WHAT IS EDI?
He EDI SSL stands for Electronic Data Interchange. It refers to the exchange of documents in a standard electronic format between computers of business partners. This facilitates the sharing of documents such as orders, invoices, inventories, price catalogs, and more, between companies that have a business relationship.
The benefits offered by EDI are very important, such as reduced costs, faster processing speed, fewer errors, and better relationships with business partners.
EDI essentially replaced processes previously carried out via postal mail, fax, or email. Its advantage over options like email is that these are still handled by individuals rather than computers. Human involvement slows down document processing and introduces errors. In contrast, EDI documents can flow directly to the appropriate application on the recipient's computer, and processing can begin immediately. This eliminates significant amounts of paper and countless hours of human labor.
The most common documents exchanged via EDI are purchase orders, invoices, and shipping notices. But there are many others, such as bills of lading, customs documents, inventory documents, shipping status documents, and payment documents.
Because EDI documents must be processed by computers rather than people, a standard format must be used so that the computer can read and understand the documents. A standard format describes what each piece of information is and in what format. Without a standard format, each company would send documents using its own business-specific format, and the recipient would not understand the sender's specific format.
Currently, several EDI standards are used, including ANSI, EDIFACT, TRADACOMS, and ebXML, and for each standard there are many different versions, for example, ANSI 5010 or EDIFACT version D12, Release A. When two companies decide to exchange EDI documents, they must agree on the specific EDI version and standard.
Companies typically use an EDI translator, either as in-house software or through an EDI service provider, to translate the EDI format so that their internal applications can use the data and thus enable direct document processing.
The benefits of implementing EDI range from reducing errors due to changes in document formats, saving resources and time, simplifying operations, improving business competitiveness, and facilitating agreements with other companies. However, special attention must be paid to implementing EDI in companies across different countries, and all the necessary criteria for the proper functioning of the entire process must be clearly defined.
