1. Chapter 9: EDI – the nuts and bolts
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2. EDI standards The need for a Common Format Three customers
Four suppliers
Twelve formats or one standard
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3. 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

4. Evolution of EDI standards
Three stages:
Early applications/common formats
Sector and national EDI standards
The international EDI standard
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5. 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
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6. 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.
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7. 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
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8. 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.
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9. The EDIFACT standard EDIFACT interchange structure (diagram):
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10. The EDIFACT standard Example EDIFACT interchange: Data segments
UNB+UNOA:1+6464:xx+1141:xx+ Interchange Header
BEN0273'
UNH ORDERS:2:932:UN' Message 1 Header
BGM+220+AC6464' •
DTM+4: :102' •
NAD+BY ::91' •
NAD+SU ::91' •
UNS+D' •
LIN+1++PT-1073-R:VP' •
QTY+21:1600' •
LIN+2++PT-1073-S:VP' •
QTY+21:1200' •
UNT ' Trailer
UNH Message 2
. . .
UNT
UNZ+1+BEN0273' Trailer
Data segments
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11. 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
Date of Transmission
Time of Transmission 1233
Control Reference BEN0273 •
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12. The EDIFACT standard Order message: UNH Message Header
UNH ORDERS:2:911:UN'
Message Number
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 •
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13. The EDIFACT standard Order message: DTM Date/Time/Period
Qualifier 4 i.e. order date
Date
Format qualifier 102 i.e. century date
NAD Name and address
NAD+BY ::91'
NAD+SU ::91'
Party qualifier BY i.e. buyer
SU i.e. supplier
Address code and
Code list agency 91 i.e. user defined •
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14. The EDIFACT standard Order message: UNS Section control UNS+D' •
Section identification D i.e. detail segment •
Separates order header from order lines
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15. 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
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16. The EDIFACT standard Order message: UNT Message trailer UNT+11+000001'
Count control 11 i.e. eleven segments
Message number •
Message number matches message header
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17. 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
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18. The EDIFACT standard The Order Decoded: The order identification is:
Order Number AC6464
Order Date
From Pens and Things:
Customer Address Code:
To Packaging Solutions:
Supplier Address Code
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
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19. 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.
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20. 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)
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21. 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:
Cream of tomato soup, 300g tin:
Baked beans, 250g tin:
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22. 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 = = 9
EAN code =
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23. 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.
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24. 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)
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25. 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.
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26. EDI VADS - example Steps 1 and 2
Sava Store establish a link with the VADS
Sava Store send an EDI Interchange
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27. EDI VADS - example Steps 3 Sava Store establish a link with the VADS
Sava Store send an EDI Interchange
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28. EDI VADS - example Steps 1 and 2
Best Bread establish a link with the VADS
Best Bread retrieves its orders
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29. EDI VADS - example The overall VADS network
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30. 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.
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31. 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:
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32. EDI implementation EDI software
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33. 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 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

34. 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

35. 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.
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36. 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.
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37. 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.
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38. 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)
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39. 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.
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40. 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’).
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41. EDI privacy and security
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42. Nuts, bolts and the tool kit
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43. EDI – further developments
e-Procurement systems are being developed using XML formatted messages in place of traditional EDI.
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44. 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)
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45. 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.
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46. 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.
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