EDI stands for Electronic Data Interchange and is an umbrella term for the electronic exchange of data between companies, such as orders, order confirmations, packing slips and invoices. Message traffic in EDI always follows an agreed standard, so that the software systems of the companies that communicate with each other speak the same, uniform language.

Advantages of EDI

Within a supply chain, different companies work closely together in a chain, such as manufacturers, suppliers, carriers, wholesalers and retailers. There is much to be gained within this collaboration. All parties within the chain benefit from better cooperation, including the end customer. EDI plays a crucial role in this because it ensures that the many documents that these trading partners exchange with each other are processed more efficiently and effectively.

This has several advantages:

  • EDI offers a competitive advantage because unnecessary steps in the process are eliminated and thus added value for the customer is created.
  • EDI prevents errors, because no human factor is involved.
  • The EDI process is very fast because data exchange takes place electronically.
  • EDI saves time, so professionals can focus on adding value for the customer.
  • EDI eliminates the need for paper and thus contributes to the achievement of sustainability goals.
  • Suppliers increase their competitive position with customers when these customers already work with EDI.

EDI messages

There are various types of EDI messages that automate various processes between trading partners, such as order messages, stocks, deliveries and invoices.

Some examples of common EDI messages are:

  • Purchase order message (ORDERS)
  • Purchase order response message (ORDRSP)
  • Delivery schedule message (DELFOR)
  • Delivery just in time message (DELJIT)
  • Invoice message (INVOIC)
  • Arrival notice message (IFTMAN)
  • Instruction message (IFTMIN)
  • Price/sales catalogue message (PRICAT)
  • Inventory report message (INVRPT)
  • Sales data report message (SLSRPT)

Abbreviations above are in EDIFACT language (EDI standard).

EDI software

To enable EDI traffic between companies, both the sending and receiving parties need EDI software. This software is responsible for a number of important things:

  1. Converting data to an agreed EDI standard.
  2. The exchange of data between the trading partners, i.e. EDI communication.
  3. Providing an interface that all users can use.

EDI standards

As mentioned in the introduction, message traffic in EDI always follows a standard, so that the systems of the different companies understand each other. The most famous EDI standard is EDIFACT. This standard was developed in the 1980s as the standard for electronic data exchange. EDIFACT has remained a popular EDI standard over the years, and many of our customers still use this standard. However, time has not stood still since the 1980s. Trading partners today set high standards because they strive for a higher form of chain integration. Technology has also been far from standing still. Today there are therefore various EDI standards, such as:

  • EDIFACT, designed by the United Nations
  • XML, designed by the World Wide Web Consortium
  • EANCOM, designed by GS1
  • JSON, derived from JavaScript
  • X12, designed by ANSI

In addition, there are also various industry-specific EDI standards, such as:

  • HL7, for healthcare
  • Chain standard construction and installation (SALES), for construction and industry
  • EDINE, for energy companies
  • VDA and ODETTE for the automotive industry
  • SWIFT for banks

EDI communication networks and protocols

The EDI software also takes care of the EDI communication, i.e. the sending and receiving of the EDI messages. Because humans are not involved in EDI communication, it is of crucial importance that the EDI message traffic is secure. Therefore, the software uses secure networks and communication protocols.

Value-Added Network (VAN)

A Value-Added Network (VAN) is a secure network in which messages are protected and securely exchanged. The VAN simplifies the communication process by reducing the number of parties a company has to communicate with. In fact, the VAN acts as an “intermediary” between the various parties that want to share data with each other.

Schematic overview of a Value Added Network (VAN)

AS1, AS2

AS1 and AS2 are protocols that describe how EDI data is securely and reliably exchanged over SMTP/e-mail (AS1) and HTTP/internet (AS2).

OFTP2

OFTP2 is a secure protocol that ensures that confidential and sensitive information is exchanged quickly and reliably using SSL and encryption certificates. OFTP2 works according to partner authentication. OFTP2 is widely used mainly in the automotive industry.

SFTP

SFTP is a protocol for sending files over the internet securely (encrypted), which uses a so-called secure shell (SSH).

PEPPOL

PEPPOL is a network in which affiliated organizations send electronic invoices in a secure manner. The network uses an access point for this. Registration in the network takes place on the basis of unique ID numbers such as Chamber of Commerce, VAT, IBAN and OIN numbers (government institutions).

EDI partner OMS International

OMS International is a reliable EDI partner because we have years of knowledge and experience in electronic B2B/B2G communication and data integration. We actively work with our customers and offer suitable, scalable and future-proof EDI solutions.

Behind the solutions of OMS International is an advanced development team. In this way we guarantee that the solutions are constantly up-to-date and grow with the developments in the market and your company. Together with you, we ensure that your EDI solution works optimally – now and in the future.

Let’s talk!

Would you like to know more about EDI? Would you like to know which EDI solution would be best for your organization? Are you curious about the ways in which OMS International could advise and support you? Our EDI experts are happy to help.

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Contact
  • OMS International
  • info@omsinternational.com
  • +31 (0) 345 638 600