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Electronic Data Interchange (EDI) is the computer-to-computer exchange of structured information, by agreed message standards, from one computer application to another by electronic means and with a minimum of human intervention.
Despite being relatively unheralded, in this era of technologies such as XML Services, the Internet and the World Wide Web, EDI is still the engine behind 95% of all electronic commerce transactions in the world.
The EDI standards were designed from the beginning to be independent of lower-level technologies and can be transmitted using Internet protocols as well as private networks. It is important to differentiate between the EDI documents and the methods for transmitting them. While comparing the bisynchronous 2400 bit/s modems and value-added network to the Internet some people predicted erroneously that EDI would be replaced. These older transmission methods are being replaced by Internet Protocols such as FTP, telnet and email, but the EDI documents themselves, as well as the EDI service providers or Value-added network, remain.
EDI documents contain the same data that would normally be found in a paper document used for the same organisational function. For example an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer. It typically has a ship to address, bill to address, a list of product numbers (usually a UPC code) and quantities. It may have other information if the parties agree to include it. However, EDI is not confined to just business data related to trade but encompasses all fields such as medicine (patient records, laboratory results..), transport (container and modal information...), engineering and construction etc etc
There are three major sets of EDI standards. UN/EDIFACT is the only international standard (infact, a United Nations recommendation) and is predominant in all areas out side of North America. ANSI ASC X12 and Uniform Communication Standard (UCS) are popular in North America and are very similar to each other.
These standards prescribe the formats, character sets, and data elements used in the exchange of documents/forms, such as purchase orders (called ORDERS in UN/EDIFACT and TS850 in X12) and invoices.
The standard says which pieces of information are mandatory for a particular document, which pieces are optional and give the rules for the structure of the document. The standards are like building codes. Just as two kitchens can be built "to code" but look completely different, two EDI documents can follow the same standard and contain different sets of information. For example a food company may indicate a particular product expiration date while a clothing manufacturer would choose to send color and size information.
Organizations that send or receive documents from each other are referred to as "trading partners" in EDI terminology. The trading partners agree on the specific information to be transmitted and how it should be used. This is done in human readable specifications (also called specs or spec sheets). While the standards are analogous to building codes the specifications are analogous to blue prints. (The specification may also be called a mapping but the term mapping is typically reserved for specific machine readable instuctions given to the translation software.) Larger companies have existing specification sheets and are usually unwilling to negotiate. Often in a large company these sheets will be written to be used by different branches or divisions and therefore will contain information not needed for a particular exchange. (Deviations from and clarification to the specification sheets should always be obtained in writing.)
Often missing from the specifications are real world descriptions of how the data should be interpreted. This is particularly important when specifying quantity. For example, suppose candy is packaged in a large box that contains 5 display boxes and each display box contains 24 boxes of candy packaged for the consumer. If an EDI 940 document says to ship 10 boxes of candy it may not be clear whether to ship 10 consumer packaged boxes, 240 consumer packaged boxes or 1200 consumer packaged boxes. It is not enough for two parties to agree to use a particular qualifiers indicating case, pack, box or each; they must also agree on what that particular qualifier means.
EDI Translation Software interfaces between the internal system and the global standards. For an "inbound" document it typically takes the variable length fields of the EDI document, translates the individual pieces of data and then creates a file of fixed lenth fields. For an "outbound" document the translation software queries the internal system, as in the case of an SQL database, or it translates a fixed width file exported by the internal software. Translation software may also utilize other methods or file formats. The mechanism of translation is not part of the standard.
Note: In EDI terminology "inbound" and "outbound" refer to the direction of transmission of an EDI document in relation to a particular system not the direction of merchandise, money or other things represented by the document. For example an EDI 940 document that tells a warehouse to perform an outbound shipment is an inbound document in relation to the warehouse computer system. It is an outbound document in relation to the manufacturer or dealer that transmitted the document.
- EDI Data structure - Transaction sets, segments, data elements, composite data elements, and sub-elements.
- EDI Translation software.
- The store and forward of data transmission.
- The difference between X12 and EDIFACT.
- New-edi - a method developed by the Standards Council of Australia.
- XML/EDI - OASIS, Rosettanet, etc.
- EDI vs edi - "EDI" being the global international standard and all it entails. "edi" being the non standard and proprietary implementations used by individual organisations.
- Tradacoms - an example of retail industry-specific EDII
- History of EDI.
- Politics of EDI.
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