1. Why are we here today ???
1

2. W
O
W !
> 90,000,000,000,000
Greater than 90 TRILLION sheets of paper are
produced by American business annually
2

3. EC Strategy
Move From
Paper Intensive
Non - Integrated
Automated
Integrated
Create Data Once - Use It Many Times!
3

4. The World of
Electronic Commerce
EC
EC
JIT
Tech
Data
Barcoding
EI
EBB
EDI
VMI
InterNet
CE
E-mail
FAX
4

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. ELECTRONIC DATA
INTERCHANGE
• Definitions
• Background
• Benefits
Module 1
6

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. VALUE ADDED NETWORK (VAN)
Buyer Post Office
Selle
r
8

9. TRADING PARTNER
EDI
Trading partners are companies that do business
via EDI .
9

10. TRANSACTION SET
PO
EDI
Purchase
Order (PO)
Purchaser
A transaction set refers to a type of electronic document.
10

11. PAPER DOCUMENT INTERCHANGE
Data Entry
PO
Computer
Computer
Post Office
Purchaser
Invoice
11

12. ELECTRONIC DATA INTERCHANGE
Data Entry
PO
Computer
Computer
VAN
Purchaser
Invoice
12

13. Implementation
EC is Cross Functional
Account Executives
Accounting
Shipping
EDI has an impact on all departments
Order Processing
Infomation
Systems
13

14. Implementation
Considerations for System Design
• Determine Requirements
• Determine Readiness
• Select Participants
EDI
System
14

15. Implementation
Support areas
Liaison Areas
Accounting
Marketing
Order Processing
Sales
Transportation
Technical Areas
Electronic Commerce
Information Systems
15

16. ??
??
??
?
Questions
??
??
??
16

17. ELECTRONIC DATA
INTERCHANGE
Components
Module 2
17

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. EDI Components
Hardware
Standards
EDI
Software
Communications
19

20. Transaction Set
PO
EDI
PO
Purchaser
Transaction set refers to a type of electronic document
20

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. Components
ELECTRONIC
DATA
INTERCHANGE
STANDARDS
ANSI
X12
UN/EDIFAC
T
22

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. TYPES OF BUSINESS
TRANSACTIONS VIA EDI
Other
15%
Invoices
24%
Shipping Note
14%
Credit/Debi
3%
t
Purchase
Orders
44%
24

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. 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. EDI Components
Hardware
Standards
EDI
Software
Communications
27

28. EDI Software
1. Document Support
Database
4. Translation
Communications
2. Mapping
X12
3. Standards Support
28

29. EDI Components
Hardware
Standards
EDI
Software
Communications
29

30. Hardware
30

31. EDI Components
Hardware
Standards
EDI
Software
Communications
31

32. Value Added Network (VAN)
U.S. Post Office
Buyer
Seller
32

33. Point-to-Point:
EDI Without a VAN
Buyer
Supplier
1
A
2
B
3
C
4
D
33

34. Value Added Network (VAN):
Buyer
Supplier
1
A
2
B
3
C
4
D
34

35. Interconnect Strategy
GE VAN
AT&T
VAN
35

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. 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. 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. 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. Government
Health
care
Retail
Grocery
Policy
EDI
USERS
Advertisin
g
Construction
Banks
Transportation
Insuranc
e
Manufacturing
Chemical
Electronics
Petroleum
Automotive
40

41. ??
??
??
?
Questions
??
??
??
41

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. EDI BENEFITS
Increased Business
Opportunities
Reduced Inventory
More Accurate Records and Decision-making
Information
Lower Data Entry Costs
43

44. EDI
BENEFITS
Decreased Mailing Costs
Reduction In Order
Time
Greater Customer
Satisfaction
Better Cash Management 44

45. Bar-Code
45

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. ??
??
??
?
Questions
??
??
??
47

48. ELECTRONIC DATA
INTERCHANGE
EDI
Translation
Module 3
48

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. ANSI ASC X12 Standard
Purchase Order
Purchase Order
Facilitates electronic interchange of business documents
50

51. Transaction Set Composition
File = Transaction Set
Record = Data Segment
Field = Data Elements
51

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. Envelopes
Address Information
Information Receipt
Information Routing
Date and Time
Stamp
Audit and Version
Control
53

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. Trading Partner
Enveloping Issues
• Envelope Identiffers
• Addressing codes
• Types of control numbers
• Control number sequence
• Version of standards
55

56. Envelope Structure
ISA
Interchange
Interchange
IEA
56

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. 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. 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. 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. 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. 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. 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. Paper Vs. EDI Document
Data
Segment
Delimiter
Code = Qualifier
N1*VN*ABC Supplies^
Separator = Element Delimiter
64

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. 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. ??
??
??
?
Questions
??
??
??
67

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. 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. 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. 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. 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. 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. 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. ??
??
??
?
Questions
??
??
??
75