- What is EDI?
EDI is an acronym for Electronic
Data Interchange. It is a paperless trade exchange
that allows common business forms such as purchase
orders and invoices (transaction sets) to be
transferred using electronic file standards. It
replaces mailing and faxing with computer to computer
communications through VANs or Value Added Networks. A
combination of these two events briefly describes what
EDI is about.
- Why do EDI?
Most often the case a company is
forced to do EDI, in order to continue to do business
with a large supplier. Moving a company to EDI
requires knowledge and understanding of the EDI
business methods and technology. Once successfully up
and running, it provides effective document handling
with minimal human intervention. Addition of more
trading partners to the system only costs in setup
time, not in day to day operations. This is where EDI
savings are realized, through fast response, error
free and efficient handling of accounting
- EDI Standards:
There are many standards of EDI
defined. Two of the most popular are ANSI-X12,
is a standard developed by the
American National Standards Institute (ANSI) to
define EDI business documents. It is a wide spread
standard supporting wholesale and retail
distribution type businesses. Each of these
standards may have several hundred transaction sets
(such as invoices, advance ship notices and purchase
orders) to support many different industries. Each
company that chooses to do EDI decides on how they
wish to implement the particular transaction set by
creating what is known as an implementation guide
for each transaction set.
is a European standard and is also being considered
by the Canadian government.
- VAN (Value Added Network)
A VAN is an independant company who
provides a forward/storage system (mailbox), for EDI
transmissions between trading partners. To visit the
sites of some popular VAN's select
- Translation Software
Software that translates the EDI
document from an EDI standard to a flat ascii file so
that it can be read or used by application software
easily. For translators that have been tested with
EDI-PAC select here.
comes to EDI, think...