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Sivasubramaniam Arunachalam

September 09, 2011

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Introduction to EDI(Electronic Data Interchange)

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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)

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History - Timeline1968 - 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)

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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

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After EDI

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

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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

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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)

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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

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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

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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

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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

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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

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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

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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

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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)

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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

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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)

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Protocols HTTP / HTTPS

POP3 / SMTP

SFTP

OFTP / OFTP2

WebDAV (Web folders or web share)

X.400

EDIINT

AS1

AS2

AS3

AS4

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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

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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

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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)

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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

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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

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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

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EDI - Implementation Step 1 - Organize

Step 2 - Review

Step 3 - Develop

Step 4 - Integrate

Step 5 - Map

Step 6 - Pilot

Step 7 - Deploy

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EDI – Message Formats ANSI ASC X12

cXML

ebXML

UBL

Tradacoms

EDIFACT

RosettaNet

CIDX

PIDX

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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…)

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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

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EDI – Sample Business Flow

Source: http://sap-idoc2edi-consulting.com/images/Blog24/GIS%20XI%20SAP%20Overview.jpg

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SAP NW PI – B2B Flow

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EDI – Challenges Customers

Committees

Solution Providers & Partners

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Referenceshttp://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

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Referenceshttp://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

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