1. TECHNOLOGY TRANSFORMATION SEMINAR
THE ROLE OF
ELECTRONIC DATA INTERCHANGE (EDI)
IN THE OPERATION OF INTERNAL
CLEARANCE DEPOT (ICD).
Presented by David M.A. Quarshie
9TH Feb. 2006
Technology Transformation Seminar

2. Technology Transformation Seminar
INTRODUCTION
Globalization of trade, the emergence of information
economies, and the growth of the Internet and other
global communications networks have recast the role
of information systems in businesses and management.
This is especially the case if the organization concerned
is to use electronic data interchange (EDI) to communicate
with other businesses both within a country and externally
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Technology Transformation Seminar

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WHAT IS ELECTRONIC DATA INTERCHANGE (EDI)
EDI is simply the computer-to-computer exchange of business documents between and among companies.
Electronic Data Interchange (EDI) has been in use since the 1950s,
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Economic Uses of EDI
less expensive than handling paper documents.
Much less labour time is required and fewer errors occur
because computer systems process the document
rather than manual processing.
EDI transactions between companies flow faster and more
reliably than paper documents.
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Technology Transformation Seminar

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EDI AND THE MANAGEMENT OF ICDs
EDI’s efficiency level has made it an important contributor to the efficiency
and perhaps effectiveness of business communications in many ports and
ICDs all over the world.
Regulatory data-flows ( including flows to and from customs, quarantine
and safety authorities)
Commercial data-flows (including bookings, forwarding instructions,
manifests, bills of lading and waybills) and,
Operational data-flows (including those associated with cargo-handling,
container tracking and vehicle scheduling).
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Technology Transformation Seminar

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REGULATORY DATA-FLOWS.
Customs declarations and tariff information are very sensitive
and critical to the management of revenue collection and statistics.
Using manual data entry exposes the documentation processes
to unnecessary human errors. Apart from the fact that the manual
system is slow, erroneous and ineffective, it also turns out to be
expensive.
EDI documents, unlike s which are text documents, use
specific computer record formats which are based on widely
accepted standards. This allows all data fields needed for
processing of documents and output of reports to be captured once
and then made available to all interested parties. Human interventions in the processing of the documents then become very limited thereby ensuring efficiency and reliability in the exchange of information.
Using EDI and Radio Frequency Identification (RFID), for instance,
ensures that all cargo entering the ICDs are
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Fully accounted for
Kept secured until authorized release is granted
Accurately reported to allow for effective Customs profiling
and risk assessment.
It must be understood that EDI is an aspect of the total
information systems setup of an organization. This provides data
from the most accurate source of information – the shippers or their brokers.
Some examples of the uses of EDI in the regulatory data-flows are:
The Ghana Customs Management System (GCMS) –
The Australian Quarantine Inspection Service (AQIS) implements an
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The objectives of these systems are to receive consignment data,
to conduct profiling and risk assessments, and to make decisions
on consignment status, all prior to the cargo arrival at the ICD.
In addition, the systems are able to isolate cargo of any special
interest, and facilitate issues of the remainder.
They also make status information available to interested parties.
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COMMERCIAL DATA-FLOWS
EDI can also be used between shipping lines and individual shippers, exporters and freight forwarders to allow for lower data transfer cost, reduce order time and to provide accurate information to support business decisions.
It enables shipping lines and freight forwarders to lodge manifests
covering all consignments and check manifest details against
And statistical data are generated automatically for other different users.
The Uniform Customs and Practice for Documentary Credit
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OPERATIONAL DATA-FLOWS
Cargo handling, container tracking and vehicle scheduling whose
documentation constitutes the operational data-flow in any ICD are
very crucial and critical to its effective management.
THE USE OF RFID
What is RFId: Radio Frequency identification is a technology that
enable the tracking or identification of objects using IC based tages
With an RF circuit and antenna, and RF readers tag “reads” and
in some case modify the information stored in the IC memory.
Types:
1. Passive
2. Active
Tags: They could be seen at first sight an “improvement” of the bar
code used today almost everywhere.
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TRANSPORTATION & FLEET MANAGEMENT (TFM)
TRM RFId solutions allow for automatic identification of both the vehicle and the goods they carry. Active and passive tags with both short and long reading distances are available for different kinds of applications. Close reading distances from a few centimeters up to one meter and long reading distances even up to 40 meters are possible.
RFId TFM software together with suitable tags, antennas and readers allow vehicle and goods to be identified and tracked in/out of distribution areas for loading and unloading . Furthermore, together with the range of mobile data terminals, automatic vehicle location systems and GPS / GSM products, RFId can offer complete tracking of vehicles and security of goods even when the vehicles are travelling from one geographic area to another.
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HOW EDI WORKS.
Let us look at how an EDI transmission works. A buyer prepares
an order in his purchasing system and has it approved. Next, the
EDI order is translated into an EDI document format called an
850 purchase order. The EDI 850 purchase order is then securely
transmitted to the supplier either via the internet or through a
VAN (Value Added Network).
A VAN is like an electronic post office that interconnects the
buyer and the supplier. The buyer’s VAN therefore interconnects
the supplier’s VAN. The VANs ensure that EDI transactions are
sent and received. The supplier’s VAN ensures that the supplier
receives the order.
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The supplier’s EDI system then processes the order. Data security
and control are maintained throughout the transmission process
using passwords, user identification and encryption. Both the buyer’s
and supplier’s EDI applications edit and checks the documents
for accuracy automatically.
Each trading partner has unique EDI requirements. These will
include the specific kind s of EDI documents to be processed,
such as the 850 Purchase Order used in the example above,
856 Advance Ship Notices and 810 Invoices.
It is important to note that each EDI document must be
exchanged with each partner in exactly the same format
they agree upon. There are EDI implementation guides that
explain their specific requirements.
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Below is a graphic demonstration of the typical flow between suppliers and customers.
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REQUIREMENTS FOR THE IMPLEMENTATION OF EDI.
The following are most of the requirement for the successful implementation of EDI.
Software for communications, mail-boxing of EDI transactions, mapping and translation.
VAN, ASYNC, BISYNC, and Internet communications as required by various partners.
Hardware including a server or PC, communication devices and peripherals.
ecured office space and monitored security
Data backups and redundant power for reliability
Personnel must be trained in the software and communication devices usage
Maps will need to be developed for each EDI document type to be exchanged
with each partner, as appropriate. Maps translate the encoded EDI record into
a useable format.
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CONCLUSION
The benefit of EDI in the ICD value-chain arises from the accuracy
and reliability of consignment data captured, once, at its source,
and the timely transmission or availability of that data to the
relevant organizations further along the chain. However EDI
must not be viewed in isolation but as an integral part of an
organisation’s total information systems.
Getting into EDI is a major business decision.
To help meet EDI needs, there is a new industry:
Protocols -- rules of communication
Do not assume you can fall back to a paper-based system
9TH Feb. 2006
Technology Transformation Seminar