Whyat 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

By Ken Kinlock at kenkinlock@gmail.com

What is Financial EDI?

Government EDI Definitions

Find out about FEATS and Fair Promise

Loren Data, GXS and Daisychaining

Written by Scott Koegler
In the early 1970s MCI filed an antitrust suit against AT&T alleging that AT&T held a monopoly position in the telecommunications industry. A part of its claim was that MCI was unable to compete fairly against AT&T because of pricing and access control AT&T held. Consumers at that time had few choices in long distance carriers because AT&T restricted the ways that MCI was able to offer its services. All that changed in 1980 when MCI won $1.8 billion in damages from AT&T and the Department of Justice led the breakup of the Bell System. But what does that have to do with today's supply chain? In December 2010 Loren Data Corp filed an antitrust suit against GXS, Inc. alleging that GXS used its market position by denying Loren Data Corp competitive access to its network, while granting similar access to other competitors.
Read more about Loren Data, GXS and Daisychaining

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.
Read more

Find out about EDI Global Identifiers and EDI Directories

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.
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Find out about Context and PROMISES


EDI VANs Are Undefined At Best

VAN (Value Added Network) has history but no formal defining document. It isn't part of the X12 and isn't anywhere required. There is a lack of an existing generally accepted definition of what a VAN is. We will tie this in with the notion that they exist for the purpose of promoting and enabling transfer of data between trading partners, but that they are not a requirement of the process or infrastructure. Earlier this year, I wrote on "What Is EDI? - A Definition and History". I concentrated more on the standardization of DOCUMENTS, not how to exchange them. I covered how the Transportation Data Coordinating Committee (TDCC) morphed into the American National Standards Institute (ANSI) and became the ANSI X12 Committee and how on the other side of the ocean, standards for documents used in international trade, called Tradacoms , were developed. These bodies adequately took care of controls for individual documents and multiple documents (mailbags, etc.), but nary a word about actual delivery to the trading partner. It was left up to the user, but the vendors jumped into the drivers seat.

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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.

Read more
If you would have asked a B2B practitioner a decade ago whether EDI would still be in use ten years from now, chances are high that he or she would have predicted no. With the emergence of the Internet and new XML technologies, EDI was sure to be replaced by “newer, better, more powerful” e-commerce standards. Yet, as we approach the half way point in 2008, EDI continues to be the dominant standard in B2B globally. Not only does EDI remain popular, but its use is growing more accepted, not less.

Find out about Dreams and Fair Promise

Supply Chain Management (SCM)
The importance of electronic commerce to your supply chain
Supply Chain Synchronization
Defining Supply Chain Management: a historical perspective and practical guidelines

What is a Social Supply Chain?

Social supply chain is using "social media technology" all across the entire supply chain : from supplier's suppliers to customer's customers. It means integration of social media technologies (collaboration, sharing) to connect and encompass the participants across the whole supply chain.
EDI Tool Box What is EDI?
EDI Mapping
Blogs about EDI and eCommerce
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
Who wrote all this good stuff?

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:
Recently I have been seeing what my almost thirty years of EDI experience has prepared me for. Working with a private corporation that operates with an almost virtual national headquarters, I have been challenged with a wide variety of assignments. The skill that got me into this was a good rapport with the senior manager of the corporation (an LLC). I attribute my acquiring this skill because an EDI person is constantly working with both business managers and technical managers.

Cloud Computing, Why Didn't I Think of It?

Cloud computing is a style of computing in which dynamically scalable and often virtual resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them.

At first, it sounds like a brand new concept. But 40 years ago we were doing “time sharing”. Big in-house computers were reserved for the likes of payroll. Personal computers were not invented yet. We could do all sorts of exotic things on time sharing like a growth rate formula or a graph. We could even do a stone age version of EDI by sending data transmissions from paper tape to paper tape! The transmission errors were affectionately referred to as “birds on the wire”.) After a while, we did studies and concluded that it would be more efficient to run everything in-house. My simple conclusion is that cloud computing is time sharing after 40 years of innovation.

Five years ago, cloud computing discussion was still a baby. Big companies would not consider using cloud services. Amazon.com’s cloud was still in development. Salesforce.com was far away from its cloud-based application development platform. Now days, big corporations utilize the cloud for everything but their very sensitive jobs. Amazon and Salesforce are only among many offering services. Where will we be in five years? Probably getting better at managing the cloud resources. Better standards will come about to let cloud services communicate more readily with each other. We will have more security, portability and accessibility. We will see individual business units contracting for cloud services (and CIO's fighting them like they did Web browsers and PC's).

The biggest benefit for EDI will be when cloud-to-cloud communications becomes commonplace. A group of clouds will work like one cloud does now.

Imagine that a company will not have to invest in a large scale EDI translator, software, etc. What is to prevent disconnected business units in a company from just contracting separately for their own EDI services?

This could spell the end of the VAN as we know it. Everything combined, cloud-to-cloud could revolutionize the whole industry – except for companies who insist on amortizing their huge investments in software, hardware and big, bureaucratic EDI departments.

As Yogi Berra once reputably said: "EDI ain't over till the fat lady sings"

See the full article on Cloud Opportunity

See my other blogs

See other blogs about EDI

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.

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

See Our Special Section on Social Media

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See Our Electronic Commerce Glossary

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