electronic data interchange

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electronic data interchange

  1. 1. Why are we here today ??? 1
  2. 2. W O W ! > 90,000,000,000,000 Greater than 90 TRILLION sheets of paper are produced by American business annually 2
  3. 3. EC Strategy Move From Paper Intensive Non - Integrated Automated Integrated Create Data Once - Use It Many Times! 3
  4. 4. The World of Electronic Commerce EC EC JIT Tech Data Barcoding EI EBB EDI VMI InterNet CE E-mail FAX 4
  5. 5. MODULE 1 OBJECTIVES At the completion of this module, you will be able to: – – – – Define EDI Explain EDI Terminology Describe the background of EDI Explain some benefits of EDI 5
  6. 6. ELECTRONIC DATA INTERCHANGE • Definitions • Background • Benefits Module 1 6
  7. 7. ELECTRONIC DATA INTERCHANGE TRANSACTION DATA COMPANY A COMPANY B EDI is the computer-to-computer exchange of routine business documents (data) in a standard format between companies. 7
  8. 8. VALUE ADDED NETWORK (VAN) Buyer Post Office Selle r 8
  9. 9. TRADING PARTNER EDI Trading partners are companies that do business via EDI . 9
  10. 10. TRANSACTION SET PO EDI Purchase Order (PO) Purchaser A transaction set refers to a type of electronic document. 10
  11. 11. PAPER DOCUMENT INTERCHANGE Data Entry PO Computer Computer Post Office Purchaser Invoice 11
  12. 12. ELECTRONIC DATA INTERCHANGE Data Entry PO Computer Computer VAN Purchaser Invoice 12
  13. 13. Implementation EC is Cross Functional Account Executives Accounting Shipping EDI has an impact on all departments Order Processing Infomation Systems 13
  14. 14. Implementation Considerations for System Design • Determine Requirements • Determine Readiness • Select Participants EDI System 14
  15. 15. Implementation Support areas Liaison Areas Accounting Marketing Order Processing Sales Transportation Technical Areas Electronic Commerce Information Systems 15
  16. 16. ?? ?? ?? ? Questions ?? ?? ?? 16
  17. 17. ELECTRONIC DATA INTERCHANGE Components Module 2 17
  18. 18. MODULE 2 OBJECTIVES At the completion of this module, you will be able to: – List the four major components of an EDI system – Recall the terms VAN, ANSI X-12,and their meaning – Recall reasons why companies are doing EDI 18
  19. 19. EDI Components Hardware Standards EDI Software Communications 19
  20. 20. Transaction Set PO EDI PO Purchaser Transaction set refers to a type of electronic document 20
  21. 21. WITH STANDARDIZATION Type a who'll bunch of things in her gain. M ake it look like the re are words written on this page . I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. M ake it look like there are words written on this page. I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This pre sentation is very long. Type a who'll bunch of things in he r gain. M ake it look like the re are words written on this page . I am very warm. This presentation is very long. M ake it look like the re are words written on this page . I am very warm. This presentation is very long. Type a who' ll bunch of things in her gain. M ake it look like there are words written on this page. I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is very long. Type a who will bunch of things in he r again. M ake it look like the re are words written on this page . I am very warm. This presentation is ve ry long. M ake it look like there are words written on this page . I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. M ake it look like there are words written on this page . I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is ve ry long. 21
  22. 22. Components ELECTRONIC DATA INTERCHANGE STANDARDS ANSI X12 UN/EDIFAC T 22
  23. 23. Other Standards Transportation Data Coordinating Committee (TDCC) Uniform Communications Standard (UCS) Warehouse Information Network (WINS) Voluntary Inter-Industry Communication Standard (VICS) EDI for Administration, Commerce, and Trade (EDIFACT) 23
  24. 24. TYPES OF BUSINESS TRANSACTIONS VIA EDI Other 15% Invoices 24% Shipping Note 14% Credit/Debi 3% t Purchase Orders 44% 24
  25. 25. A Standard Language Type a who'll bunch of things in her gain. M ake it look like there are words writte n on this page. I am very warm. This presentation is very long. M ake it look like there are words written on this page . I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. M ake it look like there are words written on this page. I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in he r gain. M ake it look like the re are words written on this page . I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is ve ry long. Type a who' ll bunch of things in her gain. M ake it look like there are words written on this page. I am very warm. This presentation is very long. M ake it look like there are words written on this page. I am very warm. This presentation is very long. Type a who will bunch of things in he r again. M ake it look like the re are words written on this page . I am very warm. This presentation is very long. M ake it look like the re are words written on this page. I am very warm. This presentation is ve ry long. Type a who'll bunch of things in her gain. M ake it look like there are words written on this page. I am very warm. This pre sentation is very long. M ake it look like the re are words written on this page. I am very warm. This presentation is ve ry long. 25
  26. 26. How EDI Works ! The APL Group quote 664 danbury Ct Wilson, ct RFQ # 1234 06/07/95 1 WIDGET #5678 2 dz gizmos ST* 843 12345 NTE**Ship Complete N1 *SE* The Apl Grp Inc... N3 *664 DANBURY Converts Internal Data Format to ANSI X12 (outbound) Converts ANSI X12 Standard format to Internal Format (inbound) 26
  27. 27. EDI Components Hardware Standards EDI Software Communications 27
  28. 28. EDI Software 1. Document Support Database 4. Translation Communications 2. Mapping X12 3. Standards Support 28
  29. 29. EDI Components Hardware Standards EDI Software Communications 29
  30. 30. Hardware 30
  31. 31. EDI Components Hardware Standards EDI Software Communications 31
  32. 32. Value Added Network (VAN) U.S. Post Office Buyer Seller 32
  33. 33. Point-to-Point: EDI Without a VAN Buyer Supplier 1 A 2 B 3 C 4 D 33
  34. 34. Value Added Network (VAN): Buyer Supplier 1 A 2 B 3 C 4 D 34
  35. 35. Interconnect Strategy GE VAN AT&T VAN 35
  36. 36. ---EDI Process-----Integrated Systems--- Business Management System Business Management System Purchase Order Accounting Shipping EDI Receiving Accounting Purchase Order Acknowledgment Manufacturing Purchasing Order Processing Sales/Order Processing 36
  37. 37. Data integration Issues Database Part List New Data Partner’s Part List Cross-referencing Database Integrated Applications EDI Software Bridge Between Applications Networking Users 37
  38. 38. EC GROWTH 45,000 Number of Registered EDI Users. 40,000 . 35,000 30,000 25,000 Average Annual Growth ~ 45% 20,000 15,000 10,000 5,000 0 88 *Source: EDI Forum 89 90 91 92 93 94 38
  39. 39. Why do Companies use EDI? 60% Percent 50% Customer/supplier requirement 40% 30% Quick access to data Cost savings 20% 10% Data accuracy/error reduction 0% 1992 1993 1994 1995 1996 In 1996, EDI grew substantially due to customer / major supplier requirements or requests. EDI is an element used to streamline business processes. 39
  40. 40. Government Health care Retail Grocery Policy EDI USERS Advertisin g Construction Banks Transportation Insuranc e Manufacturing Chemical Electronics Petroleum Automotive 40
  41. 41. ?? ?? ?? ? Questions ?? ?? ?? 41
  42. 42. Manufacturing Focus EFT BPR Internet (IT) EDI JIT VMI ERS Bar-Code Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE 42
  43. 43. EDI BENEFITS Increased Business Opportunities Reduced Inventory More Accurate Records and Decision-making Information Lower Data Entry Costs 43
  44. 44. EDI BENEFITS Decreased Mailing Costs Reduction In Order Time Greater Customer Satisfaction Better Cash Management 44
  45. 45. Bar-Code 45
  46. 46. EDI and Business Processes EFT BPR Internet (IT) EDI JIT VMI ERS Bar-Code Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE 46
  47. 47. ?? ?? ?? ? Questions ?? ?? ?? 47
  48. 48. ELECTRONIC DATA INTERCHANGE EDI Translation Module 3 48
  49. 49. Module 3 Objectives At the completion of this module, you will be able to: – Relate the paper document components to EDI transaction set – Recall the sections of an EDI transaction set 49
  50. 50. ANSI ASC X12 Standard Purchase Order Purchase Order Facilitates electronic interchange of business documents 50
  51. 51. Transaction Set Composition File = Transaction Set Record = Data Segment Field = Data Elements 51
  52. 52. Paper Vs. EDI Document Paper Document = EDI Transaction Set Date: 12/31/92 Purchase Order # 4001 PURCHASE ORDER Vendor: ABC Supplies P.O. Box 180 Baltimore, MD 21239 Quantity 2 Ship To: Cleveland ECRC 2415 Woodland Avenue Cleveland, OH 44115 Description Legal Pads LP8X11 Price Amount $8.00/DZ $16.00 ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 52
  53. 53. Envelopes Address Information Information Receipt Information Routing Date and Time Stamp Audit and Version Control 53
  54. 54. Envelope Elements Identification Information l tro on on C h ati c a t or m B nf I Ad In dre fo rm ssin at g ion 54
  55. 55. Trading Partner Enveloping Issues • Envelope Identiffers • Addressing codes • Types of control numbers • Control number sequence • Version of standards 55
  56. 56. Envelope Structure ISA Interchange Interchange IEA 56
  57. 57. Paper Vs. EDI Document Envelope = Interchange Cleveland ECRC [electronic address] ABC Company [electronic address] ISA*05*0000000000*01*PASSWORD01*01 *SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503* U*00304* 123456789*1*T*|^ GS... ST... . . SE... GE... IEA*1*123456789^ 57
  58. 58. Paper Vs. EDI Document Folder = Functional Group GS*PO*CECRC01*DISC*95091 9*1426* 0001*X*003050^ ST*850*1001 . . . SE*17*1001 GE*1*0001 58
  59. 59. Envelope Structure ISA ISA*05*0000000000*01*PASSWORD01*01 *SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503* U*00304* 123456789*1*T*|^ GS... ST... . . SE... GE... IEA*1*123456789^ GS GE IEA 59
  60. 60. Transaction Set ISA GS ST Transaction Set ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland *OH* 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 SE GE IEA 60
  61. 61. Paper Vs. EDI Document Document = Transaction Set ST*850*0001^ BEG*00*NE*4001**921231^ Date: 12/31/92 Purchase Order # 4001 PURCHASE ORDER Vendor: ABC Supplies Ship To: Cleveland ECRC P.O. Box 180 2415 Woodland Avenue Baltimore, MD 21239 Cleveland, OH 44115 Quantity Description 2 Legal Pads LP8X11 Document Price Amount $16.00 $8.00/DZ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 Transaction Set 850 61
  62. 62. Data Segment Date: Purchase Order # PURCHASE ORDER Vendor: Ship To: Line Item = Data Segment Quantity 2 Description Legal Pads LP8X11 Price $8.00/DZ Amount $16.00 PO1*1*2*DZ*8.00**VP*LP8X11^ 62
  63. 63. Paper Vs. EDI Document 4001 Date: 12/31/92 Purchase Order # 4001 PURCHASE ORDER Vendor: ABC Supplies P.O. Box 180 Baltimore, MD 21239 Ship To: Cleveland ECRC 2415 Woodland Avenue Cleveland, OH 44115 Data Elements N1*VN*ABC Supplies^ 63
  64. 64. Paper Vs. EDI Document Data Segment Delimiter Code = Qualifier N1*VN*ABC Supplies^ Separator = Element Delimiter 64
  65. 65. Summary Communications Protocol ISA ISA*05*0000000000*01*PASSWORD01*01* SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503*U* 00304* 123456789*1*T*|^ GS... ST... . . SE... GE... IEA*1*123456789^ GS ST SE GE IEA 65
  66. 66. Module 3 Summary – The paper business document and its components can be compared with the EDI transaction set. – EDI enveloping can be compared functionally to postal envelopes. – EDI Software translates business documents into a standard format for transmission 66
  67. 67. ?? ?? ?? ? Questions ?? ?? ?? 67
  68. 68. Organizational Issues in EC/EDI Implementation Move From Paper Intensive Non - Integrated • • • • • • • Automated Integrated Mind Sets Cultural Change Conveying Key Messages Building a Case for Action Bottom Up Support Selecting EC Technologies 68 Linking EC Technologies to Business Results
  69. 69. Organizational Issues in EC/EDI Implementation Two Key Messages: – Here is where we are and why we can’t stay here. – This is the company we must become. •Supplier/Customer Mandate •Increased Competition •Globlization of the Marketplace •Reduce Costs People must buy-in! 69
  70. 70. Organizational Issues in EC/EDI Implementation Elements of an effective case for action: – – – – – Business context Problem Marketplace demands Diagnosis Cost of no action 70
  71. 71. Organizational Issues in EC/EDI Implementation Increased competition and a rapidly changing business environment have forced the implementation of technology in businesses of every size. Implementing Electronic Commerce can position your company to compete with a wide range of competitors. A small business has the advantage of skipping layers of management when implementing electronic commerce. Execution can happen quickly, risk free, and at a low cost. 71
  72. 72. Organizational Issues in EC/EDI Implementation How to bring people into the change process. “Start with reality. Get all the facts out. Give people the rationale for change, laying it out in the clearest, most dramatic terms. When everybody gets the same facts, they’ll generally come to the same conclusions.” J. Welch, CEO of General Electric “To inaugurate large-scale change, you may have to create the burning platform. You have to give people a reason to do something differently. Scaring people isn’t the answer. You have to appeal to them. The more they understand why you want to change, the easier it is to commit to it.” 72 L. Bossidy, CEO of Allied-Signal Fortune Magazine, Dec 13, 1993
  73. 73. Organizational Issues in EC/EDI Implementation The cost of integration in the absence of a cultural change actually are higher. This is true because a new technical system has been introduced within the old culture. – – – – – The organization retains redundant processes. Non concurrent processes slow the cycle. Hand-offs further slow the process. Creates an environment for error. Rework is a characteristic. These findings are especially pertinent today because of the need to lower costs, the requirements to be flexible and the ability to take advantage of the opportunities. 73
  74. 74. Electronic Communication(EC) Vision for the Future Virtual Enterprise 3,000 Pound Gorilla Prime Contractor Prime Contractor Vendor 1st tier Vendor Vendor 1st tier 74 1st tier 2nd tier
  75. 75. ?? ?? ?? ? Questions ?? ?? ?? 75

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