When you hear the phrase “electronic data interchange,” you may picture a modern logistics system with all the latest features. In reality, EDI has been around since Colonel Edward Guilbert developed the first standardized system for exchanging business documents in the 1960s.
Since its inception, EDI has undergone countless changes. Each organization requires a system that caters to its unique needs.
So, how do these disparate EDI solutions communicate with each other? Via carefully regulated EDI standards. Below, we’ll explore common EDI standards and how they can help you optimize your profits.
What are EDI standards?
EDI standards allow businesses to exchange electronic documents, automating many aspects of logistics and supply chain management. Each EDI standard comprises predefined guidelines and formats, ensuring consistency and interoperability between different systems and trading partners.
4 principles of EDI standards
All EDI standards adhere to four principles:
- Codes: EDI standards use codes to identify common components of a business transaction, including currencies, date formats, and country names.
- Identification values: These determine how the values in an electronic document are identified.
- Message designs: These dictate how each message appears. These standardized designs eliminate the confusion of receiving multiple file formats from your trading partners.
- Syntax: This refers to the rules governing what characters are used and in what order they appear.
11 EDI document standards
EDI continues to evolve, leading to multiple EDI formats. Consult this EDI standards list to learn about the most popular standards and their use cases.
ANSI ASC X12
ANSI ASC X12 is one of the most used EDI standards. What is ANSI? It's an abbreviation for American National Standards Institute. The organization oversees the development of voluntary standards for various systems, including electronic data interchange.
Developed in 1979, ANSI X12 standards help more than 300,000 companies facilitate their transactions. Most of these companies are located in North America.
UN/EDIFACT stands for United Nations rules for Electronic Data Interchange for Administration, Commerce, and Transport. The EDIFACT standards govern electronic communication between corporations and governments. Although UN/EDIFACT is popular in Europe, countries in the Asia-Pacific region are adopting the standards to improve communication.
The UN/EDIFACT system uses six-letter references to identify different types of documents. For example, the ORDERS reference refers to purchase orders.
Companies in high-tech industries, such as semiconductor manufacturing, consumer electronics, and telecommunications, use the RosettaNet standard set. Like other EDI standards, RosettaNet relies on a shared business language to ensure everyone is on the same page. Trading partners can easily connect to each other via RosettaNet Partner Interface Processes, increasing supply chain efficiency and preventing miscommunications.
Tradacoms isn't used as often as other EDI standards, as it was one of the earliest EDI formats. When it was introduced in the early 1980s, Tradacoms was maintained by the UK Article Numbering Association. GS1 is now responsible for managing these standards. Tradacoms was typically used by companies operating in the retail sector in England, Scotland, Wales, and parts of Ireland.
VDA stands for Verband der Automobilindustrie. It was developed specifically for the German automobile industry, allowing firms like Daimler AG, Volkswagen, and Audi to exchange electronic business documents with their trading partners.
Universal Business Language (UBL)
Developed by the Organisation for the Advancement of Structured Information Standards (OASIS), the Universal Business Language is a library of business documents based on Extensible Markup Language (XML).
Files created with XML are easier to read than files created in other formats, so using the UBL EDI standards makes it easier for businesses to communicate. OASIS allows anyone to use its UBL document library for free, making this one of the most cost-effective options for firms interested in adopting EDI.
EANCOM has features of EN/EDIFACT and Tradacoms, making it one of the most versatile EDI standards. When it was first developed, EANCOM was used exclusively by firms in the retail sector. Now that GS1 maintains the standards, EANCOM is used by publishers, construction companies, healthcare organizations, and companies in various other industries.
Similar to the VDA standards, ODETTE was developed for companies in the European automobile industry. ODETTE stands for Organization for Data Exchange by Tele Transmission in Europe. Firms have used this framework to optimize their operations, ensuring the efficient flow of goods through every link in the automobile supply chain.
In North America, companies operating in the general retail industry use the Voluntary Inter-industry Commerce Standard (VICS) to facilitate communication. Suppliers, distributors, and retailers all use VICS to ensure consistency and prevent costly delays in shipping and order processing.
HIPAA stands for the Health Insurance Portability and Accountability Act, a U.S. law that protects patient privacy by restricting access to personal health information. To comply with HIPAA, healthcare organizations must comply with national standards related to electronic transactions. Hospitals, private clinics, health insurance companies, and anyone involved in delivering and billing for healthcare services must use these standards to share information.
Society of Worldwide Interbank Financial Telecommunication (SWIFT) is a set of EDI standards used in the financial sector. It’s primarily employed by banks and other financial institutions. If Wells Fargo and Chase Bank need to exchange documents, they can use the SWIFT network to send messages.
Partner with Orderful
Ready to become EDI capable? Adopting EDI standards is a great way to optimize your operations, but it takes technical expertise to set up, test, and monitor EDI integrations. The optimal approach is to partner with a managed EDI solution provider, such as Orderful.
Our cloud-based EDI platform makes it easy to communicate with trading partners, allowing businesses of all sizes to increase their profits and reduce waste. Contact us today to speak to an EDI expert about how Orderful can help your organization.