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One of the methods available to shippers and receivers which has taken on a
new importance in this time of heightened security concerns, is a well
established method of processing the data of commerce « Electronic Data
Interchange (EDI). The Uniform Code Council, Inc. (UCC) is the control of
methods, procedures and educational resources for all users of EDI, on a
global basis.

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Electronic commerce is the communication of business information through
the sending and receiving of electronic messages between trading
partners. Various types of electronic exchanges fall within this definition of
electronic commerce. One form of electronic commerce is Electronic Data
Interchange (EDI) which is the computer-to-computer exchange of business
documents between companies, using a public standard format. EDI is a vital
tool available to every business which increases efficiency and productivity,
and replaces the traditional processes of preparing data in paper form and
sending it by mail or by facsimile.

The use of EDI is not limited by differences in computer or communications

equipment among trading companies. It bridges the previous information gap
that existed between companies with different computer systems.

EDI is also independent of users' internal computerized application systems,

since it interfaces with those systems rather than being integrated into
them. However, the degree of effectiveness of the EDI operation itself, as
well as the internal management information available from its use, will
certainly be greater if application systems are up-to-date and efficient.

EDI is based on the use of message standards, ensuring that all participants
use a common language. A message standard consists of uniform formats for
business documents, which have been adopted for electronic transmission
purposes. It also includes security and control elements and other rules and
conventions relating to the use of transaction sets that all users agree to
follow.

EDI transmission typically involves the following process. The sender uses
internal computer files to assemble the data needed for the transaction. This
data file then becomes input to a software module that generates the
transaction into the EDI standard format. The resulting data file is then
transmitted to the receiver. At the receiving end, this data file is input to a
software module that translates the data from an EDI format into a file that can
be entered into the receiver's computer application systems.

The above process includes a number of control and security

procedures. Data security is maintained through the use of user identification
numbers and passwords. EDI generation/translation software that is available
from commercial suppliers typically includes extensive data editing and error-
checking routines. This ensures that the data is valid at the time of
transmission, and that it is also valid when it is received. EDI standards also
allow the receiver to acknowledge successful receipt of the transmission by
sending an acknowledgment message back to the sender. EDI, then, is at
least as secure and accurate as your present method of exchanging paper
documents.

Through electronic commerce, business information can be communicated

through standard electronic messages to your trading partners. With your
accurate electronic messages in their computers and your bar codes printed
on your products and shipments, your trading partners are able to directly
connect your products and shipments to information about them as they travel
through the supply chain.

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The benefits available by using EDI are being realized by a large number of
companies, many of which transmit a substantial percentage of their
transaction volume via EDI. For companies using I/C EDI, UCS or VICS EDI
on a volume basis, the realization of available benefits can result in a definite
competitive advantage.

Users report benefits in the following major areas.

  
   

 
EDI can provide a direct reduction in the ordering/shipping time cycle. This
benefits both customer and supplier.
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In addition to the benefits cited above relating to warehouse operations, the
following benefits are also being realized in this traditionally high-cost area:








 


 


The automated procedures associated with EDI result in a reduction in
transaction errors and resulting corrective action, including the following:



 

 



One of the major goals in creating EDI was to reduce the great volume of
business paperwork and many of the clerical tasks involved in handling the
processing of paper documents. Many users have realized substantial
productivity improvements and/or direct cost savings in their office operations
by reducing or eliminating the time required for the following tasks.

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