Learn EDI with our Basic Guide

Do you have an EDI mandate? This is the case for many small manufacturers, with just one or two retail partners. Many large retailers require their suppliers to exchange order data via an EDI connection. This commonly includes mandates for EDI orders, invoices, and Advance Shipping Notices. Whether you have an EDI mandate to comply with, or are simply curious, we have everything you need to learn EDI quickly and easily.

In this article, we cover everything you need to know about EDI…

Many people who want to learn EDI first need an EDI Definition.

So, what does EDI stand for? The EDI acronym stands for ‘Electronic Data Interchange’. EDI enables the automated exchange of digitised business documents between trading parties. Thus removing manual processing in the supply chain.

EDI supports the sharing of all documentation relating to a B2B supply chain transaction. From orders and invoices to customs declarations. It replaces the physical and non-formatted exchange of information by post, fax and email. EDI works by reformatting information in line with internationally recognised standards that can be read by different computers and systems.

There are different EDI standards depending on region, industry and use, so it’s important that your EDI uses the same protocols as your trading network.

They enable different systems to speak the same language as each other, so that the exchange of data is automated. EDI standards are based on recognised requirements for the format and make-up of EDI documents including the order of information. Four principles govern the use of letters and symbols used in EDI documents, they are: Syntax, Codes, Message designs and Identification values.

An EDI number is more commonly known as a Global Location Number (GLN).

This is a unique number that is assigned to a specific location. The GLN enables the location to be uniquely identified worldwide. GLNs can be used to identify any legal, physical and functional location. By definition, GLNs are reference keys to computer files, where information about the company or location can be found. Therefore, GLNs replace the names and addresses of locations, making them particularly useful when automating processes.

Key benefits of EDI numbers include:

Many EDI solutions can struggle to recognise and correct typos, or other message ambiguities.

AI can support EDI in this scenario by acting as a functional layer. This facilitates timely processing whilst standardising data.

Innovative SaaS providers (Software as a Service providers) help organisations leverage EDI and AI. Narrow AI technology supports EDI solutions by ‘teaching’ the system what needs to be fixed in the data. This approach also enables the same errors to be auto-corrected if they happen again.

EDI SaaS is a combination of two acronyms used to describe supply chain technology services.

Again, as mentioned above, EDI (Electronic Data Interchange) is defined as the automated exchange of order message data between trading partners, in a standardised digital format. Whereas, Saas (Software as a Service) is categorised as the use of cloud based applications that are accessed over the internet. Therefore, SaaS EDI describes the cloud-based application which provides the automated exchange of standardised business data/messages.

It is a better alternative to legacy on-premise EDI systems. SaaS EDI solutions are typically offered as managed services. This means that SaaS EDI providers do all the legwork on behalf of the organisation using the solution. Benefits of EDI SaaS solutions include: far more accessibility, lower up-front costs, greater flexibility as business needs and markets change, and more. At Transalis, we have developed scalable EDI SaaS solutions, which are hosted securely in the cloud.

Every business has a unique set of challenges that cloud-based EDI software can solve.

Therefore EDI benefits for different organisations depends on their unique circumstances and requirements. Here are the top advantages of EDI to expect summarised below:

In short, there is no single answer.

Providers operate different EDI pricing models. You will want to be reassured that your EDI choice is a cost-effective and frictionless method of exchanging business documents. Ask your provider about the pricing model and support they offer.

Ideally, you want to find a transparently-priced solution that is tailored to your needs and can generate a return on investment. In addition, be sure that the price reflects exactly the level of help you need and comes with no hidden extras or upfront fee. And you will also certainly want to avoid a Value Added Network (VAN) charging model.

To close this Learn EDI guide, here’s the most frequently asked questions summarised below: