Electronic Data Interchange is a data integration model using a standard electronic format among business partners and separate corporates in a secured way. Supply chain management is one of the main functions those benefit from EDI solution. The presentation demonstrates the proposed solution by IBM and the application in the automobile industry as a sample. Finally, the presentation refers to the future possible integrations with emerged technologies to benefit from EDI.

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Electronic Data Interchange
Prepared by:
Ahmed Sobhi Elgazzar ITIL@,MBA,CWA. Ph.D. Researcher
Contact: ahmed.Elgazzar@mail.com

2. History
 EDI inspired by developments in military logistics
 WW-II, due to the complexity of 1948 Berlin airlift, there is a
necessity to develop effective concepts and methods to
exchange a logistics such as (equipment, goods….etc.)
 Methods effectiveness means ( No Errors, No
Misunderstanding, No data waste, No time loss and to be
secured)
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 The Berlin Blockade (24 June 1948 – 12 May 1949) was one of the first major international crises of the Cold War
 Soviet Union blocked the Western Allies' railway, road, and canal access to the sectors of Berlin under Western
control (Allies)
 Western Allies organized the Berlin Airlift
 June 1948 to 30 September 1949 to carry supplies to the people of West Berlin
 Allies’ air forces flew over 200,000 sorties in one year, providing to the West Berliners necessities such as fuel and
food, with the original plan being to lift 3,475 tons of supplies daily.
 Such logistics process required a very specific ways of communication
Berlin Blockade

4. What is Electronic Data Interchange 4
EDI - Electronic Data Interchange – is B2B IT solution
Electronic Data Interchange is a Computer to Computer exchange method for business in
a standard electronic format among business partners.
Data interchange can be implemented via WAN or LAN network.
Integrate between different business units at the same organizations, or completely
different organizations.
EDI use specific protocols of communication between nodes or systems.
EDI use data encryption and decryption technique.

5. How EDI works
 EDI replaces the business documents
exchange via postal mail, fax and even
emails be replaced with electronic
documents flow through specific integrated
applications (e.g. OMS , ERP) from an
organization to another with no wasting time,
lower cost and sustainable communication.
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Traditional business documents exchange
Electronic data integration`

6. How EDI works
 Since EDI documents are processed by computers rather than humans, a standard format must be used so
that the computer will be able to read and understand the documents.
 The standard format describes what each piece of information is and in what format (e.g., integer,
decimal, mmddyy).
 There are thousands of standard business transaction documents can be spent automatically with EDI
 for example: purchase orders (EDI 850), shipping statuses (EDI 214), invoices customs information, payment
confirmations (EDI 820), and inventory documents
 EDI standard format allows computers to process EDI documents. Standards describe each piece of data
and the format, such as the type of document, the parties involved, the date and the actions to take.
 The benefit of standards is to eliminate company-company variations so that each business partners’
computer system speaks a common language.
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7. Why EDI
 Market became more complex due to globalization .
 Corporates competitions advantages
 Challenge of Product Market Fit
 Wide distance between SC partners (manufacturers, raw material supplier, inventory,
transportation, distributors ,stores, and customers)
 Variance of ERP systems and processing solutions.
 Diversity of cultures, languages, experiences, perceptions,…etc.
 Decrease time lag.
 Decrease and control error limits.
 Control Quality.
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8. EDI Standards (Protocol): 8
- Allow computers to process EDI documents.
- Describe each piece of data and the format (e.g. type of document, the parties involved, quality, date and
actions)
- Standards eliminate company-company variations so that each business partners’ computer system speaks
a common language.
- Support the implementation of Information Security and Network Security to maintain the confidentiality of
contents.
- Business Partners have to agree on used Protocols before implementing EDI files and configurations.
- Business Partners must work with an intermediary to facilitate the exchange between the two protocols.
- EDI security protocols may require more technology than others but using EDI software such as ESSBUS
Connect to facilitate a wide variety of exchanges without a major investment
- Protocol ranges vary from the long-established file transfer protocol (FTP) or secure FTP (STFP) that is used to
upload content to a Host Server for a Website – WebService-, to API-based systems such as AS4, web-based
via A2, and other options, including mobile EDI.

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Standard ASC X12 EDIFACT
Abbreviation The Accredited Standards
Committee X12 is a standards
organization.
Electronic Data Interchange For
Administration, Commerce and
Transport.
Invented by USA UN
Region USA & North America Global
Purpose Business-to-business electronic data
interchange standards
Provides a clear set of syntax rules
used to structure the interactive
exchange protocol. It allows for a
multi-country and multi-industry
exchange of electronic business
documents and files securely
Data Format XML EDIFACT syntax
EDI Standards (Protocol):

10. ISO 9735-10:2014 10
Electronic data interchange for administration,
commerce and transport (EDIFACT)
Reference: https://www.iso.org/obp/ui/#iso:std:iso:9735:-10:ed-2:v1:en
•— Part 1: Syntax rules common to all parts
•— Part 2: Syntax rules specific to batch EDI
•— Part 3: Syntax rules specific to interactive EDI
•— Part 4: Syntax and service report message for batch EDI
•— Part 5: Security rules for batch EDI (authenticity, integrity and non-repudiation of origin)
•— Part 6: Secure authentication and acknowledgement message
•— Part 7: Security rules for batch EDI (confidentiality)
•— Part 8: Associated data in EDI
•— Part 9: Security key and certificate management message
•— Part 10: Syntax service directories

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WITH

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EDI Standard Templates

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https://www.ibm.com/support/knowledgecenter/en/SSRJDU/bti/reference/bti_EDI_850_Purcha
se_order.html

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17. EDI Benefits to SCM 17
Electronic integration
Information diffusion
and sharing
Electronic
Marketplaces
• Different systems/applications at the
same organization (functional unites
or Branches )
• Independent organizations but linked
at the same supply chain
• Accept the market challenges
• Achieve market advantages
• Reach the Product-Market fit
• Information flow acceleration.
• Decrease lag time across supply chain
• Reduce information search cost
(Prices, Quantities,..)
• Reduces the order fulfilment cycle
and order filling errors
• Lowering the inventory buffer level
(re-ordering limit) in the production
process
• Compress the time to bring a product to
the market.
• Shift from mass production to flexible &
specialized production due to increasing
outsourcing opportunities
• Reduce manufacturing cost.
• Empowers the creation of digital
marketplace.
• Enhance product quality by involving
suppliers in the product design and
development process.
• Increase interdependence across the
supply chain, enables sustainable long-
term relationships, and risk sharing.

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EDI B2B Manage Services
Integration Model

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Future Enhancements

21. Applied In 21
Reference: https://ps.nafta.extra.fcagroup.com/sites/itb-ebus/Pages/Production-(Direct)-Parts-Supplier---Summary-.aspx

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