EDI technical terms explained
Don’t get lost in discussion with an EDI specialist! Here is the list of some technical terms, which you may need.
General terms
EDI (Electronic Document Interchange): it is a way for computer systems from different companies to talk directly to each other, in their own language, sharing business information. EDI eliminates the need for lots of “paperwork” and significantly accelerates business. See more: EDI Essentials: the Minimum You Need to Know
ERP System (Enterprise Resource Planning) is a software for managing main business activity of a company. In the context of EDI it may mean any internal IT system which is a source or destination of the business data exchanged with business partners.
EDI Service Provider is a company that establishes an EDI link and offers EDI document translation services, most often as a cloud-based service. Alternatively, organizations have the option to maintain in-house EDI links and translation software with internal maintenance.
Translator is a software that facilitates the conversion of electronic documents’ formats. It accomplishes this by mapping the fields, or pieces of information, from the input document to the output document.
Web-EDI - cloud solution proposed by some EDI providers, which allows to use EDI without any changes to the existing IT system. Drawback: all data to be sent or received by EDI needs to be re-entered manually, which eliminates almost all advantages of EDI. This solution is best adapted to business with small amount of documents (less than 20 per month), who need to comply with their commercial partner’s requirements.
Data Transfer Related Terms
AS2 (Applicability Statement 2) is a specialized protocol for secure transmission of digitally signed business documents over the Internet. Its primary advantage over other protocols is the use of MDN (Message Disposition Notification) as proof of document delivery. See more: How to Implement AS2 - Best Practices
MDN (Message Disposition Notification) is a confirmation of document delivery and is an integral part of the AS2 protocol. A positive MDN indicates that the document has been successfully received and decrypted, while a negative MDN or a missing MDN signals an issue. This mechanism enables a clear separation of responsibilities when transferring electronic documents between commercial partners.
X.400 is one of the data transfer protocols used for transmitting business documents and is typically offered by major telecom companies. It often involves a paid subscription and a fee per transmitted document. While some companies still use X.400, it has largely been replaced by the more cost-effective AS2 protocol.
VAN (Value-Added Network) is a rather old term used to describe a private data transmission network, established between trading partners by a specialized service provider. This term was created before the popularization of the Internet, but it is still used in North America, often used with the same meaning as EDI Service Provider.
FTP/SFTP/FTPS are a set of popular protocols for sending files over the Internet, which do not include a formal proof of delivery. It’s important to note that FTP (without ‘S’) is considered insecure and should not be used for transferring confidential documents.
API (Application Programming Interface) is a contemporary method for direct data transmission between a pair of computer systems connected to the Internet. The data format is determined by the party that has developed the interface.
Electronic Documents Standards
EDI Message, refers to a business document which exists in a digital format rather than a physical paper format and is sent between business partners to describe a specific business event, like purchase order or goods been sent in a truck. EDI messages are constructed based on one of the existing standards (see below).
XML, short for Extensible Markup Language, is a universal language allowing to encode any data in text files readable both by humans and machines, by tagging each piece of information in a structured, multi-level format. In order to exchange business data in XML format, both parties needs to agree on the exact data schema. Newer EDI standards (i.e. CEFACT, UBL) are XML documents.
UN/EDIFACT (United Nations Electronic Data Interchange For Administration, Commerce, and Transport) is an international standard for structured electronic documents, encompassing a general syntax and format for over 200 types of business documents. The names of EDIFACT documents are always 6 capital characters. EDIFACT still seems to be the most popular EDI format used by the retail and distribution industry in Europe. Most common documents are:
- Articles and prices catalogue (PRICAT),
- Purchase Order (ORDERS),
- Purchase Order Confirmation (ORDRSP),
- Purchase Order Change (ORDCHG),
- Despatch Advise (DESADV),
- Invoice (INVOIC),
- Remittance Advice - payment details (REMADV).
UN/CEFACT (United Nations Centre for Trade Facilitation) is a body established by United Nations in charge of simplification of international trade and electronic business (in fact the older EDIFACT standard is maintained by CEFACT). The term CEFACT is also used in relation to the catalogue of over 100 CEFACT XML schemas. It includes a group of electronic documents for supply chain called “Cross-Industry family of deliverables”, being a set of universal documents and codes which may be used by any industry. Each document is identified by its name, for example Cross Industry Invoice (CII).
X12 is an older but still actively maintained standard of Electronic Data Interchange, developed by ANSI (American National Standards Institute). X12 is mainly used in the United States, while the rest of the world rather uses EDIFACT.
OASIS UBL (Universal Business Language), is a more recent royalty-free standard of XML-based electronic business documents. It has been created by a non-profit OASIS organization. It is based on some concepts present in EDIFACT and X12, however it is a completely different standard. The popularity of UBL is increasing due to its adoption by government organizations, including the European Commission.
Coding Standards Used in EDI Documents
GS1 is a non-profit organization, mostly known for mainating standards for barcodes and related standards, mostly for retail, distribution, and healthcare industries. GS1 has local offices in almost all countries in the world. Every company using codebars on its products needs to subscribe to GS1 service.
GTIN (Global Trade Item Number) is a unique identifier for trade items, attributed by GS1. Most commonly used in Europe is GTIN-13, which is encoded in EAN-13 barcode. The GS1 Search Engine permits verification of the GTIN owner.
GLN (Global Location Number) is a unique identifier of a physical location (i.e. warehouse) or legal entity (i.e., company’s headquarters), attributed by GS1. The GS1 Search Engine permits verification of who owns a GLN or to search for a GLN by company name.
SSCC (Serial Shipping Container Code) is an 18-digit identifier of a logistics unit such as a container, pallet, or distribution package, with a prefix attributed by GS1. SSCC is created by the shipping party and printed as a GS1-128 barcode on logistics labels or encoded in a RFID tag. SSCC enables tracking of goods during storage and transportation and simplifies the reception of goods.