Electronic Data Interchange (EDI) has been around for much longer than you might think — decades before the dawn of the internet, in fact.
EDI dates back to the 1960s when it was first introduced to help companies in the U.S. transportation sector — railroads, specifically — share information with each other more efficiently. And it continues to do the same for countless businesses around the world, nearly half a century later.
In this guide, we'll explore the history of EDI, how it’s evolved over the years, and how EDI technology continues to keep supply chains running smoothly across the globe today.
When Was EDI Invented? Edward A. Guilbert and EDI Development
Before EDI, businesses depended on paper records, phone calls, and telex messages to keep shipments running smoothly, which were often slow and prone to mistakes. But as industries like retail and automotive grew, they needed a better way to stay on top of the massive amounts of transactions happening every day.
A U.S. Army veteran by the name of Edward A. Guilbert offered a solution: EDI.
Guilbert’s military background in logistics, particularly his role in coordinating the Berlin Airlift in the 1940s, gave him valuable experience managing large and complex supply chains. It led Guilbert — the "father of EDI" — to create a standardized system for exchanging documents, like purchase orders, invoices, and shipment notices, over telegraph and telephone lines. With that, EDI was born.
In the late-’60s, Guilbert helped establish the Transportation Data Coordinating Committee (TDCC), which created the first set of EDI standards. These early standards gave businesses across industries a shared way to exchange information electronically, making it easier for companies to adopt the technology. This laid the foundation for the ANSI X12 and EDIFACT standards, which are still in use today.
EDI Adoption and Growth
Before EDI, versions of proprietary systems were the norm for businesses to exchange information with each other. But each company had its own format, making communication slower and collaboration between industries more difficult.
Over time, businesses realized they needed a faster, more cost-effective way to share data: EDI. After the TDCC was founded in 1968, the committee introduced its first standard in 1975 — the Rail Transportation Industry Application. It included standardized formats for transaction messages like freight waybills, railcar movements, shipment status updates, and billing records, making it easier for railroads and their partners to exchange logistics and financial data quickly and accurately. By the 1970s, big-name brands like Sears and General Motors were also on board, setting the stage for wider adoption in the years to come.
Now, industries like retail rely heavily on EDI to streamline operations, with major players like Costco and Home Depot requiring their partners — each and every one of their tens of thousands of suppliers — to comply with EDI standards.
EDI Development Over the Years: How It Evolved
EDI has come a long way since the 1960s. As global commerce expanded, so did the need for more standardized, efficient ways to exchange business data. Consequently, EDI standards have evolved to keep up with changing industries, new technologies, and the growing need for seamless international trade.
ANSI ASC X12
In 1979, the Accredited Standards Committee (ASC X12) developed this standard to create a consistent format for EDI transactions. It replaced the earlier TDCC standard and quickly became the foundation for EDI in industries like retail, healthcare, and manufacturing.
Today, ANSI X12 includes nearly 280 transaction sets, covering everything from placing orders and processing shipments to invoicing, payments, and inventory management. By using a shared format, businesses across different sectors can communicate smoothly without needing to translate data into different systems.
UN/EDIFACT
As EDI adoption spread beyond North America, the United Nations introduced the EDIFACT standard in 1988 to provide a globally recognized format for document exchange. Unlike ANSI X12, which is primarily used in the U.S., EDIFACT is the go-to EDI standard in Europe, Asia, and other international markets.
EDIFACT helped bridge the gap between companies operating in different regions by offering a unified format that worked across industries and borders. Today, it remains a key standard for businesses that trade internationally.
Early Communication Methods
In the early days, EDI relied on telephone and telegraph lines to transmit data, which were later replaced by modems. While revolutionary at the time, modem-based communication was slow, expensive, and required constant monitoring to make sure files were sent and received correctly.
As technology improved, so did EDI transmission methods. Companies moved away from modems and began using internet-based protocols like AS2, FTPS, HTTP, and REST APIs. These modern systems automated data exchange, reduced errors, and made EDI more affordable — not just for large enterprises but also for startups and small businesses.
Today, EDI is faster, more accessible, and more secure than ever, proving that even decades after its invention, it’s still evolving to meet the needs of modern commerce.
The Future of EDI: Trends and Predictions
Today, EDI continues to evolve, thanks to artificial intelligence (AI) and machine learning (ML). Both AI and ML are changing how businesses exchange data, making transactions faster, reducing errors, and taking a lot of the manual work out of the process.
How AI and ML are Transforming EDI
Currently, most businesses still rely on manual troubleshooting when EDI errors pop up. AI is changing that. Instead of waiting for someone to catch a mistake, AI tools can spot problems instantly and suggest fixes — no more unnecessary delays or back-and-forth emails.
ML takes it a step further. By analyzing patterns in supply chain data, it helps businesses predict demand, manage inventory more efficiently, and make smarter decisions before problems arise. That means fewer stockouts, less waste, and better planning.
Orderful’s Pioneering Approach
Some EDI providers are already putting AI to work, like Orderful's AI-powered Rule Suggestion feature, which catches errors in EDI messages and suggests how to fix them instantly.
For example, the EDI term "CS" refers to “cases,” as in cases of goods or packaged units. But if a sender mistakenly uses "CA," it could cause a rejected transaction or a processing error. EDI systems follow strict validation rules, so if "CA" isn’t recognized, the order might not go through. Even if it does, the recipient’s system could misinterpret "CA" for cartons instead of cases, which might lead to incorrect shipments, invoicing errors, or inventory mismatches. Minor mistakes like these can cause major disruptions, and correcting them manually is often time-consuming.
Instead of a drawn-out back-and-forth between the sender and receiver to identify and fix the issue, Orderful's AI can instantly catch the discrepancy, suggest the correct term, and apply it right away before it causes delays.
Also, EDI traditionally requiredone-to-one mapping, meaning businesses had to set up a unique connection for each trading partner. That's a thing of the past with Orderful, which uses AI to automatically analyze transaction requirements and automatically suggest the right mapping and transformation rules. Rather than manually configuring each partner’s setup or constantly updating custom integrations, businesses can onboard new partners and get to work right away.
Leading the Way in EDI Transformation
The next era of EDI isn’t just about efficiency — it’s also about adaptability. What started as a way to digitize paperwork has become an essential tool for global trade, keeping supply chains running smoothly across industries. Now, with AI and machine learning driving the next phase of innovation, EDI is automating processes, reducing errors, and making transactions faster than ever.
Ready to discover what the future of EDI holds for your business? Connect with an EDI expert today to get started.