Chapter 9: EDI – the nuts and bolts E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI standards The need for a Common Format Three customers Four suppliers Twelve formats or one standard E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI standards The need for a common format … … EDI provides a standard for data interchange that is: Ready formulated; Comprehensive; Independent of hardware and software; Independent of special interest. EDI standards provide a common language for the interchange of standard transactions. E-Commerce ©David Whiteley/McGraw-Hill, 2000

Evolution of EDI standards Three stages: Early applications/common formats Sector and national EDI standards The international EDI standard E-Commerce ©David Whiteley/McGraw-Hill, 2000

Early applications/common formats Developed by organisations that had to process data from a large number of customer organisations. Standard set by data recipients and the customers conformed to it. Examples: BACS: System of electronic payments (from user organisations). LACES: Freight Clearance System (at LHR). World Meteorological Office (WMO) System: System for exchange of weather information and weather reports. BACS: Bankers automated clearing system LACES: London Airport cargo electronic processing scheme E-Commerce ©David Whiteley/McGraw-Hill, 2000

Sector and national EDI standards Application independent interchange standards, formulated by industry sector and / or national standards bodies. Examples: ODETTE: An EDI format developed for, and widely used in, the European motor industry. TRADACOMS: A UK EDI standard for general trade developed by the ANA (Article Numbering Association). ANSI X12: Developed as an American national standard by ANSI with the aim of replacing the various sector standards. E-Commerce ©David Whiteley/McGraw-Hill, 2000

The international EDI standard To meet the requirements of international and cross sector trade … … EDIFACT was developed, under the auspices of the United Nations (UN), as a universal standard for commercial EDI. EDIFACT: Electronic Data Interchange for Administration, Commerce and Transport Started in Europe in mid 1980s Accepted by US (ANSI) to supersede X12 Promoted as the world EDI standard E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard EDIFACT interchange structure: Each document (order, invoice, etc.) is a Message. Several messages are sent as an Interchange. Messages are made up of Data Segments, eg. Order Date or Buyers Name and Address. Data segment consists of a Tag and Data Items: The tag identifies the data segment. Data items are codes, values and qualifiers. See next slide for diagram. E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard EDIFACT interchange structure (diagram): E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Example EDIFACT interchange: Data segments UNB+UNOA:1+6464:xx+1141:xx+ Interchange Header BEN0273' UNH+000001+ORDERS:2:932:UN' Message 1 Header BGM+220+AC6464' • DTM+4:20000315:102' • NAD+BY+6464326::91' • NAD+SU+1149646::91' • UNS+D' • LIN+1++PT-1073-R:VP' • QTY+21:1600' • LIN+2++PT-1073-S:VP' • QTY+21:1200' • UNT+13+000001' Trailer UNH Message 2 . . . UNT UNZ+1+BEN0273' Trailer Data segments E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Interchange header: UNB Interchange header UNB+UNOA:1+6464:xx+1141:xx+BEN0273 Control Agency UNOA i.e. UN Level A Version 1 Sender Code 6464 Code Qualifier Recipient Code 1141149 Date of Transmission 20000305 Time of Transmission 1233 Control Reference BEN0273 • E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Order message: UNH Message Header UNH+000001+ORDERS:2:911:UN' Message Number 000001 Message Type ORDERS Version 2 Release 911 Control Agency UN BGM Beginning of Message BGM+220+AC6464' Message Name Code 220 i.e. order Document Number AC6464 i.e. order number • E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Order message: DTM Date/Time/Period Qualifier 4 i.e. order date Date 20000305 Format qualifier 102 i.e. century date NAD Name and address NAD+BY+6464326::91' NAD+SU+1149646::91' Party qualifier BY i.e. buyer SU i.e. supplier Address code 6464326 and 1149646 Code list agency 91 i.e. user defined • E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Order message: UNS Section control UNS+D' • Section identification D i.e. detail segment • Separates order header from order lines E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Order message: LIN Line item LIN+1++PT-1073-R:VP' LIN+2++PT-1073-S:VP' Line item number 1 and 2 Item number PT-1073-R and PT-1073-S Item line number VP i.e. vendor part number QTY Quantity QTY+21:1600' QTY+21:1200' Quantity qualifier 21 i.e. ordered quantity Quantity 1600 and 1200 • Line item and quantities in pairs E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Order message: UNT Message trailer UNT+11+000001' Count control 11 i.e. eleven segments Message number 000001 • Message number matches message header E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard Interchange trailer: UNZ Interchange trailer UNZ+1+BEN0273 Control count 1 i.e. one message Control reference BEN0273 • Control reference matches interchange header E-Commerce ©David Whiteley/McGraw-Hill, 2000

The EDIFACT standard The Order Decoded: The order identification is: Order Number AC6464 Order Date 15.03.2000 From Pens and Things: Customer Address Code: 6464326 To Packaging Solutions: Supplier Address Code 1149646 For ‘Executive Elite’ gift cases in red and silver: Qty Product Line 1 (Red Cases) 1,600 PT-1073-R Line 1 (Silver Cases) 1,200 PT-1073-S E-Commerce ©David Whiteley/McGraw-Hill, 2000

Coding standards Codes: Usable as Keys Facilitate sorting Cut down on transmission Save on storage For EDI (and data processing), keys are to be used in preference to text data/descriptions Codes must be recognised and accepted by all parties to a trading exchange. E-Commerce ©David Whiteley/McGraw-Hill, 2000

Coding standards EAN/UPC codes Standard codes for grocery and general retail: Coded as Bar Codes on products Used in order processing / stock control Used in EDI messages. EAN European Article Number 13 digit – 2 digit country code UPC Universal Product Code (American) 12 digit – 1 digit country code Administered by National Article Numbering Associations (ANA) E-Commerce ©David Whiteley/McGraw-Hill, 2000

Coding standards Code: ccmmmmmxxxxxC cc Country e.g.: - UK = 50, - Netherlands = 67 mmmmm manufacturer prefix no. xxxxx item reference C check digit Examples: Baked beans, 420g tin: 50 00157 00171 9 Cream of tomato soup, 300g tin: 50 00157 00207 5 Baked beans, 250g tin: 50 00157 00023 1 E-Commerce ©David Whiteley/McGraw-Hill, 2000

Coding standards EAN code – checkdigit calculation Code: 500015700171 5 x 1 = 5 0 x 3 = 0 0 x 1 = 0 1 x 1 = 1 5 x 3 = 15 7 x 1 = 7 1 x 3 = 3 Sum = 41 Checkdigit = 50 - 41 = 9 EAN code = 5000157001719 E-Commerce ©David Whiteley/McGraw-Hill, 2000

Coding standards EAN code – used in EDI LIN+1++5000157001719:EN' EAN codes can also be used for address point codes, eg: The delivery point: e.g. the goods are sent to a warehouse The invoice point: e.g. the invoice is sent to head office. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI communications EDI communications can be: A magnetic tape or diskette posted or despatched by courier. A direct data communications link. A value added data service (VADS), also known as a value added network (VAN). The Internet. The VADS has tended to be the preferred option (and the Internet, in this context, is another VADS) E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS Postboxes and mailboxes (Post and Forward Network) The postbox: where outgoing messages are placed. The mailbox where incoming messages can be picked up. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS - example Steps 1 and 2 Sava Store establish a link with the VADS Sava Store send an EDI Interchange E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS - example Steps 3 Sava Store establish a link with the VADS Sava Store send an EDI Interchange E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS - example Steps 1 and 2 Best Bread establish a link with the VADS Best Bread retrieves its orders E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS - example The overall VADS network E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS Time Independence Sending and receipt are asynchronous. Say: Sava Store transmits at the end of its overnight processing run. Best Bread pick up their orders next morning. Protocol Independence Each user can use its own protocol Sava Store might have a fixed link using X400. Best Bread could use a dial up link. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI VADS Further VADS facilities: Trading Community: Inter-network Connections: International Connections: Privacy, Security and Reliability: Message Storage and Logging: Message Validation: Local Access: Charges: Software and Consultancy: E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI implementation EDI software E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI implementation EDI software – basic functions: Coding transactions into the EDI Standard. Interfacing with the VADS. EDI software – additional functions: Trading partner database. Support of multiple EDI Standards. Facilities for formatting application data to and from the EDI Standard. Fax or e-Mail transmission to non EDI users. Interfacing with a variety of EDI VADS. Encryption the EDI Message. Automatic acknowledgement. Message tracking and an audit trail. Direct input and printed output of EDI transactions. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI implementation For full integration of the business application and the EDI Software there needs to be an interface to transfer data from the business application to the EDI software and visa versa. For example, to send an order The supplier record has an EDI indicator. Order for EDI suppliers are not printed; EDI orders are formatted onto a flat file; The flat file is input to the EDI software, formatted into the required EDI standard and posted into the VADS. The reverse process is used for incoming EDI messages – arguably they need to be validated. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI implementation EDI operation: A big difference between electronic transactions and their paper equivalents is that with electronic transactions there is no paperwork to fall back on should anything go wrong - all incoming transactions need to be secured. Frequency of operation needs to meet the requirements of the business cycle – it can be daily, hourly or as required. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI implementation EDI alternatives: Large organisation need their own EDI set-up – small companies might: Make use of a free-standing, PC EDI facility. Making use of an EDI clearing house using: Post or Fax. Internet access. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI agreements To achieve a successful, electronically controlled supply chain, businesses need to agree: The nature of the business that is to be done electronically. The technical details of how it is to be undertaken. The procedures for resolving any disputes that arise. The appropriate way to document these details is an EDI Interchange Agreement. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI agreements Legal Framework: Most business law relates to paper based trading and how that law should apply to the less tangible form of an electronic message is not always clear. ‘For EDI to be a successful alternative to paper trading, it is essential that messages are accorded a comparable legal value as their paper equivalent when the functions effected in an electronic environment are similar to those effected in a paper environment, and where all appropriate measures have been taken to secure and store the data.’ (EU-IA) E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI agreements Legal (and related) aspects: The point in its transmission and processing at which a message will be deemed to be legally binding The timescale for processing EDI massages. The time that message will be retained. The procedure for settling any disputes. The legal jurisdiction for settling disputes. Technical aspects: The coding systems for identifying entities. The EDI standard that is to be employed. The network that is to be used. Model agreements are available from various organisations. E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI privacy and security Reliable procedures (data processing standards). Controls in the EDI Standards Controls in the Transmission Protocol. Protection against Tampering (e.g. digital signature) Privacy of Message (e.g. encryption). Non-repudiation (e.g. message acknowledgement or ‘trusted third party’). E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI privacy and security E-Commerce ©David Whiteley/McGraw-Hill, 2000

Nuts, bolts and the tool kit E-Commerce ©David Whiteley/McGraw-Hill, 2000

EDI – further developments e-Procurement systems are being developed using XML formatted messages in place of traditional EDI. E-Commerce ©David Whiteley/McGraw-Hill, 2000

Chapter 9 – Exercise 1 Using the EDIFACT standard information on the web page, format an invoice message for Packaging Solutions to invoice Pens and Things for the goods requested in the order shown at Figure 8.2. (EDI Information is yet to be set up) E-Commerce ©David Whiteley/McGraw-Hill, 2000

Chapter 9 – Exercise 2 Draw up an Interchange Agreement to cover the exchange of orders and invoices between Packaging Solutions and Pens and Things. You may use model agreements obtained from the web (or elsewhere) but the agreement must be fully tailored to the needs of these two organisations. Keep the agreement short; one page should suffice. E-Commerce ©David Whiteley/McGraw-Hill, 2000

Chapter 9 – Exercise 3 Draw up a plan for the implementation of EDI at Pens and Things. The plan is initially for the interchange of orders with Packaging Solutions but should take account of possible future developments. The plan should be no more than two pages long; state any assumptions you have made. E-Commerce ©David Whiteley/McGraw-Hill, 2000