Electronic data interchange is a combination of best practices, standards, protocols, and technology that allows information to move freely between organizations—specifically, organizations inside a single supply chain.
FREMONT,CA: The computer-to-computer exchange of business documents and information is known as electronic data interchange. Electronic Data Interchange (EDI) is a methodology at its core. It is a combination of best practices, standards, protocols, and technology that allows information to move freely between organizations—specifically, organizations inside a single supply chain.
Today, some of the world’s largest corporations use electronic data interchange to provide benefits such as:
- Lower operating costs.
- Higher transaction security.
- Streamlined and faster communication.
- Removal of manual processes.
Different Types of EDI
Initially, the EDI process was a one-stop shop, dominated by what is now known as ‘point-to-point EDI’ or ‘Direct EDI.’ Point-to-point data interchange establishes a direct line of communication between two firms through the use of agreed-upon protocols such AS2 (Applicant Statement 2), OFTP (Odette File Transfer Protocol), or SFTP (SSH File Transfer Protocol). Unfortunately, incompatible protocols and the requirement to keep up with hundreds of suppliers who use a variety of standards continue to make integrations difficult for many businesses. EDI has changed since the internet’s inception. The following are two alternatives to direct EDI:
Electronic Data Interchange via VAN: This uses a hosted cloud to make information exchange easier. Instead of setting up and maintaining a direct link between all supply chain participants, everyone simply connects to the VAN. This makes management easier, and VAN providers can assist with a variety of protocols and standards.
WebEDI: This type of data interchange is typically used in conjunction with a VAN and is defined by EDI input forms delivered as basic HTTP sites. This makes it easier for smaller suppliers who don’t have EDI systems to work with larger companies who use the EDI standard.
Contemporary EDI solutions, on the other hand, do not adequately address global supply chain complexity and current supply chain threats. As a result, data interchange formats are on the verge of shifting once more.