| Definitions |
| What is EDI? |
| EDI stands for Electronic Data Interchange, and is strictly defined as “the exchange of business data from one organisation’s computer application to the computer application of a trading partner”. The messages exchanged are typically Orders, Acknowledgements and Invoices, although there are hundreds of available messages. |
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| Why EDI? |
| EDI comes into its own when repetitive manual tasks are required to support a business relationship; EDI simply eradicates them by automating the process and removing the paperwork element. |
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| EDI increases accuracy by eliminating the re-keying of data, and the quality of data is enhanced by agreeing product codes, prices and location codes in advance. EDI also helps cement customer/supplier partnerships by reducing the supply chain costs associated with manual processing. |
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| Where is EDI at today? |
| EDI began in earnest over 20 years ago and is now used by 20,000 UK companies. It is most commonly used by the UK retail sector, typically in Grocery, Building & DIY, Publishing, Stationery and Department Store sectors. |
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| EDI can also be found supporting business supply chains in a vast spectrum of other industries ranging from Electronics to Motor Manufacturers, and Pharmaceutical Supply to the Inland Revenue. |
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| There are no barriers to the use of EDI in any industry. The expansion has been driven by major clients insisting that suppliers adopt EDI to reduce overhead costs, thereby helping to enhance the on-going competitiveness of their business. |
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| Widely used across Europe, North America and the rest of the world EDI is actively encouraged by European Governments using United Nation’s EDI standards to facilitate cross border trading. |
| Siemens has been using EDI to send Purchase Orders to our distribution centres for more than 15 years and receiving orders from Customers for over four years. |
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| How are EDI messages exchanged? |
| EDI normally involves the use of secure private networks known as VANs (Value Added Networks), which securely and reliably deliver information between trading partners; VAN providers include global companies such as BT, GNS and IBM. Siemens uses GNS in trading electronically with some EDI Customers. |
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| The Internet is playing an increasing role in trading electronically. The Siemens Enterprise Server also uses FTP to transfer orders, acknowledgements and invoices via the Internet. |
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| What message standards are used? |
| Standards can be imagined like a spreadsheet where every ‘cell’ or element defines a part of the message, say the part number or quantity of an item on an Order. Both ends of the relationship need to agree the standard and implement it precisely. |
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| Siemens is able to accept any standard but prefer EDIFACT. A number of Customers use TRADACOMS or a ‘Flat File’ (text) |
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