Electronic Data Interchange (EDI)

[seminar class]

PRESENTED BY:
K .T MOHAN

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Electronic Data Interchange & Applications in Business
EDI: Electronic Data Interchange
• What is EDI?
EDI is defined as the electronic transmission of business documents in a standard format between two companies.
• EDI & Electronic Commerce:-
 Electronic commerce includes EDI & much more
 EDI forges boundary less relationships by improving interchange of information between trading partners, suppliers, & customers
EDI semantic layer:-
 Describes the business application
 Procurement example
 Requests for quotes
 Price quotes
 Purchase orders
 Acknowledgments
 Invoices
 Specific to company & software used
Physical network infrastructure layer:-
 Dial-up lines, Internet, value-added network, etc.
Standards translation:
Specifies business form structure so that information can be exchanged
Two competing standards
American National Standards Institute(ANSI)X12
EDIFACT developed by UN/ECE, Working Party for the Facilitation of International Trade Procedures
EDI transport layer
How the business form is sent, e.g. post, UPS, fax
Increasingly, e-mail is the carrier
Differentiating EDI from e-mail
Emphasis on automation
EDI has certain legal status
EDI in Action
INFORMATION FLOW WITH OUT EDI :-
The fig shows the information flow when paper documents are shuffled between organizations via the mailroom
When the buyer sends a purchase order, then relevant data extracted & recorded on a hard copy.
This hard copy is forwarded to several steps, at last manually entered into system by the data entry operators
This process is somewhat overhead in labor costs & time delays.
INFORMATION FLOW WITH EDI :-
1. Buyer sends purchase order to seller computer
2. Seller sends purchase order confirmation to buyer
3. Seller sends booking request to transport company
4. Transport company sends booking confirmation to seller
5. Seller sends advance ship notice to buyer
6. Transport company sends status to seller
7. Buyer sends Receipt advice to seller
8. Seller sends invoice to buyer
9. Buyer sends payment to seller
EDI as a fast, inexpensive & safe method
EDI Standards:-
EDI requires companies to agree on standards
– Compatible hardware and software
- Agreed upon electronic form format
How to Subscribe to EDI:-
Larger companies purchase hardware and software
Medium and small companies seek third-party service
– Value-added networking (VAN)
– Managed network services available for a fee