Edi Introductiontoedielectronicdatainterchange 161214163033

Introduction to EDI (Electronic Data Interchange)

Sivasubramaniam Arunachalam September 09, 2011

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Definition History Message Flow Before EDI After EDI Benefits Transmission Mediums Transmission Directions Transmission Protocols Implementation Message Formats

Agenda

EDI - Definition  Business Documents

 Electronic Transmission  Strtucted Data  Trading Partner to Trading Partner

 Computer to Computer Communication  Sequence of Messages

 Automate Standard Processes

History  Early 1960s

 TDCC  Private Company Standards  Private Industry Standards  Inter Industry Standards (ANSI / ASC)

History - Timeline 1968 - 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)

History – Timeline  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

(Contd…)

Before EDI

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

After EDI

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

After EDI

Source : http://acs.lbl.gov/~johnston/EDM/Internet.and.RINS.3.fm8.html

 Post office cost

Benefits

 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

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)

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

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

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

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

Transmission Medium - Types  P2P  Dial up Line  Leased Line

VAN VPN

Web / Mobile

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

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

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

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

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)

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

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)

Protocols  HTTP / HTTPS  POP3 / SMTP  SFTP  OFTP / OFTP2  WebDAV (Web folders or web share)  X.400  EDIINT AS1 AS2 AS3

AS4

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

OFTP2 vs AS2 • OFTP2 – Push & Pull • AS 2 - Push

Transmission Directions  Inbound  Outbound  EDI that tells a warehouse to perform an shipment  Outbound for Manufacturer

 Inbound for Warehouse computer system

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)

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

Transmission Directions - Inbound & Outbound

Source: http://www.vsiapparel.com/edi_inbound.htm

Transmission Directions - Inbound & Outbound

Source: http://www.sysmaker.com/infopro/edi.htm

Example Transactions 

Purchase Orders



Invoices



Shipping Notices

 

Export/Import Information Carrier-to carrier waybills



Funds Transfers

 

Design Specifications Health Insurance Claims

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

EDI - Implementation  Step 1 - Organize  Step 2 - Review  Step 3 - Develop  Step 4 - Integrate  Step 5 - Map  Step 6 - Pilot  Step 7 - Deploy

EDI – Message Formats  ANSI ASC X12  cXML  ebXML  UBL Tradacoms  EDIFACT  RosettaNet  CIDX  PIDX

EDI – Message Formats CEFIC – Chemical  EANCOM – Retail  EDIBDB – Construction  EDIFICE – High Tech Industry  EDIFURN – Furniture  EDIGAS – Gas  EDILEKTRO - Electro  EDILIBE – Books  EDITEC - Sanitary  EDITEX – Fashion

(Contd…)

EDI – Message Formats  EDIFOR/EDITRANS - Transports & Logistics  EDIWHEEL - Wheels & Tyres  ETIS – Telecommunication  STAR - Standards for Technology in Automotive Retail  SPEC2000 - Airline Industry  FORTRAS - Transports & Logistics

(Contd…)

EDI – Sample Business Flow

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

SAP NW PI – B2B Flow

EDI – Challenges  Customers  Committees  Solution Providers & Partners

References http://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-timelineand-history-of-electronic-data-interchange-edi/ http://rogerclarke.com/EC/EDIIntro.html

References http://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