ECommerce EDI Toolkit Version September 2008

2 What is EDI? EDI stands for Electronic Data Interchange EDI is the electronic exchange of business data using a published standardized format Partners must agree on the format specifications to be used when exchanging business documents EDI is intended to be a computer-to-computer exchange EDI enables efficient, accurate, and paperless business flows

3 How Does EDI Work? Standard electronic business documents are communicated from an organization’s computer, through translation software, then to an electronic post office, which is called a Value Added Network (VAN) The documents are then distributed by the VAN to all the necessary trading partners Trading partners receive the documents to process through translation into their computer applications

4 EDI Data Flow

5 Supply Chain Typical Message Flows Material Release System Material Receiving System Accounts Payable System Accounts Receivable System Material Shipping System Manufacturing Planning System CumminsSupplier DELFOR DELJIT DESADV APERAK RECADV $$$ INVOIC REMADV Update Inventory (MRP) Bank REMADV $$$

6 Ship Notices Cascading Benefits of Electronic Information Orders Invoices Price Catalogs Invoices Remittance / Payments Evaluated Receipt Settlements

7 Sample EDI DESADV UNB+UNOA: : : : ' UNH+2775+DESADV:D:98B:UN' BGM ' DTM+11: :203' DTM+17: :203' RFF+AAU:M ' NAD+SF ::16++CUMMINS FILTRATION' NAD+ST CUMMINS CMEP+WALESBORO COMPONENTS PLANT:WALESBORO EXIT, RL 22+COLUMBUS+IN+47201' LOC+7+022' RFF+PK: ' TDT LT+MHRE::182' EQD+TE ' CPS+1++4' PAC+7++CTN25' QTY+52:252:EA' LIN :IN' IMD+++:::IDLER ASSEMBLY' QTY+12:1764:EA' ALI+US' RFF+ON:521019' LIN :IN' IMD+++:::IDLER ASSEMBLY' QTY+12:1750:EA' ALI+US' RFF+ON:521019' CNT+2:2' UNT ' UNZ

8 Benefits of EDI Timeliness is increased Data can be exchanged 24 hours a day, 7 days a week No delay due to physical mailing time Customer service is improved Electronic processes meet customer mandates and maintain competitiveness Data throughput time decreases to meet costumer needs Bottom line costs are reduced Data accuracy improves when manual process are eliminated Resources formerly spent reconciling variances and entering data can be used to add value

9 Cummins Business Expectations Information flows are vital to the success of companies in the global business environment Cummins utilizes ECommerce tools to obtain and communicate accurate, reliable, and timely information throughout our supply chain Cummins is committed to meet and exceed our customers’ expectations Cummins expects that our supply chain partners will share our commitment to adopt world-class business practices

10 Cummins ECommerce Expectations Cummins requires all suppliers to use Electronic Data Interchange (EDI) to support business-to- business (B2B) communications Use of EDI EDIFACT message formats as documented in the Cummins Implementation Guides is required

11 Cummins Standard EDI Documents Sending Partner Business Document EDI Message Presented via Traditional EDI Format Presented via Web Browser CumminsForecast / OrdersDELFOR CumminsPull SignalDELJIT SupplierAdvanced Ship Notice DESADV CumminsReceiving AdviceRECADV CumminsData Error NoticeAPERAK SupplierInvoiceINVOIC

12 DELFOR Delivery Forecast Planning schedule with release capability Sent by the customer, Cummins Materials/production forecast by part number May include firm order, planned, and immediate requirements Full schedule replacement will be sent no less than once per week Additionally, net change schedule for a part number may be sent daily

13 DELFOR Benefits Allows direct download of delivery forecast data into supplier’s MRP system Conveys Cummins material requirements in a timely and accurate manner

14 DESADV Despatch Advice Advanced Ship Notice Sent by the supplier Contains list of contents in a specific shipment All DESADVs must be received before the arrival of the material at the Cummins plant DESADV should be sent within 30 minutes of departure from the supplier dock Shipment identification (SID) number must be clearly marked on all packing list documents The SID number cannot be repeated within a 12 month period The purchase order number and part numbers on the DESADV must match the purchase order

15 DESADV Benefits Allows direct download of advanced shipment data into Cummins inventory receiving system Reduces inventory discrepancies, material shortages, and time spent correcting manual errors Provides receiving and materials personnel with visibility of inbound shipments and reduces orders to expedite Avoids time and effort needed to sort through non-standard packing slips to match receiving documentation

16 INVOIC Invoice Invoice Sent by the supplier Allows direct load of invoice to Cummins accounts payable system to increase accuracy and reduce manual effort Purchase order number and part numbers must match the purchase order The EDI invoice must contain identical data when compared to the invoice of record in the supplier’s invoicing and accounts receivable systems

17 INVOIC Benefits Eliminates the risk of an invoice being lost or detained due to traditional mail routing Reduces the costs associated with manually processing invoices 10 full time analysts are needed to process/resolve issues associated with an average monthly volume of 35,000 supplier invoices in Southern Indiana alone Allows an automated reconciliation process Improves data accuracy

18 APERAK Application Error and Acknowledgment Notification of error in DESADV or INVOIC Sent by the customer, Cummins Automatically notifies supplier of a data content error in an EDI document and that the document was not accepted into the customer’s system Supplier is required to correct the error and resend the corrected EDI document

19 APERAK Benefits Eliminates reconciliation errors within systems Notifies suppliers of inconsistent or incorrect data Supports Cummins’ common approach/best practices and requires no manual intervention at the plant Saves time and effort by eliminating the need for materials planners/schedulers or finance managers to follow up with suppliers due to simple data errors Average time for materials planners/schedulers to resolve each receiving error ranges from minutes

20 Other Messages DELJIT Delivery Just In Time Supplement to DELFOR RECADV Receiving Advice Part number / quantity discrepancy PRICAT Price Catalog Up to date pricing information REMADV Remittance Advice Electronic Funds Transfer (EFT)

21 EDI Getting Started Select Integrated EDI or Sterling Web Forms Integrated EDI – computer to computer transfer of data in standard EDIFACT format (requires translation software and a VAN connection) Web Forms – an EDI alternative that allows a trading partner to send and receive documents using a web browser through Sterling Commerce Complete the Supplier Response Form Visit the ECommerce website for more information Contact the Cummins ECommerce Implementation Team