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EDI Standard

EDI standards were created to facilitate Electronic Data Interchange (EDI), which is a technical manifestation of a business communication between two or more enterprises.

EDI standard were created to be independent of transmission and software technologies. As a consequence of EDI standards, EDI documents can be sent via a variety of methods that have been affirmed by the trading partners. Examples of transmission methods include modems, FTP (secure and unsecure), email, HTTP, AS1 and AS2. A distinction must be made between EDI standards for EDI communication and EDI standard documents.

Because of increased use of the Internet as a communications medium, EDI standards for communication have been developed. The IETF released the RFC 3335 in 2002, and this is an EDI standard for secure transmission of EDI via email. The same organization confirmed RFC4130 for MIME-based HTTP EDIINT (what most people know as the AS2 EDI standard) transfers. In addition, the same working group from IETF is developing EDI standards for FTP transfers (known as AS3).

EDI standard messages are comprised of the same data that is contained in a paper document used for the same business function. For instance, manufacturers utilize the EDI 940 ship-from-warehouse order to inform a warehouse to transport a shipment of a particular product to a retailer. The information in this EDI standard document contains a “ship to” address, “bill to” address, a list of product numbers (usually a UPC code) and quantities. In addition to this basic data, there is often additional information depending on the needs and agreements of the sender and receiver. EDI standards are almost all encompassing since there are EDI standards for a variety of areas such as health care (for example patient records and laboratory results), transportation (for example, container and modal data), mortgage finance and construction. In some cases, EDI standards are created for trade data flow that wasn’t part of the pre-EDI standard flow of paper documents. The ASN message (Advance Shipment Notification – the EDI X12 standard message 856) was created to let the recipient of a shipment know which goods will be received and how they are packaged.

Globally, there are several EDI standards:

- EDIFACT which was developed by the United Nations to facilitate international trade. This is the most prevalent EDI standard outside of the US.

- X12 which is an EDI standard created in 1979 by the American National Standards Institute Accredited Standards Committee X12.

- TRADACOMS is prevalent in the United Kingdom, especially in the retail value chain. This EDI standard was created by the Article Numbering Association.

- ODETTE EDI standard was developed by German automotive companies and spread to other automotive manufacturers in Europe.

Most EDI standards began being used in various industries in the 1980s. EDI standards determine the formats, character sets, and data elements that companies should utilize in electronic business to business document communication.

As a business owner, you may think that it is necessary for you to learn how the EDI Standard works to truly understand how to work with your trading partners.  Far from it; working with an EDI Standard is something that you have to do to become compliant, but understanding the EDI Standard is something that is best left to companies like EMANIO.  The process of developing software that uses an EDI Standard and translates documents sent with that EDI Standard into “human readable form” is what companies like EMANIO specialize in.  For a business owner, having to learn an EDI Standard may be far too complex and laborious to be worth the effort.

Becoming compliant with an EDI Standard does not have be difficult.  The key is to ensure that you purchase the type of EDI Standard software that supports the EDI Standard that you need.  Which EDI Standard is going to be critical for you? The EDI Standard you will need to support depends on where you are in the world and with whom you trade. The X12 EDI Standard was created by the ANSI board and is the main EDI Standard used in the US. The X12 EDI Standard is also used in Canada, and Mexico.  Outside the US, the EDIFACT EDI Standard is the most widely used (except in England where the TRADCOMS EDI Standard is popular and in Germany where often the ODETTE EDI Standard is used).

Regardless of where you are,  you will need software that supports any EDI Standard and can change as your needs change.  EDI software purchased from most reputable companies supports the EDI Standard that you will need – regardless of country.  The EDI Industry takes care to stay on top of the EDI Standard as it changes  – so it is critical that you stay in touch with your EDI Standard provider to get updates to their software for the most recent version of the EDI Standard. By updating your software on a regular basis, your compliance with the EDI Standard will be guaranteed.  Learning an EDI Standard might be beneficial if you want to create your own implementations or if your software requires you to know the EDI Standard in order to add new trading partners.  In these situations learning the EDI Standard can be accomplished by visiting several internet sources where the EDI Standard is published and available.