Implementing an Electronic Data Interchange (EDI) System ...
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Transcript of 1 electronic data interchange (edi)
Electronic Data Interchange (EDI)
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EDI and XML XML is a data description language
It has its roots in EDI
EDI technology is still in use, but is being replaced with XML
Electronic Data Interchange (EDI)
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What is EDI? Electronic Data Interchange (EDI)
Related to the history of XML Document exchange standard
e.g. Purchase Order (PO), Sales Order (SO) Documents are inter-related
But their formats differ! Aims at:
Making formats uniform Document exchanges easier
Electronic Data Interchange (EDI)
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EDI Example Company A wants to buy spare
parts from company B Company A prepares a Purchase
Order (PO) Sends it to company B Company B sends the goods, and a
Sales Order (SO) to B Formats of the SO and the PO differ
Electronic Data Interchange (EDI)
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EDI’s Role Take care of all such mismatches
Make document exchange easier
Make it electronic Hence the name Electronic Data
Interchange (EDI)
Electronic Data Interchange (EDI)
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EDI Definition
Exchange of business documents such as Purchase Orders (PO), Invoices, etc in an electronic format
Electronic Data Interchange (EDI)
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EDI Characteristics Happens electronically (like emails)
Little or no manual intervention
Very fast and accurate
Little or no clumsy paperwork
Electronic Data Interchange (EDI)
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EDI Usage Started in the 1960s
Used mainly by very large organizations Doing business with suppliers/customers
Slowly getting replaced by transactions over the Internet
Electronic Data Interchange (EDI)
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EDI History Has roots in another innovation
1964, Sales Manager at American Hospital Supply Company (AHSC) Developed a system for its customers
(i.e. hospitals) Use of punched cards for placing
orders
Electronic Data Interchange (EDI)
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Value Added Network (VAN) Private Networks
Communications layer over the basic network infrastructure
Similar to how all parties communicating using emails would need SMTP
Electronic Data Interchange (EDI)
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VAN Provider Similar to an Internet Service
Provider (ISP) Provides VAN Maintains mailboxes for all the EDI
users Stores and forwards messages
between EDI users
Electronic Data Interchange (EDI)
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EDI Architecture Diagram
Business Software at
Sender’s endStandard
EDI format
Translate Value Added Network (VAN)
Store and forward
Standard EDI format Store and
forward
Business Software at Receiver’s
endTranslate
Electronic Data Interchange (EDI)
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VAN Approaches Third-party
Preferred method More costly
In-house Complicated May be cheaper
Electronic Data Interchange (EDI)
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EDI Types No EDI
Partially Integrated EDI
Fully Integrated EDI
Electronic Data Interchange (EDI)
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Sample EDI DocumentInterchange Control Header – Electronic Envelope
Functional Group Header – Purchase OrderTransaction Set Header – Purchase Order A100
Data Segment Header – SourceData Element – Terms of TransactionData Element – Date and Time
Data Segment Header – DetailsData Element – Item NumberData Element – Item DescriptionData Element – Item QuantityData Element – Item Price
Transaction Set Footer – Purchase Order A100Functional Group Footer – Purchase Order……
Interchange Control Header – Electronic Envelope
Electronic Data Interchange (EDI)
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EDI Data Formats Decided by ANSI
ANSI ASC X12 in North America EDIFACT in Europe
Efforts are on to merge the two
Electronic Data Interchange (EDI)
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EDI Advantages Reduced lead-time Reduction in number of errors Reduction in processing costs overall Availability of information at all times Planning becomes easier Long-term relationships between
trading partners
Electronic Data Interchange (EDI)
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EDI Drawbacks Very high initial costs Barrier to entry Not using EDI is also a problem Technologically non-savvy
companies cannot use EDI with ease
Electronic Data Interchange (EDI)
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Emerging Trends Use of EDI over the Internet
Allows smaller players to use EDI
Substantial reduction in costs
Use of XML
Electronic Data Interchange (EDI)
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EDI and the Internet
Web browser
XML
EDI VAN Provider
ASC X12
Thank you!
Any Questions?