOW! Cannot believe how a CIO is bombarded on a daily basis with new ideas for clouds! In one day, I received: “Cloud Infrastructure Is yours fully leveraged?”; “Integrity in the Cloud: Can you trust your cloud provider?”; “Cloud Forecast 2015 Leading CIOs share their strategies.”; “Know Your Cloud Rights Gartner's guide for enterprise decision-makers.” AND think about it: EDI is about at the top of applications that benefit from the cloud!

According to SearchCloudComputing.com, private cloud (also called internal cloud or corporate cloud) is a marketing term for a proprietary computing architecture that provides hosted services to a limited number of people behind a firewall.

See the full article on the CIO and EDI

See my other blogs

See other blogs about EDI
Supply Chain Control Tower

Supply Chain Management Control Towers

Control towers are used in many industries for different purposes: airports and railroads use them for traffic control; power plants have control rooms to monitor operations; and third party logistics providers use them to track transportation activities. These are places where operations run well. Why not a


in order to monitor and assure your supply? Talk to us, we build them!

So just what is an SCM Control Tower? What are the functions of a Supply Chain Control Tower? Who staffs your Supply Chain Management Control Tower?

If you use an EDI VAN for your business, this message is for you. Move past the ancient VAN technology. JWH EDI Services Electronic Commerce Messaging System will bring your EDI operation into the 21st Century. The power of our global EDI network is available on your server, your cloud platform or your application. AND you cannot beat our prices.
You can connect and communicate with all your customers and trading partners through the JWH EDI Services Electronic Commerce Messaging System - Connect with trading partners around the world on a single Network-as-a-Service platform, get real-time transaction visibility and eliminate those manual network processes. It is a pay as you need model. We track all interchanges from the moment they enter the system, along every step across the network, and through the delivery confirmation.

How can we help you? Contact us: Ken Kinlock at kenkinlock@gmail.com
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What would happen if a mid-size company replaced its ERP system from one brand to another? What are the effects on the EDI system? Yes it does happen, and integration never seems to be a “natural” where EDI and ERP fit together like they had the same mother! SAP IDOC comes the closest unless you find the right “mid-ware”.

Would all the EDI coding be lost? Would manual systems have to be used until the EDI gets re-integrated from scratch? Neither ERP or EDI could be replaced piece by piece. If the data exchange layer between your EDI system and ERP system is well defined, you may not have any effect; but, if the EDI system is well documented including mapping specs, it should ease the pain of ERP system changes.

Read more about EDI and ERP
EDI, A Lost Art, but Learnable.
EDI a lost art, high turnover, nobody still understands it and needs training, requirements change. companies don’t invest in training anymore. Training is even more important now.

Skills of an EDI specialist are more in analysis of business documents and understanding of the business issues. This is far more important than knowledge of a particular piece of software. An EDI specialist can quickly learn a new tool as required. I am talking more about training for an in-place specialist in order to improve their skills. I am thinking of such topics as EDI best practices, implementing non-core EDI transactions, using POS 852 Data to improve planning, automating PO Change in the workflow process.

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EDI Recruiters

Some of the folks you will run into at “U Connect” are RECRUITERS. Don't have to look for them. They will find you. They are interested in both those who do the hiring and those who want to be hired. Talk to them, they are all good people.

I have always been interested in the EDI job market because as a project manager I depend on finding the best staff I can. Like everything else, recruiting is predominately outsourced to agencies. Used to be that most agencies “couldn't even spell EDI”. But as the industry has matured, so have the agencies. Their approach to advertising seems to take three general approaches:

Read more about EDI Recruiters

EDI System Tune Up

Just like your car, your EDI system requires a periodic “tune up”. You need to step back and see if your system is giving you the “best mileage for your dollar”. Remember, things change over time and something that worked well last year might not now because of external changes in your business process or internal changes in the interfacing systems. Here is what I would recommend:

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Do We Need VANs?

With supply chain platforms providing the E to E linkage and Managed File Transfer Services- do VANS still play a role? The pros and cons of VANs, AS2, FTP, Electronic Commerce Communications Providers. We will be evaluating TRANSPORT, not mapping, Web portals, or other services which could be performed by a VAN as well as by other EDI service providers.

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Certifications for EDI Professionals

Anyone involved in the EDI industry has probably questioned what certification is available. How do we know the qualifications of a potential hire? Recruiters are used to “black and white” qualifications that make their role easier. Every once in a while this topic surfaces in discussions on, for example, LinkedIn. Let's elaborate on what we mean by EDI certification and why there is no “black and “white” answer.

Read more

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Go For Remote

We have had a lot of interest this year in “remote workers”. Now is the time to talk more about the possibilities of extending this practice. We have the positive support of workers: they love the idea. Let's address the data security people: my response is, as expected if you have read what I write, is the CLOUD. Now the immediate managers: it is no different than any other project you have managed (watch me, I will show you). Top level management: think of the savings in these huge buildings you have: funding a remote worker is less than your square foot charge to house him.

Read more about Go For Remote
Our HAND TOOL WebSite is intended in aiding you to locate HAND TOOL suppliers. You may search by product or by manufacturer. We add both products and manufacturers, so keep checking back. In addition we are a full service MRO (Maintenance, Repair and Operational Supplies) supplier. If you are in the construction or farming business, we are your source.
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EDI Tool Box What is EDI?
EDI Mapping
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Financial EDI
EDI with the Government
Electronic Commerce Communications Providers
EDI and EC Vendors
EDI Project Management
Transportation EDI
History of EDI
Unique Global Identity for EDI Messages
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