Learning Electronic Data Interchange (EDI) is like learning a new language, with hundreds of terms, protocols, and standards that businesses use to share information digitally. Each represents a specific transaction or process that keeps supply chains running smoothly, from EDI 850 purchase orders to EDI 810 invoices. Without a clear understanding of this nuanced vernacular, navigating EDI systems can feel like being lost in a foreign land.
Whether processing shipping notices, managing inventory updates, or setting up new trading partner connections, doing it effectively requires knowing the basic lingo.
In this guide, we’ll explore 20+ of the most common EDI terms, complete with examples, to help you build a strong foundation in the world of EDI.
Key EDI Terms and Definitions
The world of EDI is full of specialized acronyms that represent protocols, standards, and systems that are essential for efficient data exchange. From SFTP to WINS, these acronyms define the tools and frameworks businesses rely on to streamline operations, improve communication, and ensure compliance. Here's a breakdown of common EDI acronyms and what they mean for modern industries.
Common EDI Abbreviations
ANSI ASC X12
The American National Standards Institute (ANSI) oversees voluntary standards in the United States, including those for EDI. Its Accredited Standards Committee (ASC X12) develops and maintains EDI standards and XML (eXtensible Markup Language) schemas used across industries.
Currently, ASC X12 offers a comprehensive list of over 320 standardized EDI codes, ensuring consistency and compatibility in data exchange. Two primary committees — the Accredited Standards Committee (ASC) and the Registration Standards Committee (RSC) — guide the creation and maintenance of these standards. ANSI also ensures that U.S. EDI standards align with international standards.
AS1/AS2/AS3
These protocols, known as Applicability Statements, fall under EDIINT (EDI’s abbreviation for Electronic Data Interchange Internet Integration). They were developed to ensure secure EDI message transmission and compliance with data security laws.
AS1 (Applicable Statement 1)
Created by the Internet Engineering Task Force (IETF), an open standards organization under the nonprofit Internet Society, AS1 adds a layer of security to EDI transactions. It uses two types of email technology: S/MINE (Secure/Multipurpose Internet Mail Extension) to encrypt and sign messages and SMTP (Simple Mail Transfer Protocol) to send emails reliably. Senders can also request Message Disposition Notifications (MDNs) to confirm successful delivery.
AS2 (Applicable Statement 2)
AS2 builds on AS1, offering a stronger solution for large-scale organizations such as healthcare providers, government agencies, and retail chains. Also developed by the IETF, it uses HTTP/S (Hypertext Transfer Protocol Secure) for online data transfer and wraps EDI messages in an encrypted “envelope” with S/MIME technology. Its open standard ensures secure and efficient transmission of sensitive data, making it a top choice for high-volume operations.
AS3 (Applicable Statement 3)
AS3 takes a different approach, using FTP (File Transfer Protocol) to handle MFT (Managed File Transfers) and XML documents. Like AS1 and AS2, it uses MDNs for encryption and delivery confirmation. AS3 works well for logistics firms, manufacturers, and financial institutions that use FTP scripting to exchange files securely.
DISA
The Data Interchange Standards Association (DISA) plays a central role in shaping EDI standards in the U.S., acting as the secretariat for ANSI ASC X12 and the EDIFACT board. By promoting EDI adoption and fostering collaboration across industries like retail, logistics, and manufacturing, DISA helps businesses streamline their data exchange processes.
For example, using DISA-compliant formats, a retailer can send a purchase order to a supplier quickly and accurately, avoiding miscommunication. These standards also align with global frameworks like EDIFACT, making it easier for businesses to trade internationally.
EANCOM
The European Article Number Communication (EANCOM) is a subset of the EDIFACT standard that uses the GS1 numbering system to manage product information globally. It simplifies document exchange by providing a standardized format for sharing data like purchase orders, invoices, and shipping details.
With EANCOM, trading partners can avoid miscommunication and reduce manual data entry errors, ensuring smoother, more accurate transactions while keeping costs low.
EDIFACT
Developed by the UN Economic Commission of Europe (UNECE). EDIFACT is an international standard that facilitates data exchange within supply chains. It provides syntax rules that define how alphabets, characters, and EDI numbers are structured, ensuring clarity and consistency in messages.
By standardizing the groups of segments required in each message, EDIFACT enables seamless communication across industries and borders. Today, it’s widely used for global messaging in sectors such as transportation, healthcare and retail.
GLN
A GLN (Global Location Number) is a unique identifier used to pinpoint locations worldwide. It can represent physical locations like warehouses, functional locations like departments, or legal entities such as company headquarters.
GLNs serve as reference keys for accessing files that store detailed company information. They’re particularly useful in automated processes, replacing traditional location names and addresses. This allows data to be routed accurately to its intended destination without requiring manual intervention, improving efficiency and reducing errors in supply chain operations.
HIPAA
HIPAA is a U.S. law designed to protect the privacy and security of individual medical records shared by healthcare providers. It establishes national standards for safeguarding sensitive health information during data exchanges, such as electronic health records (EHRs), insurance claims, and billing transactions. The law significantly influences policies, record-keeping practices, and technology used in healthcare billing, insurance, and medical facilities, ensuring compliance and safeguarding patient data.
OFTP
Developed in 1986 for the European motor industry, OFTP (ODETTE File Transfer Protocol) is a widely used protocol for exchanging transactions between automotive manufacturers and suppliers. It streamlines communication and enables efficient data sharing within the automotive supply chain.
The updated version, OFTP 2, introduces advanced security protocols for exchanging data over IP networks. Its adaptability makes it a preferred choice for trading partners, allowing suppliers to conduct transactions securely from any location.
PIP
PIP (Partner Interface Processes) outlines business processes between partners using XML-based dialogs, ensuring clear and standardized communication.
For example, PIP facilitates real-time shipment tracking between a supplier and a carrier by defining the exact information exchange needed, such as shipment location, estimated delivery time, and updates on delays. This structured communication improves visibility and coordination across supply chains.
SFTP
SFTP (Secure File Transfer Protocol) builds on FTP, using SSH (Secure Shell) to protect data during transmission. It employs AES encryption, a standard known for its robust data protection. This makes it ideal for organizations needing compliance with regulations like GDPR, which safeguards personal data in the EU, and HIPAA. SFTP is commonly used for secure file transfers in industries such as healthcare and finance.
UCS
UCS (Uniform Communication Standard) is a streamlined version of ANSI X12 tailored to specific industries. By standardizing communication protocols, UCS enhances collaboration and simplifies interactions between partners. For example, the retail sector uses UCS to automate order processing, improve supply chain coordination, and speed up delivery cycles.
WINS
Developed by the Warehousing Education and Research Council (WERC), WINS (Warehouse Information Network Standard) standardizes communication between Warehouse Control Systems (WCS) and Warehouse Management Systems (WMS). It enables businesses to share critical data, such as order status, shipments, and inventory levels, ensuring better synchronization and more efficient warehouse operations.
Core EDI Concepts
EDI relies on a range of technical concepts and processes to ensure data exchange between systems. From translation and mapping to connectivity frameworks, understanding these foundational terms is a must:
Alphanumeric Character Set
This refers to a combination of numbers, letters, and symbols used in EDI documents. It defines the type of data included in a specific element, such as codes, binary, decimal values, or dates, and guides how external systems interpret the data.
Connectivity
Connectivity refers to establishing and maintaining links between two or more points in a communication system. In EDI systems, VANs (value-added networks) are a common medium for connectivity. Standards like X.400 and OSI also provide frameworks for smooth data exchange across different systems.
EDI Translation
EDI translation converts data from one format to another so that different systems can interpret it accurately. This process ensures compatibility and error-free transmission between trading partners. For example, if a seller creates a purchase order in XML but the retailer's system requires a different format, the EDI translator converts the data into a standardized format.
Data Element
A data element is the smallest unit of information within an EDI document, representing specific details like a product name, cost, or quantity. These elements, separated by special characters, form the building blocks of EDI standards and are essential for clear communication between systems.
Mapping
Mapping transforms data from one EDI format to another, ensuring the receiving system can interpret it correctly. This process may involve reformatting codes, converting data, or restructuring files for compatibility.
Common
In addition to the foundational terms and concepts we've covered, businesses use various Electronic Data Interchange transaction codes to streamline their operations. Here are a few of the most common:
EDI 850 (Purchase Order)
Manufacturers send this document to a supplier to request goods or services. It formally initiates the ordering process and provides a record for each transaction. By using EDI 850, businesses accelerate the ordering process and reduce errors, such as receiving incorrect items.
EDI 862 (Shipping Schedule)
Buyers send this document to suppliers to outline specific shipping requirements, including item types, quantities, and delivery schedules. Particularly useful in just-in-time (JIT) environments, EDI 862 ensures precise timing and allows for immediate updates based on changing forecasts.
IFTSTA (Transport Status Message)
The International Multimodal Status Report Message communicates the status of goods in transit. It provides updates on shipping progress, reports any changes, and alerts businesses to unexpected events during transportation, ensuring supply chain visibility.
ORDERS (Purchase Order Message)
Based on the EDIFACT standard, this electronic purchase order is sent by a customer to a supplier to request goods. It includes important details such as payment methods, currency, delivery dates, shipping instructions, and transport modes.
EDI Concepts and Codes Made Easy
EDI standards can transform how your business communicates and exchanges information, reducing costs, boosting productivity, and streamlining operations. Success starts with understanding the language of EDI, from concepts to codes — a task that might seem daunting. But Orderful is here to help. Ready to simplify your trading processes? Connect with an Orderful expert today.