The document provides an introduction to electronic data interchange (EDI), including definitions, history, benefits, transmission methods, and common standards. EDI allows structured business documents like purchase orders to be electronically transmitted between trading partners in a standardized format, streamlining processes. It originated in the 1960s and saw growing adoption through the 1980s as industry standards like ANSI X12 emerged. Key benefits of EDI include reduced costs, improved speed, accuracy and inventory management.

1. Internal
Sivasubramaniam Arunachalam
September 09, 2011
Internal
Introduction to EDI
(Electronic Data Interchange)

2. Internal
Agenda
 Definition
 History
 Message Flow
 Before EDI
 After EDI
 Benefits
 Transmission Mediums
 Transmission Directions
 Transmission Protocols
 Implementation
 Message Formats

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EDI - Definition
 Business Documents
 Electronic Transmission
 Strtucted Data
 Trading Partner to Trading Partner
 Computer to Computer Communication
 Sequence of Messages
 Automate Standard Processes

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History
 Early 1960s
 TDCC
 Private Company Standards
 Private Industry Standards
 Inter Industry Standards (ANSI / ASC)

5. Internal
History - Timeline
1968 - TDCC Formed
1975 - First EDI Standard
1978 - ANSI ASC Formed
1981 - Retail Grocery Industry
 Uniform Communication Standard Program (UCS)
1982 - Public Warehousing Industry
 Warehousing Industry Network Standards (WINS)
1983 - ANSI - First 5 American National Standards for EDI.
1988 - Auto Industry Action Group (AIAG)

6. Internal
History – Timeline (Contd…)
 1988 - UN formed UN-JEDI
 Limitations of ANSI Standards
UN/EDIFACT
 Adoption & Popularity
Immediate Benefits
 Overseas Expansion
 Expense Control
 Elimination of Support for Multiple Formats

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Before EDI
Source : https://www.cybertext.com/books/primerprev/chapters/ch2.htm

8. Internal
After EDI
Source : https://www.cybertext.com/books/primerprev/chapters/ch2.htm

9. Internal
After EDI
Source : http://acs.lbl.gov/~johnston/EDM/Internet.and.RINS.3.fm8.html

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Benefits
 Post office cost
 People cost
 Error cost
Buyer Benefits
 Lower Inventory Levels
 Quick Order Acknowledgement
 Matching and Re-Keying PO and Invoice
Supplier/Seller Benefits
 No problems and delays caused by order entry errors (50)
 Personnel Reductions (70)
 Inventory Reductions
 Improved Cash Flow

11. Internal
Benefits - Need for Speed
 Seconds instead of Days
 Never put it any Basket for Collection
 Receiver side data is immediately ready for processing
 Different parties process the electronic document
 Low Business Cycle times (competitive edge in any business)

12. Internal
Benefits - Need for Accuracy
 Electronic data is usually derived from a database
 Data has been subject to prior validation
 Large Size and delivery failure never matters here.
 Even it fails, re-transmission is possible

13. Internal
Benefits - Cost Savings and Avoidance
 Human handling
 Mailroom Sorting, Circulation, Clerical document preparation
 Data entry at multiple stages
 Paper and it's Transmission Costs
 Paper Cost, Envelopes , Mailing Materials , Courier services
 Telephone calls to confirm
 Paper storage space and it's protection
 Low Error Rates and Low Handling of Error Rates
 Labor to monitor, search and solve the error
 Inventory Reduction
 Low Stock Levels

14. Internal
Benefits - Improved Operational Efficiency
 For Customers
 Quicker Delivery of Products (competition)
 Better Customer service
 Distributors performance
 Vendor side
 Track Supplier Performance Level
 Track Supplier Stock Level
 Transportation Carrier Performance

15. Internal
Benefits - Improved Operational Efficiency (Contd…)
 Precise Planning and Execution
 Improved Cash Flow
 Immediate payment
 No Currency Conversion Factors
 Net Discounts
 Audit trials and status tracking

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Transmission Medium - Types
 P2P
 Dial up Line
 Leased Line
VAN
VPN
Web / Mobile

17. Internal
P2P – Dial Up
 Dial-up line is established just like a normal telephone call
 Sending party makes the call to Receiver & transmits the data
 Batch/Bulk Processing
 Cheaper when the amount of data is low and sporadic

18. Internal
P2P - Leased Line
 Dedicated Line and expensive
 Amount of transactions is high
 Fairly constant throughout the day
 No dial delay
 No need to batch transactions

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VAN (Value Added Network)
 P2P scheduling problem to trading partners
 Store and Forward Mailbox Service
 Most widely used
 Routing, Storing and Delivering EDI messages
 Delivery Reports

20. Internal
VAN – How it works
 Trading Partners chooses EDI VAN Provider
 EDI VAN Provider provides mail box for send & receive
 Sender Connects to VAN and sends its EDI
 Sender then disconnects from the service
 Recipient can connect to the network and receive those
transactions from their mailbox

21. Internal
VAN – Other Features
 Acknowledgements
 To Sender (Messages have been sent successfully)
 To Receiver (New EDI message has arrived in their mailbox)
 Data Backup/Recovery,
 Document Mapping
 Audit trail of all EDI transactions
 Tracking / Recording the trail of a message (on demand)

22. Internal
VPN
 Public Telecommunications Networks (internet)
 Private Data Communications
 Intranet and extranet(VPN Server to another VPN Server)
 Client/Server model
 Clients -> authenticate, encryption, creating tunnels and managing sessions
 Lower Costs compared to Leased Lines

23. Internal
Web / Mobile
 Web
 Users will use Web Browsers
 Pre-populated Form
 Security depends on the internet technologies (HTTPS and AS2)
Mobile
 Recent development concentrates on mobiles
 At Least to check the status of the transaction
 Many Challenges (different screen size & different platforms)

24. Internal
Protocols
 HTTP / HTTPS
 POP3 / SMTP
 SFTP
 OFTP / OFTP2
 WebDAV (Web folders or web share)
 X.400
 EDIINT
AS1
AS2
AS3
AS4

25. Internal
Protocols – OFTP2
(ODETTE File Transfer Protocol)
• Message encryption and signatures support
• Signed receipts
• Message compression and integrity
• Session authentication
• Session encryption (TLS)
• File restart
• Push / pull operation
• Peer-to-peer or indirect communications
• File compression
•Operates over TCP/IP, X.25/ISDN, native X.25

26. Internal
OFTP2 vs AS2
• OFTP2 – Push & Pull
• AS 2 - Push

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Transmission Directions
 Inbound
 Outbound
 EDI that tells a warehouse to perform an shipment
 Outbound for Manufacturer
 Inbound for Warehouse computer system

28. Internal
Transmission Directions – Inbound Processing
P2P, VAN or AS* to EDI Application (Mail Bag)
 Validation of Party
 Authentication
 Authorization
 Valid message
 Structure of the file vs EDI standards
 Individual fields vs standads (ex. PO)
 Create non EDI doc for back end ERP or database or queue
 Conversion / Tranformation to properitry format (Ex: IDoc)
 Can be done by Standard mappings (XSLT or Custom Mapping modules)

29. Internal
Transmission Directions – Outbound Processing
 Read data from DB (or) From back-end ERP (or) Queue
 Validate message format & individual fields in the given file
 Use Mapper and create EDI Message
 Validate EDI Message
 Send to Trading Partner
 Audit Creation and Interpretation (Depends on the EDI type)
 Technical Acks
 Business Acks

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Transmission Directions - Inbound & Outbound
Source: http://www.vsiapparel.com/edi_inbound.htm

31. Internal
Transmission Directions - Inbound & Outbound
Source: http://www.sysmaker.com/infopro/edi.htm

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Example Transactions
 Purchase Orders
 Invoices
 Shipping Notices
 Export/Import Information
 Carrier-to carrier waybills
 Funds Transfers
 Design Specifications
 Health Insurance Claims

33. Internal
Stats…
 2008 Aberdeen report (POs)
 34% - North America.
 36% - EMEA
 41% - APAC
 Average paper requisition to order costs a company
 $37.45 - North America
 $42.90 - EMEA
 $23.90 - APAC
 EDI requisition to order costs are reduced to
 $23.83 -> North America
 $34.05 -> EMEA
 $14.78 -> APAC

34. Internal
EDI - Implementation
 Step 1 - Organize
 Step 2 - Review
 Step 3 - Develop
 Step 4 - Integrate
 Step 5 - Map
 Step 6 - Pilot
 Step 7 - Deploy

35. Internal
EDI – Message Formats
 ANSI ASC X12
 cXML
 ebXML
 UBL
Tradacoms
 EDIFACT
 RosettaNet
 CIDX
 PIDX

36. Internal
CEFIC – Chemical
 EANCOM – Retail
 EDIBDB – Construction
 EDIFICE – High Tech Industry
 EDIFURN – Furniture
 EDIGAS – Gas
 EDILEKTRO - Electro
 EDILIBE – Books
 EDITEC - Sanitary
 EDITEX – Fashion
EDI – Message Formats (Contd…)

37. Internal
EDI – Message Formats (Contd…)
 EDIFOR/EDITRANS - Transports & Logistics
 EDIWHEEL - Wheels & Tyres
 ETIS – Telecommunication
 STAR - Standards for Technology in Automotive Retail
 SPEC2000 - Airline Industry
 FORTRAS - Transports & Logistics

38. Internal
EDI – Sample Business Flow
Source: http://sap-idoc2edi-consulting.com/images/Blog24/GIS%20XI%20SAP%20Overview.jpg

39. Internal
SAP NW PI – B2B Flow

40. Internal
EDI – Challenges
 Customers
 Committees
 Solution Providers & Partners

41. Internal
References
http://en.wikipedia.org/wiki/Electronic_data_interchange
http://www.edibasics.co.uk/
http://e.d.i.tripod.com/edi_history.htm
http://www.123edi.com/
http://www.electronic-cash-news.com/2010/concise-timeline-
and-history-of-electronic-data-interchange-edi/
http://rogerclarke.com/EC/EDIIntro.html

42. Internal
References
http://www.edimatrix.demon.co.uk/history.htm
http://archive.ifla.org/VI/5/reports/rep4/rep4.htm
http://www.covalentworks.com/what-is-edi.asp
http://en.wikipedia.org/wiki/OFTP
https://www.cybertext.com/books/primerprev/chapters/ch2.htm

43. Internal