[Ebook] EDI: A Thought Leadership Ebook for SMBs

A Thought Leadership Guide to
EDI
A VL OMNI Ebook
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Contents
Introduction
Chapter 1
EDI: What You Should Know
Chapter 2
Before Your EDI System: How Clean is Your Data
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06
07
Chapter 3
What You Should Know About EDI Compliance
Testing 08
Chapter 4
Predictions & Groupthink: How to not get Trapped
10
Chapter 5
Buyer beware: Two Common Pitfalls Surrrouding
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Chapter 6
EDI System Selection: Plan for Growth & Your
Needs
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Chapter 7
Why Your EDI System should do more than just
EDI
Chapter 8
AS2 & The Death of the EDI Value Added Network
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17
Chapter 9
The Shortcomings of Partially Integrated EDI
Chapter 10
10 Steps for Approaching a New EDI System
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19
Chapter 11
EDI Integration: 5 Common Mistakes 21
Chapter 12
The Rise of Spreadsheet and Flat File
Integration 23
Conclusion 24
Resources
25
About VL 26
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Introduction
This thought leadership guide covers a wide range of topics surrounding EDI and EDI-related solutions for
SMBs . We start this ebook with reviewing the role EDI has played in buisness in the past, moving into how
EDI is used and integrated into business operations today, following with predictions for the future. Along
the way, we will address the many pitfalls any business may encounter, including partner recommeded solutions,
hype cycles, groupthink, and common assumptions. Our goal in writing this ebook is provide an educational
source of information regarding EDI to help you, the reader, make informed decisions as you look to
adopt EDI for the first time, update xisiting systems, or find efficiencies and cost vings.
We at VL hope you enjoy reading the expert knowledge complied this ebook for more resources and information
on how VL can help your buisness with EDI,or any other omni-channel data integration needs, visit
VLOMNI.com.
- The VL Team
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Chapter 1
EDI: What You Should Know
When computers started to be used by major organizations back in the 1960’s, there was a immediate need
for systems that could communicate and exchange business information between applications in a consistent
manner.
While the data exchange processes were proprietary at first, ANSI (American National Standards Institute)
and UN/EDIFACT (United Nations Directories for Electronic Data Interchange for Administration, Commerce,
and Transport) developed Electronic Data Exchange (EDI) standards. These standards to set international
guidelines for data communication and movement, and provided a consistent method for how different
computer systems were to move data from one to another. Each type of EDI document was assigned a
number. For example, X12 documents have these numbers referenced against the EDI standards by computers
in order to decode what type of document was being sent. EDI, put simply, standardized the electronic
sending and receiving of documents, no matter the industry.
And EDI has been a central method for moving business documents electronically ever since -- although
developments in automation and technology have allowed for imprevements in sophistication. For example
integrated EDI is of utmost importance today if a business has a certain level high of volume with customers
or vendors; without integrated EDI, fulfilling these t ansactions is near impossible.
Over time, EDI has evolved from its original format and use, and is still highly used today. EDI is crucial to the
functionality of many businesses, and will likely continue to be for the foreseeable future as EDI remains a
core communication method for many retailers and supply chain partners.
Some Common EDI Transactions
EDI and the transactions it handles can be complex, but management should be aware of some basic fuctions.
Purchase Orders (POs) (EDI document number 850 or 875) for goods or services are built using
EDI standards. This includes the format and size of the purchase order number, the date, the billing information,
and the shipping information. Purchase Order EDI documents also include information regarding,
and the line item information including quantity, product number, product description, and price. Basically
Everything that was on a paper PO is included in an EDI PO.
Invoices (EDI document number 810 or 880) follow purchase orders. The EDI 810 document replaced the
paper invoice. Many businesses created agreements surrounding these EDI standards and pay according to
the results of the electronic transactions.
Shipping Notices (EDI document number 856) are sent in response to an EDI purchase order after it’s received.
The shipping notice or ASN (Advance Ship Notice) is sent before a shipment arrives at the customer,
and in some cases it becomes the physical invoice.
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This allows the customer’s computer to validate what was shipped against the purchase order, so when
the actual goods are checked in at the receiving warehouse or store, an automated confirmation of receipt
occurs. The electronic reconciliation enables a retailer to greatly reduce costs associated with the manual
handling of shipments.
There can be additional EDI transactions in a more complex supply chain where third party warehousing
and fulfillment (3PL) is used. Warehouse Ship Documents (EDI number 940) are used with warehousing
and distribution to send a shipping request to a third party logistics partner or fulfillment house. Shipping
Advices (EDI number 945) are then returned by the third party logistics provider to notify and confirm that
the items that have shipped and invoicing is required.
There is much more beyond these basic EDI transaction numbers to know, but more depth of knowledge at
this point is usually left to technical experts. Management, at the very least, should be aware of these six EDI
document types reviewed in this chapter.
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