In basic terms, Electronic Data Interchange refers to the process of businesses electronically communicating information, such as invoices and purchase orders, that used to be communicated on paper.
There are various types of EDI and a range of approaches to enabling EDI across trading communities.
In the following article, we will look at seven of the most important types of EDI and what each one means.
Photo by Marek Levak: https://www.pexels.com/photo/woman-using-silver-laptop-2265488/1. Direct EDI
Direct EDI, which actually came to prominence by Walmart, establishes an individual connection between two business partners.
With Direct EDI, the business partners gain greater control over communications.
This type of EDI is mostly used between large companies and suppliers that always handle a lot of transactions on a daily basis.
2. EDI Network Services Provider
An EDI Network Services Provider is an alternative to the Direct EDI model.
Before the days of the internet, it was known as a VAN, which stands for Value-Added Network.
Lots of businesses prefer using this model because it helps to alleviate the continual complexities of supporting the different communication protocols that business partners utilize.
3. EDI 856
EDI 856 is the most commonly used by drop shippers for connecting with suppliers. EDI 856 is often called EDI ASN (Advance Shipping Notice).
Its purpose is to inform a party about the contents of a shipment that it will be receiving. It notifies the trading partner about the contents of a shipment, so it is normally sent to a party by a supplier before a shipment is delivered to customers.
Retailers, manufacturers, and suppliers rely on EDI 856 to share things like purchase order numbers, tracking numbers, and product quantities.
Take a look at EDI 856 explained at Spark Shipping to find out more precise details about this type of EDI.
4. EDI via AS2
AS2 is an internet communications protocol for transmitting data securely over the web.
So, EDI via AS2 delivers EDI functionality with the ubiquity of internet access
5. Web EDI
Web EDI performs EDI using a standard internet browser.
Using a variety of online forms, businesses can exchange information with their partners.
Web EDI is commonly used by small and medium-sized businesses that only need to occasionally utilize the service.
6. Mobile EDI
While most businesses access EDI by a private network like the internet or a VAN to send and receive documents, Mobile EDI is starting to become more commonly adopted.
However, there are limitations to using Mobile EDI, which largely have to do with the security concerns of using mobile devices across an EDI infrastructure and restrictions concerning the mobile devices that are available.
For instance, many mobile devices have unsuitable screen sizes and quality.
Though, we can expect to see Mobile EDI become more popular over the coming years because more and more software apps are being developed that can simply be downloaded to mobile devices.
7. EDI Outsourcing
Lastly, it is worth mentioning that many businesses are now using EDI Outsourcing which enables organizations to utilize external resources to manage their EDI environment on a daily basis.
EDI Outsourcing is particularly being adopted by companies that want to integrate back-office business systems.
You may also be interested in learning how to generally outsource your business.
Summing Up
So, there you have it. While there are other kinds of EDI, the above seven types are some of the most important and commonly used.
If you are considering adopting EDI for your business, make sure you look at your needs to discern which type is best for your specific circumstances.
To recap, the seven important types of EDI you could use are:
- Direct EDI.
- EDI Network Services Provider.
- EDI 856.
- EDI via AS2.
- Web EDI.
- Mobile EDI.
- EDI Outsourcing.