EDI (Electronic Data Interchange) is a technology that enables the exchange of commercial information between organizations in a structured digital form based on regulated message formats and standards.
GS1 EDI includes global standards for electronic business correspondence. These standards enable the use of automated electronic transmission of harmonized business information between trading partners. The automation of the process ensures its speed, efficiency and accuracy.
GS1 currently has three sets of complementary EDI standards:
- GS1 EANCOM®
- GS1 XML
- GS1 UN/CEFACT XML
These standards were developed in parallel by different users, although the XML standard is better adapted for data exchange using Internet technologies.
An impressive amount of paper documentation is created and processed daily in business. It includes purchase orders, invoices and product catalogs, sales reports, etc. Be that as it may, it is desirable for such information to precede, accompany and follow the flow of goods in commercial transactions. Electronic data interchange provides the most efficient mechanism for managing this process.
What EDI is and where it is needed?
1. What are the benefits of EDI?
Today, most of the data contained in commercial documents is generated from existing computer application programs. Paper documents are printed and copied before the information they contain is finally transmitted by mail or fax. In turn, the business partner re-enters all the data manually into another computer application program for further processing. This is a slow, costly and unreliable method.
Electronic Data Exchange provides an efficient way for trading partners to automatically transfer business information from one computer directly to another. Moreover, companies no longer have to worry about incompatible computer systems. Using messaging standards such as EANCOM, data can be transferred quickly, efficiently and accurately, regardless of the type of user's software and hardware.
EDI simplifies information processes, and this reduces its costs in terms of time and cost.
Successful EDI implementation provides great benefits for the company and its trading partners:
Cost-effectiveness: Significant reductions in the volume of paperwork to be processed reduce administrative and payroll costs. The workforce can be utilized for more important functions within the company.
Increased data processing speed: Large amounts of business information can be transferred from one computer to another in a matter of minutes, ensuring faster response times and customer satisfaction.
Improved accuracy: EDI avoids potential errors when manually entering information into a computer. Better logistics management and increased productivity: EDI allows companies to better control and manage the manufacturing, purchasing and delivery process. EDI is a key component of just-in-time manufacturing and the customer-supplier chain operating on a "Quick Order Response" basis, resulting in significant reductions in excess inventory.
2. EDI and UN/EDIFACT standarts?
EDI is not a new invention in business practice; some companies have been using it based on internal formats since the late 1960s. However, for EDI implementation to remain cost-effective, trading partners must use a common language when exchanging messages containing business and commercial information. In the mid-1970s, EDI industry standards in some countries were merged, which in some cases led to the creation of nationwide standards after several years. It became clear that in order for EDI standardization to meet the requirements of the business world community, the creation of an international, multi-sector EDI standard was necessary. By the mid-1980s, the creation of an EDI standard began to take shape through the work of the United Nations Economic Commission for Europe (UN/ECE), in the Working Group on Facilitation of International Trade (WFI4). In 1987, the syntax or grammar of this common language of business communication, now known by the acronym UN/EDIFACT, was recognized as ISO 9735.
The UN/EDIFACT standard or Electronic Data Interchange in Administration, Commerce and Transport, adopted within the framework of the United Nations, consists of a set of internationally agreed standards, catalogs and guidelines for electronic data interchange.
Organizational structure of UN/EDIFACT. More than 60 countries and a large number of international organizations such as the European Commission, IATA, International Chamber of Commerce, International Organization for Standardization, ISO, International Chamber of Shipping and GS1 International Association are represented in the UN/ECE WP.4. GS1 International Association is an active participant in the UN/EDIFACT standard setting process at the national, regional and international levels.