The ultimate guide to Electronic Data Interchange (EDI)
Understand how EDI works and get answers to all of your pressing questions with our ultimate guide to Electronic Data Interchange.
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What is EDI (Electronic Data Interchange) and how does it work?
EDI is the automated exchange of business documents, such as orders and invoices, between trading partners over a secure network. It standardises data into formats like EDIFACT, TRADACOMS or UBL XML, so files can be sent, routed and processed without manual re-keying. Connectivity such as AS2, VAN, SFTP or FTP, plus identifiers like GLN, determine how messages reach the right partner.
Understanding how EDI works (Electronic Data Interchange) is key to choosing the right system for your business. Whether you're just starting or need a more holistic solution.
As your business scales, digital transformation and automation of processes is key to success.
This is especially true for businesses supplying large retailers that regularly require EDI connectivity. It’s therefore crucial to understand the EDI options available to you.
That’s why Transalis has put together “The Ultimate Guide to EDI”. This in-depth guide cuts through the jargon, breaks down the technical concepts, and offers clear descriptions of the different EDI setups available. We provide this essential guidance so that you can make the right decision for your business needs.
Here’s what you’ll find inside:
- EDI Basics: We kick things off with the essentials, what EDI is, how EDI works, and why EDI is central to many business transactions.
- Comparing EDI Solutions: Then, we explore the different EDI solutions available to help you pinpoint the perfect fit for your business goals.
- The EDI Journey: Lastly, we walk you through the implementation and onboarding process, ensuring a smooth transition, no matter what system you choose.
What do we need from you and why?
- Why supplier code and GLN are mandatory and how we use these in EDI:
Supplier code is normally mandatory by Trading Partner and so we need to store this information in our system to send it across in EDI files; GLN is used to route information automatically and ensure transactions are carried out between correct parties(GLN is critical for us, we cannot do EDI setup without a GLN),
What are the different types of connectivity:
AS2, VAN, SFTP and FTP are standard, with OFTP2(largely used by automotive companies) and X400 normally being more complex as they require more details. These interfere in project duration, as it is the first step in development phase, delay in connecting to a Trading Partner and receiving the first test Order will impact overall project duration.
- EDI messages format:
There are different types of format but the most used are EDIFACT, TRADACOMS and UBL XML; these are essentially the template of the EDI messages and it is important to understand the format required by supplier ands trading partner, so mappings are correctly implemented and file transformation is setup, if applicable.
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Frequently asked questions
- What is a GLN and why do I need one for EDI?
A GLN (Global Location Number) identifies your business or location so EDI messages route automatically to the correct trading partner. It's mandatory for most retailer trading relationships, and without one, an EDI setup cannot be completed. Your GLN works alongside your supplier code, which trading partners also require to identify you in the transactions they process.
- What are the different types of EDI connectivity?
The standard connectivity options are AS2, VAN, SFTP and FTP. OFTP2, used mainly by automotive companies, and X400 are more complex and need more setup detail. The connectivity method matters early on, since delays connecting to a trading partner and receiving the first test order affect how long the whole project takes.
- What EDI message formats are most commonly used?
The most widely used EDI message formats are EDIFACT, TRADACOMS and UBL XML. Each acts as a template for how data is structured within a message, so it's important to confirm which format your trading partner expects before mappings and file transformations are set up.
- How long does EDI implementation and onboarding take?
Timescales vary by trading partner and connectivity type, since connecting and receiving the first test order is the first step in the development phase. Simpler connectivity such as AS2, VAN, SFTP or FTP tends to move faster than OFTP2 or X400, which need more configuration detail before testing can begin.
Ready to discuss more?
Talk to our specialised team who will work with you to find the best solution to meet your business needs and future-proof your supply chain. Book a meeting, give us a call, or email us directly.
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