The document provides an overview of electronic data interchange (EDI). It describes EDI as the computer-to-computer exchange of business data between companies using standardized formats. The document outlines the history of EDI beginning in the 1960s and the development of national EDI standards in the 1970s. It also discusses EDI standards like ANSI X12 and EDIFACT, the use of value-added networks, and advantages of EDI like lower costs and fewer errors.

2. Introduction to EDI… What is EDI?
 Electronic Data Interchange is the computer-to-
computer exchange of business data and
documents between companies using standard
formats recognized both nationally and
internationally.
 The information used in EDI is organized
according to a specified format set by both
companies participating in the data exchange.
http://www.x12.org/x12org/about/faqs.cfm#a1

3. History of EDI
 The general idea behind EDI was originated by
a group of railroad companies in the mid-
1960’s, in the United States.
 Much of the early work on EDI was driven by
the industry sectors for:
 transportation
 pharmaceuticals
 groceries
 automobiles
 banking
www.edi-guide.com/edi-history.htm

4. History of EDI It was not until the 1970’s, when work began
for national EDI standards.
 Both client and vendors input their
requirements to create a set of standard data
formats that
 were hardware independent;
 were unambiguous and could be used by all trading
partners;
 reduced labor-intensive tasks such as data-entry;
 allowed the sender of data to control the exchange
including receipt confirmation of by the other party
www.gotedi.com/term_history.htm

5. Advantages of EDI
 Lower operating costs
 Saves time and money
 Less Errors = More Accuracy
 No data entry, so less human error
 Increased Productivity
 More efficient personnel and faster throughput
 Faster trading cycle
 Streamlined processes for improved trading
relationships
http://www.edi-guide.com/edi-benefits.htm

6. Disadvantages
 High Dependence on the participation of trading
partners
 Costly for smaller companies
 Difficult to agree on standard to be used
http://www.edi-guide.com/risks-of-edi.htm

7. Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D

8. Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Original Model

9. Value-Added Network (VAN)
communications networks supplied
and managed by third-party
companies that facilitate electronic
data interchange, Web services and
transaction delivery by providing
extra networking services

10. Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Value-added
Network
VAN Model

11. Web Services
 Applications that use a universal language to send
data and instructions to one another, with no
translation required
 Uses the Internet, so most of the connection
problems are eliminated
http://www.computerworld.com/softwaretopics/software/appdev/story/0,10801,64099,00.html

12. Options
 EMAIL
 XML
 DIRECT ROUTING

13. Retailer A
Retailer C
Retailer B
Retailer D
Wholesaler A
Wholesaler B
Wholesaler C
Wholesaler D
Direct Routing

14. Who Needs EDI or a VAN?
Companies still need…
 Assistance with formatting problems
 Authentication of customers
EDI Standards…

15. ANSI X12 Standard Accredited Standards Committee (ASC) X12 was
created in 1979 by the American National Standards
Institute.
 It is a not-for-profit membership.
 Members meet three times each year to develop,
maintain and build on the EDI standards.
 Its purpose:
 To standardize the EDI formatting and exchanges
between companies in order to make the transfers
less time consuming, due to differences in
formatting and information presentation.
http://www.x12.org

16. Example of ASC X12
Note: Linefeeds and "(Continued)" notes inserted for clarity
ISA*00* *00* *01*123454321 *01(Continued) *012341234
*031016*2359*U*00401*987600111*0*P*:
GS*RA*123454321*012341234*031016*2359*987600111*X*004010
ST*820*987600111
BPR*C*77.77*C*ACH*CTX*01*234056789*DA*0099109999*(Contin
ued) *123454321*01*045678099*DA*1008973899*031016
TRN*1*0310162359 REF*AA*EDI6 N1*PR*WHIZCO OF AMERICA
INC N3*55 MEGAPLEASANT ROAD*SUITE 999
N4*SUPERVILLE*NY*10954 N1*PE*YOWZACO ENT*1
RMR*AP*1111111111111111*PO*11.11
RMR*AP*2222222222222222*PO*22.22
RMR*AP*4444444444444444*PO*44.44 DTM*055*031016
SE*000000014*987600111 GE*1*987600111 IEA*1*987600111
http://www.x12.org

17. ASC X12 Standard
 These standards have been updated 5 times
since their creation in 1979,
 They are updated to include new facets in the
business world, or update any information that has
become obsolete.
 As the standards evolved, subcommittees
were added to ASC X12.
 In 1986 X12F was added for the Financial Industry
 In 1989 X12M was added for the Warehousing sets
 In 1991 X12N was formed for the B2B Insurance and
Healthcare needs.
http://www.x12.org

18. ASC X12
 ASC X12 is looking to integrate with XML.
 1999 the first summit was held to draft policies and
procedures to create XML in ASC
 2002 the second summit was held to further
develop ASC/XML bonds.
(www.disa.org)
 Currently there are more than 300 X12
transaction sets in XML format for B2B
transactions.
 They are used in the insurance, franchises,
automotive, finance, communication, and
merchandising industries.
http://cleo.com/university/tech-terms/EDI_X12.asp

19. UCS History and Background
 UCS = Uniform Commercial Standard
 Subset of ANSI ASC X12
 Foundation for creation from the
Transportation industry
 Grocery and Retail-oriented Industry – 1976
 Sponsorship and Funding
 Manufacturers
 Retailers
 Wholesalers
 Brokers
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

20. UCS Development (3 phases)
 1st – Feasibility Study (Spring 1980)
 2nd – Development of message and
communication standards (August 1980)
 3rd – Validity test of message and communication
standards
 By late 1982, UCS standards released for general
use by industry members
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

21. UCS Implementation
Guidelines
 Data Administration
 Ordering
 Logistics
 Financial
 Business Support
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

22. UCS Communication Standard
 Design
 Objective
 Provide for the communication of EDI data
 Identify alternative communication methods
 Specify the communication standard for industry
use
 Provide operational guidelines for using the
standard
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

23. UCS Internet Standards
 Design
 E-commerce Transport Communication
Guidelines
http://www.uc-council.org/ean_ucc_system/stnds_and_tech/ucs.html

24. UCS Example (Kroger, Co.)
 Kroger Co. uses EDI for:
 Invoice processing
 Remittance advice
 Purchase order processing
 Vendor replenishment and managed inventory
 Advanced ship notice
 Product transfer and resale report
 Documenting price changes
 Promotional announcement processing
 Item maintenance
http://edi.kroger.com/edi/homepage_edi.htm

25. Item Maintenance (Kroger, Co.)
 UCS 888 transaction
 Receive detail finished good product information
for new products or changes in the existing product
specifications from suppliers
 Benefits
 Increased accuracy
 Improved timeliness
 Reduced operating expenses
http://edi.kroger.com/edi/homepage_edi.htm

26. EDIFACT
 Electronic Data Interchange for Administration,
Commerce, and Transport is the international set
of EDI standards
 Became a UN standard in 1987
 Maintenance and further development is the
responsibility of the United Nations Centre for
Trade Facilitation and Electronic Business
(UN/CEFACT)
http://www.x12.org/x12org/about/faqs.cfm#c8

27. EDIFACT
 Includes syntax rules and implementation
guidelines, message design guidelines, data
elements, code sets, and other definitions
 Used for business-to-business (B2B)
communication rather than business-to-
consumer (B2C)
 Allows multi-country and multi-industry
exchange
 Europe adopted EDIFACT early and has a large
installed base indicating its continued use
Statistical Journal of the UN Economic Commission for Europe, 2002

28. Example of EDIFACT
UNB+IATB:1+1APPC+LHPPC+940101:0950+1’
UNH+1+PAORES:93:1:IA’ MSG+1:45’
IFT+3+?*XYZCOMPANY AVAILABILITY?*’
ERC+A7V:1:AMD’ IFT+3+NO MORE FLIGHTS’ ODI’
TVL+240493:1000::1220+FRA+JFK+DL+400+C’
PDI++C:3+Y::3+F::1’ APD+74C:0:::6++++++1A’
TVL+240493:1740::2030+JFK+MIA+DL+081+C' PDI++C:4’
APD+EM2:0:1630::6+++++++DA’ UNT+13+1’ UNZ+1+1’
http://en.wikipedia.org/wiki/UN/EDIFACT

29. Things you may want to remember . . .
(for the test)
 EDI – Electronic Data Interchange
 VAN – Value-Added Network
 ASC X12 is moving towards integration with XML
formatting
 EDIFACT – international set of EDI standards
 In the near future EDI will be vital for business
domestically and abroad

30. Sources of Information
 http://www.x12.org
 http://www.edi-guide.com
 http://www.gotedi.com/
 http://www.phharval.com/edi/whatisedi/edibasics.html
 http://www.computerworld.com
 http://aspalliance.com/487
 http://cleo.com/university/tech-terms/EDI_X12.asp
 http://www.uc-council.org/ean_ucc_system/
stnds_and_tech/ucs.html
 http://edi.kroger.com/edi/homepage_edi.htm
 Statistical Journal of the UN Economic Commission for Europe, 2002
 Professor Byron Marshall, Ph.D.