EDI Standard

In order to facilitate the exchange of business communication between enterprises, the EDI standard was created. The EDI standard allows for documents to be exchanged between entities, independent of transmission or software technologies. Through the use of the EDI standard, documents can be sent via a variety of methodologies that have been agreed upon between two trading partners. Examples of transmission methods include modems, FTP (insecure and secure), e-mail, HTTP, AS1 and AS2. It's important to note that there are separate EDI standards for communication vs. EDI standard documents.

The Development of EDI Standard

As the internet became a prevalent communication medium, standards for communication were developed. The IETF released the RFC 3335 in 2002 which set an EDI standard for secure transmission of EDI using e-mail. The same organization ratified RFC4130 for MIME-based HTTP EDIINT transfers (simply referred to as the AS2 EDI standard by most people). The same group from IETF developed an EDI standard for FTP based transfers known as AS3.

How a EDI Standard Works An EDI standard message contains the same data of paper documents used for the same type of transaction. For instance, manufacturers use an EDI 940 “ship-from-warehouse” order to instruct a warehouse to transport a specific product shipment to a retailer. This EDI standard document contains a “ship to” address, a “bill to” address, a list of product numbers (usually in the form of a UPC code) as well as quantities. Additional information may also be included depending on the needs and agreements between the sender and the receiver. EDI standards are all encompassing with areas such as health care transportation, mortgage, finance and construction each having an EDI standard covering everything from patient records and lab results (healthcare) to container and modal data (transportation). An EDI standard can often encompass the transmission of data that was not feasible in pre-EDI standard days. The EDI X12 EDI standard message 856 Advance Shipment Notification, or ASN for short, was created to inform the recipient of a shipment of the types of goods on the shipment and the method of packaging for the shipment.

An EDI standard has regional implications:

EDIFACT was developed by the United Nations to facilitate international trade. This is the prevalent EDI standard used outside of the United States.

The X12 EDI standard was created in 1979 by the American National Standards Institute Accredited Standards Committee X12.
The TRADCOMS EDI standard is used in the United Kingdom, especially in the retail value chain. This EDI standard was created by the Article Numbering Association.

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

EDI standards became more widely adopted and used in the 1980s. Formats, character sets, and data elements that companies should utilize in electronic B2B document exchange are controlled by the EDI standard.

Becoming EDI Standard Compliant

Business owners are often exposed to an EDI standard through ‘requirements’ that are set by their partners. Fortunately, however, you don’t have to become familiar with the EDI standard in order to benefit. Becoming compliant with an EDI standard is easily achieved by relying on companies like EMANIO that specialize in software and services that are EDI standard compliant. A software vendor like us that specializes in understanding the EDI standard, creates products that can ‘translate’ an EDI standard document into one that is in “human readable” form. The advantage of relying on software vendors is that it can make complying with the EDI standard far easier and significantly less expensive.

Which Standard Should you Choose?

Achieving compliance with any EDI standard is not difficult. The first step is to use an EDI standard software product that supports all the EDI Standard variations that you will need. The location of the companies with which you trade will determine which EDI standard your software must support. The X12 EDI standard was created by the ANSI board and is the EDI standard primarily used in North America. In other parts of the world the EDIFACT EDI standard is more prevalent except in England where the TRADCOMS EDI standard is used and in Germany where the ODETTE EDI standard is very popular. Ideally, you will want to choose an EDI Standard compliant software supplier who supports any EDI standard that you need, regardless of geography.

Selecting the Right Vendor

As you select a vendor that supports the EDI standard you need, it’s important to select one that can adapt as your EDI standard needs change. As EDI standards are modified by the EDI standard committees, it’s important to work with a vendor that can provide you with the necessary updates to maintain your EDI standard compliance. As your business grows and your use of EDI standard communication grows with it, you might want to consider upgrading your software to one that allows for the automated translation from the EDI standard to a file-format that can be automatically imported into your ERP system. Companies like EMANIO with years of experience in EDI standard software can often provide you with add-ons that will allow for this translation between the EDI standard and your ERP system. Working with companies like ours will allow you to de-mystify the EDI standard.

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