1 electronic data interchange (edi)

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EDI - XML

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1 electronic data interchange (edi)

  1. 1. Electronic Data Interchange (EDI) Atul Kahate [email_address]
  2. 2. EDI and XML <ul><li>XML is a data description language </li></ul><ul><li>It has its roots in EDI </li></ul><ul><li>EDI technology is still in use, but is being replaced with XML </li></ul>
  3. 3. What is EDI? <ul><li>Electronic Data Interchange (EDI) </li></ul><ul><ul><li>Related to the history of XML </li></ul></ul><ul><ul><li>Document exchange standard </li></ul></ul><ul><ul><ul><li>e.g. Purchase Order (PO), Sales Order (SO) </li></ul></ul></ul><ul><ul><li>Documents are inter-related </li></ul></ul><ul><ul><ul><li>But their formats differ! </li></ul></ul></ul><ul><ul><li>Aims at: </li></ul></ul><ul><ul><ul><li>Making formats uniform </li></ul></ul></ul><ul><ul><ul><li>Document exchanges easier </li></ul></ul></ul>
  4. 4. EDI Example <ul><li>Company A wants to buy spare parts from company B </li></ul><ul><ul><li>Company A prepares a Purchase Order (PO) </li></ul></ul><ul><ul><li>Sends it to company B </li></ul></ul><ul><ul><li>Company B sends the goods, and a Sales Order (SO) to B </li></ul></ul><ul><ul><li>Formats of the SO and the PO differ </li></ul></ul>
  5. 5. EDI’s Role <ul><li>Take care of all such mismatches </li></ul><ul><li>Make document exchange easier </li></ul><ul><li>Make it electronic </li></ul><ul><ul><li>Hence the name Electronic Data Interchange (EDI) </li></ul></ul>
  6. 6. EDI Definition <ul><li>Exchange of business documents such as Purchase Orders (PO), Invoices, etc in an electronic format </li></ul>
  7. 7. EDI Characteristics <ul><li>Happens electronically (like emails) </li></ul><ul><li>Little or no manual intervention </li></ul><ul><li>Very fast and accurate </li></ul><ul><li>Little or no clumsy paperwork </li></ul>
  8. 8. EDI Usage <ul><li>Started in the 1960s </li></ul><ul><li>Used mainly by very large organizations </li></ul><ul><ul><li>Doing business with suppliers/customers </li></ul></ul><ul><li>Slowly getting replaced by transactions over the Internet </li></ul>
  9. 9. EDI History <ul><li>Has roots in another innovation </li></ul><ul><li>1964, Sales Manager at American Hospital Supply Company (AHSC) </li></ul><ul><ul><li>Developed a system for its customers (i.e. hospitals) </li></ul></ul><ul><ul><li>Use of punched cards for placing orders </li></ul></ul>
  10. 10. Value Added Network (VAN) <ul><li>Private Networks </li></ul><ul><li>Communications layer over the basic network infrastructure </li></ul><ul><li>Similar to how all parties communicating using emails would need SMTP </li></ul>
  11. 11. VAN Provider <ul><li>Similar to an Internet Service Provider (ISP) </li></ul><ul><li>Provides VAN </li></ul><ul><li>Maintains mailboxes for all the EDI users </li></ul><ul><li>Stores and forwards messages between EDI users </li></ul>
  12. 12. EDI Architecture Diagram Business Software at Sender’s end Standard EDI format Translate Value Added Network (VAN) Store and forward Standard EDI format Store and forward Business Software at Receiver’s end Translate
  13. 13. VAN Approaches <ul><li>Third-party </li></ul><ul><ul><li>Preferred method </li></ul></ul><ul><ul><li>More costly </li></ul></ul><ul><li>In-house </li></ul><ul><ul><li>Complicated </li></ul></ul><ul><ul><li>May be cheaper </li></ul></ul>
  14. 14. EDI Types <ul><li>No EDI </li></ul><ul><li>Partially Integrated EDI </li></ul><ul><li>Fully Integrated EDI </li></ul>
  15. 15. Sample EDI Document <ul><li>Interchange Control Header – Electronic Envelope </li></ul><ul><li>Functional Group Header – Purchase Order </li></ul><ul><li>Transaction Set Header – Purchase Order A100 </li></ul><ul><li>Data Segment Header – Source </li></ul><ul><li>Data Element – Terms of Transaction </li></ul><ul><li>Data Element – Date and Time </li></ul><ul><li>Data Segment Header – Details </li></ul><ul><li>Data Element – Item Number </li></ul><ul><li>Data Element – Item Description </li></ul><ul><li>Data Element – Item Quantity </li></ul><ul><li>Data Element – Item Price </li></ul><ul><li>Transaction Set Footer – Purchase Order A100 </li></ul><ul><li>Functional Group Footer – Purchase Order </li></ul><ul><li>… </li></ul><ul><li>… </li></ul><ul><li>Interchange Control Header – Electronic Envelope </li></ul>
  16. 16. EDI Data Formats <ul><li>Decided by ANSI </li></ul><ul><ul><li>ANSI ASC X12 in North America </li></ul></ul><ul><ul><li>EDIFACT in Europe </li></ul></ul><ul><li>Efforts are on to merge the two </li></ul>
  17. 17. EDI Advantages <ul><li>Reduced lead-time </li></ul><ul><li>Reduction in number of errors </li></ul><ul><li>Reduction in processing costs overall </li></ul><ul><li>Availability of information at all times </li></ul><ul><li>Planning becomes easier </li></ul><ul><li>Long-term relationships between trading partners </li></ul>
  18. 18. EDI Drawbacks <ul><li>Very high initial costs </li></ul><ul><li>Barrier to entry </li></ul><ul><li>Not using EDI is also a problem </li></ul><ul><li>Technologically non-savvy companies cannot use EDI with ease </li></ul>
  19. 19. Emerging Trends <ul><li>Use of EDI over the Internet </li></ul><ul><li>Allows smaller players to use EDI </li></ul><ul><li>Substantial reduction in costs </li></ul><ul><li>Use of XML </li></ul>
  20. 20. EDI and the Internet Web browser XML EDI VAN Provider ASC X12
  21. 21. Thank you! Any Questions?

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