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Electronic Data Interchange (EDI)

Electronic Data Interchange (EDI). Rebecca Fouts Laura Frye Laura Gray Matt Muller Ariana Pelayo. Introduction to EDI…. What is EDI?

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Electronic Data Interchange (EDI)

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  1. Electronic Data Interchange(EDI) Rebecca Fouts Laura Frye Laura Gray Matt Muller Ariana Pelayo

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. Retailer A Wholesaler A Retailer B Wholesaler B Retailer C Wholesaler C Wholesaler D Retailer D

  8. Original Model Retailer A Wholesaler A Retailer B Wholesaler B Retailer C Wholesaler C Wholesaler D Retailer D

  9. 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

  10. VAN Model Retailer A Wholesaler A Retailer B Wholesaler B Value-added Network Retailer C Wholesaler C Retailer D Wholesaler D

  11. 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

  12. Options • EMAIL • XML • DIRECT ROUTING

  13. 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

  14. Direct Routing Retailer A Wholesaler A Retailer B Wholesaler B Retailer C Wholesaler C Wholesaler D Retailer D

  15. Who Needs EDI or a VAN? Companies still need… • Assistance with formatting problems • Authentication of customers EDI Standards…

  16. 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

  17. 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*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

  18. 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

  19. 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

  20. 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

  21. 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

  22. UCS Implementation Guidelines • Data Administration • Ordering • Logistics • Financial • Business Support http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

  23. 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

  24. UCS Internet Standards • Design • E-commerce Transport Communication Guidelines http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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.

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