Introduction

What is EDI
Business Before EDI
Business with EDI
EDI Process
Benefits of EDI
Drawbacks of EDI

EDI Standards

EDI X12 Standard

X12 Segments and Elements
X12 Envelopes
EDIFACT Standard
EDIFACT Segments and Elements
EDIFACTEnvelopes
Stands for Electronic Data Interchange

EDI is computer-to-computer exchange of routine business data

between trading partners in standard data formats.

Computer to computer - Electronically

Business data – Meaningful Data
Standard data format – Accepted Worldwide

EDI is the electronic exchange of information between two business

concerns (referred as Trading Partners in the EDI world), in a specific
predefined format
Typical PO communication in past:

 Purchase order data is manually keyed into a computer.

 Purchase order is printed.
 Internal mail is used to send purchase order to various
departments for processing.
 Copies of purchase order are filed in various departments.
 Purchase order is approved and mailed.
 Purchase order is delivered by post office.
 Data entry personnel for the company receiving the purchase
order re-key the data.
With EDI, documents could be sent electronically
EDI automates the exchange of standard business data.
EDI replaces cumbersome proprietary use of files and/or manual paper
documents
EDI accommodates rapid response to customer demands.

EDI results in
Higher throughput
Fewer errors
Less associated cost.
1) A buyer has a need for merchandise and creates a Request for
Quote (RFQ) document.
2) The seller responds with a Quote providing the price and other
pertinent information as to how the request would be fulfilled.
3) Upon acceptance of the quote, the buyer sends a Purchase
Order document to the seller requesting goods at quoted prices.
4) The seller responds acknowledging that the goods can be
delivered at the prices specified and in the time frame indicated.
5) The seller ships the goods and sends a Shipping Notice
providing details regarding the carrier, product identification,
dates, and other information about the shipment.
6) The seller sends an Invoice document, billing the buyer for the
goods.
7) The buyer notifies his bank that payment is to be made (Payment
Order) and uses another form of the same document
(Remittance Advice) to inform the seller that payment is being
made.
EDI process is composed of following levels :

 Application Level
 Translation Level
 Communication Level
At Application level business documents are present in a
Standard Format.
In a traditional business environment, there are no agreed
upon standards for paper documents or file formats
Applications produce various document formats and require
different information
Locating and interpreting information on different document
formats reduces productivity

This arises a need for translation to one common format

An application capable of converting data to and from EDI
standard is refereed as a translation software

There are two main functions performed at translation level

by a translation software
1.Translation software translates business documents into a
common EDI standard for transmission to a trading partner
2.Translation software also translates EDI Standard data into
a format suitable for application processing
A translated documents is supposed to be transmitted to a
third party.

This requires a communication network such as:

1.Value Added Networks or VANs

2.Point to Point (Direct)
3.Internet Service Provider
 VAN(Value added network)

• VAN is a specialized application service provider that acts as an

intermediary between trading partners for sharing data or business
process.
• VAN’s served as “electronic post office” for buyers and suppliers
that need to exchange data, validation and delivery monitoring.
• They offered store-and-forward mailboxes that provide protocol
conversion, security and guaranteed delivery using software and
hardware encryption.
• Secure protocols that it supports are AS1, AS2, AS3, FTTP(S),
HTTP(S), SMTP, POP3.
SPEED - Being an electronic message, takes minutes to
cross nations
ACCURACY - Single entry of data improves accuracy
ECONOMY - Overall cost is less
High Initial Cost
Complexity
Technical training required
User acceptance
A standard is a method of coding data to facilitate Electronic Data
Interchange (EDI).

It provides:

Rules of syntax – How data should be arranged

Editing rules and conventions
Published public documentation (i.e., a Standards Manual)

It specifies:

The segments used to specify in a Business document

The sequence in which the segments must appear
Whether segments are mandatory or optional
When segments can be repeated
How loops are structured and used
Some of the EDI standards used widely are:

UN/EDIFACT Standard - is the only international standard and is

predominant outside of North America

ANSI ASC X12 Standard - is predominant in North America

TRADACOMS Standard - is predominant in the UK retail industry

ODETTE Standard - used within the European automotive industry

ASC X12 is the ANSI Accredited Standards Committee developing EDI
standards for use in the United States

The X12 standards provide structure for the electronic representation of

business documents exchanged between companies.

For example: Purchase Order, Invoice, Shipment advice

X12 standard provide a means to encode business dociments so that they

may be interpreted by a computer application

X12 standards provides means to organize this data into business documents
called Transaction sets, group these into groups of related documents called
Functional Groups and wrap these up in an envelope called Interchange.
A Transaction set is a single business document
such as Purchase Order, Invoice or
Shipment Notice.

In ANSI X12, a Transaction

set is identified by a 3
digit code as shown in figure

A Transaction set is a
collection of Segments and
is divided into 3 Parts

Header
Detail
Summary
 ST*850*6554'
BEG*00*SA*156282**20031211'
REF*DP*440'
FOB*CC*OR*ORIGIN‘
Header ITD*08**2**30**31'
DTM*001*20031219'
Section
DTM*002*20031218'
TD5*B***H*SEE MEIJER ROUTING REQUIREMENT BOOK‘
N1*BT*MEIJER*9*0069595550000'
N3*P.O. BOX X'
N4*GRAND RAPIDS*MI*49501'
PO1**16*DZ*298**UP*041209*VC*03040*CB*5006*UA*004120'
PID*F*08***MEIJER NICOTINE TRNSPTCH STP 1 21MG14 CT'
Detail PO4*12‘
Section PO1**16*DZ*298**UP*041209*VC*03040*CB*5006*UA*004120'
PID*F*08***MEIJER NICOTINE TRNSPTCH STP 1 21MG14 CT'
PO4*12‘
Summary CTT*2*3177’
Section AMT*TT*485.83’
SE*20*6554'
A Transaction set is a collection of various segments.

Each segment represent one single piece of information

Segment contains:

1. Variable length data elements

2. Data element separator or Delimiter
3. Segment Terminator
A Qualifier is an element which qualifies a data value following it.
It specifies what the value following it means or represent
Qualifiers are also called as ‘codes’ in EDI.
Qualifiers are pre-defined in each standard in the EDI world and are known
by all those using these standards.

 For example :
 EDI Envelope Structure
with one Functional Group
ISA Interchange header
GS Functional Group header

ST Transaction Set header

BEG
REF
PER
Example ASC X12 850 Purchase Order

DTM
PO1
PID
PO4
TD5
REF
CTT
AMT

SE Transaction Set trailer Purchase Order

ST Transaction Set header Data Segments
BEG
REF
PER
DTM
PO1
PID
PO4
TD5
REF
CTT
AMT

SE Transaction Set trailer

GE Functional Group trailer

. 25 IEA Interchange trailer

 EDI Envelope Structure
with multiple Functional Groups

ISA Interchange header

GS Functional Group header

ST Transaction Set header
850
850
SE Transaction Set trailer
Purchase ST Transaction Set header
Orders 850
850

ST Transaction Set header

GE Functional Group trailer
GS Functional Group header
ST Transaction Set header
Invoice 810
810
SE Transaction Set trailer
GE Functional Group trailer

GS Functional Group header

ST Transaction Set header

Price/Sales 832
832
Catalog SE Transaction Set trailer
GE Functional Group trailer

. 26 IEA Interchange trailer

Enveloping is the process of wrapping up of data with additional
identifying segments

Every X12 document is wrapped up in 3 levels of enveloping

1. ST/SE – Transaction level is first level of enveloping

It contains one single transaction set.
2. GS/GE – Group Level is second level of enveloping.
It contains multiple ST/SE envelopes with similar
business transaction
3. ISA/IEA – Interchange Level is third level of enveloping
It contains multiple GS/GE envelopes
Following figure identifies the three levels and how they relate to
each other :-
ISA*00* *00* *09*2540246569999 *ZZ*NGPROD
*040310*2129*U*00401*000001281*0*P*>N/L
IEA*1*000001281N/L
GS*IN*2540246569999*4167913211*20040310*2129*595*X*004010VICSN/L
GE*1*595N/L
ST*810*000002246N/L
SE*38*000002246N/L
Delivery status of an EDI document is communicated through a
Functional acknowledgement document
One functional acknowledgment is created for each functional group
received
Various Status that can be reported are :
Accepted
Rejected
Accepted with errors
Partially accepted (at least one transaction set was rejected)
In X12 FA document is called as 997, example as follows:
EDIFACT stands for EDI For Administration, Commerce and Transport

It was developed by UN/ECE (United nations / Economic Commission

for Europe)

The EDIFACT standards also provide structure for the electronic

representation of business documents exchanged between companies.

Messages are represented by a six character name such as

ORDERS – PO message
IFTMIN – Instruction message
REMADV – Remittance advice

EDIFACT standards also provides means to organize data into

business documents called Transaction sets, group these into groups
of related documents called Functional Groups and wrap these up in
an envelope called Interchange envelopes.
A Transaction set is a single business document which is made up of
various Segments

In EDIFACT, each message starts with a Message Header (UNH) and
ends with a Message trailer (UNT)

Each message is divide into three parts :

Header
Detail
Summary
 UNB+UNOB:2+8026924990014:14+5060010450009:14+080410:
0502+000006'
UNH+638934+ORDERS:D:96A:UN:EAN008'
BGM+220+4117085+9'
Header DTM+137:20080409:102‘
Section NAD+SU+5060010450009::9‘
NAD+BY+8026924990908::9‘
CUX+2:EUR:9'
LIN+1++0711719921950:EN'
PIA+1+9921950:SA::91‘
IMD+B++:::BUZZ THE POP QUIZ?+BUZZER'
QTY+21:3'
Detail PRI+AAA:39.52'
Section LIN+2++0711719468356:EN'
PIA+1+9468356:SA::91‘
IMD+B++:::G.CO PS3 GT5 (PROLOGUE)'
QTY+21:4'
PRI+AAA:26.6'
Summary UNS+S'
Section UNT+24+638934'
UNH+638935+ORDERS:D:96A:UN:EAN008'
A Segment is a collection of logically related data Elements in a
fixed defined sequence

Segments Contain :

A three character AN code called Segment Tag which identifies

the segment
Variable length Data elements. Can be Simple or Composite
 Element separator or Delimiter and Segment Terminator
The end of each segment is determined by the Data Segment
Terminator. In EDIFACT the standard data segment terminator is ‘.

Optional or conditional data elements that are not used must be

accounted for by their position with the
segment. Here is an example:

However, optional or conditional data elements without data that

appear at the end of a data segment
do not need additional data element
separators to correctly position the
data. Here is an example:
EDIFACT can represent data in two ways

Simple Data elements containing one piece of information

Composite Data elements containing more than one piece of
information.

The composite data element is made up of 2 or more pieces of data

(known as components) which form a single date unit.
Typically the first data element is the value, which is being qualified.
The second data element is typically the qualifier.

The composite data elements (C078 and C088) are made up of

various conditional components. Because they are conditional not all of
the data elements are used. All components are separated by a sub-
element qualifier (:).
Enveloping is the process of wrapping up of data with additional
identifying segments

Every EDIFACT document is wrapped up in 3 levels of enveloping

1. UNH/UNT – Transaction level is first level of enveloping

It contains one single transaction set.
2. UNG/UNE – Group Level is second level of enveloping.
It contains multiple UNH/UNT envelopes with
similar business transaction
3. UNB/UNZ – Interchange Level is third level of enveloping
It contains multiple UNG/UNE envelopes
Following figure identifies the three levels and how they relate to
each other :-
 ASC X12 and UN/EDIFACT
Interchange Structure comparison
ANSI X12 Transaction Set Structure UN/EDIFACT Message Structure
Service String Advice (UNA)
Interchange Control (ISA) Interchange Header (UNB)

Functional Group Header (GS) Functional Group Header (UNG)

Transaction Set (ST) Message Header (UNH)

Detail Data Segments

Detail Data Segments
(Purchase Orders,
Invoices, ASN's, etc.) (ORDERS, INVOIC,
ORDRSP, etc.)

Transaction Set (SE) Message Trailer (UNT)

Functional Group Header (GE) Functional Group Trailer (UNE)

Interchange Control (IEA) Interchange Trailer (UNZ)

. 42
It is the responsibility of the receiver’s computer to check the
syntax and control numbers of the transmission and to build and
transmit back to the sender this Functional Acknowledgment.
The EDIFACT CONTRL message will provide this functionality
Q&A