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Electronic data interchange
Electronic Data Interchange (EDI) allows companies to exchange standard business documents like purchase orders and invoices in electronic format without manual intervention. EDI transactions are faster and more accurate than paper processes. EDI involves preparing data, translating it using standard formats, and transmitting documents electronically using a value-added network. While the initial costs are high, EDI can improve productivity and accuracy while reducing errors and paperwork between organizations.
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Electronic data interchange
- 1. Electronic Data Interchange Muhammad Musa SyedHamza Hussain Ansar Ilyas
- 2. What is ElectronicData Interchange • Electronic Data Interchange (EDI), is the computer-to-computer exchange of standard business documents in electronic format between two companies •
- 3. EDI Characteristics • Happenselectronically • Little or no manual intervention • Very fast and accurate • Little or no clumsy paperwork
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- 6. Paper Vs EDI DocumentTransaction • Postal Service VAN • Courier Delivery Point to Point • Human Audit Machine Audit
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- 8. Basic steps forEDI • Prepare the document • Translate the document • Transmit the document to your partner
- 9. Prepare The Document •The first step is to collect and organize the data. • Instead of printing a purchase order . • Your system creates an electronic file with the necessary information to build an EDI document
- 10. Translate The Document •The next step is to feed your electronic data through translator software. • EDI Translator convert your internal data format into the EDI standard format using the appropriate segments and data elements.
- 11. Transmit the Documents •Business documents are translated to the appropriate EDI format they are ready to be transmitted to your business partner. • The most common way to send EDI files is to use a value added network. • The VAN takes the transmitted data from your computer system and stores it securely before the receiver's system tells it that it is ready to pick it up , bypassing the VAN's storage system.
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- 13. EDI Standards • EDIstandards help to ensure that electronic business documents can be exchanged between companies with ease • There are many different EDI standards in use locally and around the world
- 14. EDI Document Standards •ANSI ASC X12 • EANCOM • EDIFACT • HIPAA • ODETTE • Swift • VDA • VICS
- 15. EDI Transactions Major Transactionsin ANSI ASC X12 1. Purchase order (850) 2. Invoice (810) 3. Advance Ship Notice (856) 4. Functional Acknowledgement (997)
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- 17. Advantages • Reduces theflow of paper between organizations. • Improves productivity. • Reduce labor cost. • Improves accuracy of information and reduces errors .
- 18. Draw Backs Veryhigh initial costs. Barrier to entry. Standardizes programs and procedures. Complex to use.
- 19. Case Study FurnitureWhole Saler • Objective • To achieve greater supply chain efficiency Steps to Success • Implement a PC-based solution to exchange orders and invoices • Operate a customer-facing supply chain with continuous flow of information between the organization and its customers • Remove error-and time-consuming manual tasks for a process Results • Competitive advantage and improved cash flow • A more efficient supply chain means the organization can offer increased seasonal order periods, providing a clear competitive advantage • Improved cash flow because electronic invoicing has increased speed of payment from customers • Benefit of improved cash flow shared with manufacturers, thus improving loyalty and commitment
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