Professional Documents
Culture Documents
between the computer systems of business partners, using a standard format over a communication network.
provides business process integration across companies by exchanging business documents such as purchase orders, invoices, and shipment notices in electronic form, using industry standard formats. Previously fax machines or traditional mail was used to exchange documents .Mailing and faxing are still used in business, but EDI is a much quicker way to do the same thing.
Cont.
EDI is a collection of standards, formats and file layout. Currently there are multiple EDI standards around the
world: X12 standard and its subsets (i.e. UCS,VICS) HIPAA USA only based standard for healthcare transactions. It is a subset of the ANSI X12 standard set with additional healthcare specific transactions. EDIFACT European Standards for electronic commerce. TRADACOMS UK based EDI standard currently in declining use.
COMPONENTS OF EDI
EDI Standards EDI Software's
EDI STANDARDS
One-to-one communication
Softwares.
Extract data from business applications to transfer it into a
EDI Software's
Consists of computer instructions that translate the
information from unstructured, computer specific format to the structured EDI format and then communicate the EDI massages.
Data formatting
Available for:- mainframe computers, mini computers,
micro computers
Networks
Documents stored in user mail boxes on the networks EDI
server
VAN: A VAN is a third party service that transmits and
stores data in the electronic mail-box until it is picked up by the appropriate party. Since the EDI message contains addressing information, the VAN routes message to the mail-box of the recipient.
Vendor
Order Management
Customer Purchasing
Order Acknowledgement
Manufacturing
Receiving
Shipment Status
Carrier
Bill of Lading
Shipping
Accounts Receivable
Account Information
Customer Bank
EFT
Supplier Bank
SETTING UP EDI
Whether you use a service based solution or in-house software, youll need to format the data to your trading partners specifications. The process of formatting is called mapping.
EDI guidelines are not universal. The map created for Company As invoice cannot be copied and used for Company Bs invoice as Company B has its own criteria. Youll need an implementation guide for every trading partner.
Cont.
Setting up communication: One of the most important
aspects of EDI is selecting how the data is going to get from one place to the other, such as through a VAN or using a direct connection.
Customer
Application Program
Application Program
Business document
Business document
Value - Added Network
Translator
EDI message
Translator
EDI message
Trade Partners : The trading partners can be any combination of organization or business types. Application program : APs are responsible for generating and processing data in business documents Business document : A business document is a legal document that defines the transaction conducted between trading partners. Translator : The translator is responsible for mapping application data to the EDI standard format. EDI Message : The standards EDIFACT /ANSIX12 defined various EDI messages that govern the rules , format, and content of data in a transaction.
Value-Added Network :The VAN provides a mailbox on the network to each trading partner. This mail box is polled periodically for messages. The application software does not have to be connected or running at the time of message exchange.
Reduced cycle time Better inventory management Increased productivity Reduced costs Improved accuracy Improved business relationships Enhanced customer service Increased sales Minimized paper use and storage Increased cash flow
EDIFACT calls business documents messages and represents them by a name such as ORDERS for a purchase order, whereas ANSIX12 calls them transactions and represents them by a number such as 850 for a purchase order. EDIFACT uses the same segment in multiple places, where as ANSI has a specific use for each segment. EDIFACT has additional segments that apply to international trade. Conditional fields in EDIFACT are the same as optional fields in ANSIX12.
the Uniform Code Council to obtain introductory material, including a membership application.
CONT..
Contact trading partners and determine what transaction sets they are using and what level. Determine how you will process EDI. You have two choices, depending on your budget, your technical
subsided a bit. They realized that being small gave them an advantage. Their line was limited to about 20 items, so changes such as computerizing inventory items wouldn't take much time. And since the company had been putting UPC bar codes on its products from the start, it had already met one EDI mandate. The biggest challenge was the electronic order processing. The partners had two options: process the orders in-house by purchasing a $10,000 software package and better hardware, or hire a third-party service firm. Outsourcing won. "If 100% of our business were with Federated stores, we might bring EDI in-house," Gardner says. "But for two purchase orders a month, it's much better to go with a service."
and her Bloomingdale's EDI contact. She also talked to other companies in the same shoes. "One hadn't even done anything yet, and that was a relief," she says. "I was panicking, thinking the whole world was on EDI, and that's not the case." Prices were comparable at the half dozen service companies Gardner called. She looked for the service that could make the process as painless as possible and explain it without jargon, and finally chose Intercoastal Data, in Carrollton, Ga. At a cost of about $40 an order -- about $1,000 a year for Belly Basics -Intercostal processes purchase orders sent directly from Federated and faxes them to Belly Basics the same day. Belly Basics forwards the orders to its Long Island warehouse, as it always has. When Intercoastal receives an invoice from Belly Basics, the company sends it and a shipping notice back to Federated in the required electronic format.
which had been extended by several months for all suppliers. Says Gardner, "The whole thing sounded a lot scarier than it is."
Thank you