EDI Core Standards – Data Interchange

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EPIC

EDI Core Standards

VM-0001-11

Copyright Data Interchange Plc

Peterborough, England, 2012.

All rights reserved. No part of this document may be disclosed to
third parties or reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without the prior written
permission of Data Interchange Plc.

About this book:

This book contains information about EDI standards.

Who this book is for:

The book is intended for readers who wish to know more about EDI standards.

What you need to use this book:

There are no prerequisites to this publication.

Related Publications:

Table of Contents

1

A beginner’s guide to EDI …………………………………………………………….. 1

1.1
1.2
1.3
1.4
1.4.1
1.4.2
1.4.3
1.5
1.5.1
1.5.2
1.5.3
1.5.4
1.5.5
1.5.6
1.5.7

What is EDI? …………………………………………………………………………………………. 1
Advantages of EDI …………………………………………………………………………………. 1
What is EDI for? …………………………………………………………………………………….. 2
What does an EDI document contain? ………………………………………………………. 2
The Order …………………………………………………………………………………………. 3
The Despatch Advice …………………………………………………………………………. 3
The Invoice ………………………………………………………………………………………. 3
EDI Standards ………………………………………………………………………………………. 3
Why do we need standards? ……………………………………………………………….. 3
Who writes the standards? ………………………………………………………………….. 4
Why are there so many standards? ………………………………………………………. 5
What is an EDI message? …………………………………………………………………… 5
How do I read an EDI message? ………………………………………………………….. 6
EDI message example ……………………………………………………………………….. 6
VDA Standard …………………………………………………………………………………. 12

EDI Core Standards

iii

1

A beginner’s guide to EDI

1.1

What is EDI?

EDI stands for Electronic Data Interchange. EDI is the exchange of structured
data in electronic form direct from one computer system to another. The data is
transferred electronically between two parties, usually a supplier and a
customer.

The two parties are known as trading partners. The most common trading
partner relationship is that of supplier and customer. Sometimes there may be
a different relationship, such as that of seller and buyer, payee and
invoicee, or supplier and carrier. Each trading partner may play different
roles during the business process, as illustrated in the diagram below, or each
role may be played by a different partner.

The data transferred between the trading partners is business data, such as
orders, despatch advices and invoices, in the form of standardised documents.
They have to be standardised so that they can be deciphered by the computer
system that receives them.

1.2

Advantages of EDI

One of the aims of EDI is to reduce the time taken for documents to be
transferred between trading partners, and, where possible, to remove the need
for the keying in of data to their computer systems.

In order to conduct business, the customer and the supplier are involved in a
two-way communication that includes some or all of the following actions:

 The customer requests a price list from the supplier.
 The supplier sends the customer a price list.
 The customer and supplier agree a contract for the supply and purchase of

products/services.

 The customer sends an estimated order (forecast) to the supplier.

A beginner’s guide to EDI

1

 The customer sends a definite order to the supplier.
 The supplier sends an order acknowledgement to the customer.
 The supplier sends an advance shipping notification to the customer.
 The supplier ships the order together with an advice note.
 The customer receives the goods.
 The customer sends the supplier confirmation of delivery.
 The supplier invoices the customer for the order.
 The customer, upon receipt of the supplier’s invoice, checks that the goods

delivered match the goods being invoiced, and then pays the supplier.

 The customer sends the supplier a remittance advice note.

Before EDI, these business activities would have been formalised by the use of
paper documents, such as a Purchase Order or an Invoice. These documents
were used to state requirements, make agreements and provide other kinds of
business information. Since they were paper-based they had to be posted or
faxed. Posting involved extra delay, which meant that the data could be out of
date by the time it was received. Both posting and faxing meant that data
contained in the documents had to be typed into the computer system when it
was received.

With EDI, the time taken to transfer information electronically between trading
partners is minimal. In many cases, partners can communicate with each other
directly, so
instantaneous. Even when
communication is via a third party the information is usually available within
minutes.

is practically

that data

transfer

Another advantage of EDI is that data received electronically can be integrated
into existing computer systems without the need for time-consuming and error-
prone manual data entry.

1.3

What is EDI for?

EDI makes it quick and easy for trading partners to send each other information
relating to their everyday business transactions such as ordering, shipping and
invoicing.

It not only speeds up these transactions but increasingly, as more companies
integrate their internal business systems, results in fewer errors because less
data has to be processed manually.

1.4

What does an EDI document contain?

For both paper documents and EDI documents, there is always a minimum
amount of data required. Without this minimum, the document does not fulfil its
purpose. For example, an order should state which products are required, what
quantity of each product is needed, when they should be delivered and to which
address they should be sent. If the delivery address is not given, we would end
up with the situation where the goods have been produced and packaged up, but
left lying around because we don’t know where to send them!

2

A beginner’s guide to EDI