EDI compliance at WESTAFLEX

Even when paper documents are maintained in parallel with EDI exchange, e.g. printed shipping manifests, electronic exchange and the use of data from that exchange reduces the handling costs of sorting, distributing, organizing, and searching paper documents. EDI and similar technologies allows a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry or scanning. In EDI terminology "inbound" and "outbound" refer to the direction of transmission of an EDI document in relation to a particular system, not the direction of merchandise, money or other things represented by the document. For example, an EDI document that tells a warehouse to perform an outbound shipment is an inbound document in relation to the warehouse computer system. It is an outbound document in relation to the manufacturer or dealer that transmitted the document.

Increased efficiency and cost savings drive the adoption of EDI for most trading partners. But even if a company would not choose to use EDI on their own, pressures from larger trading partners (called hubs) often force smaller trading partners to use EDI. The EDI standard says which pieces of information are mandatory for a particular document, which pieces are optional and give the rules for the structure of the document. The standards are like building codes. Just as two bathrooms can be built "to code" but look completely different, two EDI documents can follow the same standard and contain different sets of information. For example an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer. The final step is to import the transformed file (or database) into the company's back-end ERP. Successful implementations of EDI take into account the effect externally generated information will have on their internal systems and validate the business information received.

Electronic Data Interchange (EDI) is a set of standards for structuring information to be electronically exchanged between and within businesses, organizations, government entities and other groups. The standards describe structures that emulate documents, for example purchase orders to automate purchasing. The term EDI is also used to refer to the implementation and operation of systems and processes for creating, transmitting, and receiving EDI documents. EDI documents generally contain the same information that would normally be found in a paper document used for the same organizational function. Generally speaking, EDI is considered to be a technical representation of a business conversation between two entities, either internal or external. EDI is considered to describe the rigorously standardized format of electronic documents. Organizations that send or receive documents from each other are referred to as "trading partners" in EDI terminology. The trading partners agree on the specific information to be transmitted and how it should be used. This is done in human readable specifications (also called EDI Implementation Guidelines). While the standards are analogous to building codes, the specifications are analogous to blue prints. (The specification may also be called a mapping but the term mapping is typically reserved for specific machine readable instructions given to the translation software.)

Trading partners are free to use any method for the transmission of documents. The EDI (Electronic Data Interchange) standards were designed to be independent of communication and software technologies. As more trading partners use the Internet for transmission, HVAC standards have emerged. EDI can be transmitted using any methodology agreed to by the sender and recipient. This includes a variety of technologies, including modem (asynchronous, and bisynchronous), FTP, Email, HTTP, AS1, AS2, MQ, etc. It is important to differentiate between the EDI documents and the methods for transmitting them. In the past one of the more popular methods was the usage of a bisync modem to communicate through a "Value Added Network" (VAN). Some organizations have used direct modem to modem connections, "Bulletin Board System" (BBS), and recently there has been a move towards using the some of the many Internet protocols for transmission, but most EDI is still transmitted using a VAN. In the HVAC industry, a VAN is referred to as a "Clearinghouse". In the most basic form, a VAN acts as a regional post office. They receive transactions, examine the 'From' and the 'To' information, and route the transaction to the final recipient. VAN's provide a number of additional services, e.g. retransmission of documents, provide third party audit information, and act as a gateway for different transmission methods, handling telecommunications support, etc. Because of these and other services VAN's provide, businesses frequently use a VAN even when both trading partners are using Internet-based protocols.

There are two major sets of EDI standards: the United Nations recommended UN/EDIFACT is the only international standard and is predominant outside of North America; and the U.S. standard ANSI ASC X12 (X12) is predominant in North America. These standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms. The complete X12 Document List includes all major business documents, including purchase orders (called "ORDERS" in UN/EDIFACT and an "850" in X12) and invoices (called "INVOIC" in UN/EDIFACT and an "810" in X12). Despite being relatively unheralded, in this era of technologies such as XML services, the Internet and the World Wide Web, EDI is still the data format used by the vast majority of electronic commerce transactions in the world.