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E-Commerce ©David Whiteley/McGraw-Hill, 2000 1 e c o m m e r c e electronic commerce strategy technologies and applications Chapter 9: EDI – the nuts and bolts
E-Commerce ©David Whiteley/McGraw-Hill, 2000 1
e c o m m e r c e
electronic commerce
strategy
technologies and
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Chapter 9: EDI – the nuts and bolts
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EDI standards
Three customers Four suppliers
Twelve formats or one standard
Customer Supplier
Best Bread
Freshest Fruit
Mighty Meat
Very Veg
Super Food
Save on Food
Sava Store
The need for a Common Format
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EDI standards The need for a common format …
… EDI provides a standard for data interchange that is:
Ready formulated; Comprehensive; Independent of hardware and software; Independent of special interest.
EDI standards provide a common language for the interchange of standard transactions.
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Evolution of EDI standards Three stages:
Early applications/common formats
Sector and national EDI standards
The international EDI standard
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Early applications/common formats
Developed by organisations that had to process data from a large number of customer organisations.
Standard set by data recipients and the customers conformed to it.
Examples: BACS:
System of electronic payments (from user organisations). LACES:
Freight Clearance System (at LHR). World Meteorological Office (WMO) System:
System for exchange of weather information and weather reports.
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Sector and national EDI standards
Application independent interchange standards, formulated by industry sector and / or national standards bodies.
Examples: ODETTE:
An EDI format developed for, and widely used in, the European motor industry.
TRADACOMS:A UK EDI standard for general trade developed by the ANA (Article Numbering Association).
ANSI X12:Developed as an American national standard by ANSI with the aim of replacing the various sector standards.
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The international EDI standard To meet the requirements of international and cross
sector trade …
… EDIFACT was developed, under the auspices of the United Nations (UN), as a universal standard for commercial EDI.
EDIFACT: Electronic Data Interchange for Administration,
Commerce and Transport Started in Europe in mid 1980s Accepted by US (ANSI) to supersede X12 Promoted as the world EDI standard
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The EDIFACT standardEDIFACT interchange structure:
Each document (order, invoice, etc.) is a Message.
Several messages are sent as an Interchange.
Messages are made up of Data Segments, eg. Order Date or Buyers Name and Address.
Data segment consists of a Tag and Data Items:
The tag identifies the data segment.
Data items are codes, values and qualifiers.
See next slide for diagram.
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The EDIFACT standard
Data Element
Data Element
Data Element
Interchange
Data Segment
Data Segment
Data Segment
Message Header
Message Trailer
Message
Message
Message
I’change Header
I’change Trailer
EDIFACT interchange structure (diagram):
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The EDIFACT standard Example EDIFACT interchange:
UNB+UNOA:1+6464:xx+1141:xx+ Interchange Header BEN0273'UNH+000001+ORDERS:2:932:UN' Message 1 HeaderBGM+220+AC6464' •DTM+4:20000315:102' •NAD+BY+6464326::91' •NAD+SU+1149646::91' •UNS+D' •LIN+1++PT-1073-R:VP' •QTY+21:1600' •LIN+2++PT-1073-S:VP' •QTY+21:1200' •UNT+13+000001' TrailerUNH Message 2. . .. . .UNTUNZ+1+BEN0273' Trailer
Data segments
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The EDIFACT standardInterchange header:
UNB Interchange header
UNB+UNOA:1+6464:xx+1141:xx+BEN0273
Control Agency UNOA i.e. UN Level A
Version 2Sender Code 6464Code Qualifier
Recipient Code 1141149Code Qualifier
Date of Transmission 20000305Time of Transmission 1233Control Reference BEN0273
•
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The EDIFACT standardOrder message:
UNH Message Header
UNH+000001+ORDERS:2:911:UN'
Message Number 000001Message Type ORDERSVersion 2Release 932Control Agency UN
BGM Beginning of Message
BGM+220+AC6464'Message Name Code 220 i.e. order
Document Number AC6464 i.e. order number
•
•
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The EDIFACT standardOrder message:
DTM Date/Time/Period
DTM+4:20000305:102'
Qualifier 4 i.e. order date
Date 20000305Format qualifier 102 i.e. century date
NAD Name and address
NAD+BY+6464326::91'NAD+SU+1149646::91'Party qualifier BY i.e. buyer
SU i.e. supplier
Address code 6464326 and 1149646Code list agency 91 i.e. user defined
•
•
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The EDIFACT standardOrder message:
UNS Section control
UNS+D'
Section identification D i.e. detail segment
•
• Separates order header from order lines
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The EDIFACT standardOrder message:
LIN Line item
LIN+1++PT-1073-R:VP'LIN+2++PT-1073-S:VP'Line item number 1 and 2Item number PT-1073-R and PT-1073-SItem line number VP i.e. vendor part number
QTY Quantity
QTY+21:1600'QTY+21:1200'Quantity qualifier 21 i.e. ordered quantity
Quantity 1600 and 1200
•
•
• Line item and quantities in pairs
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The EDIFACT standardOrder message:
UNT Message trailer
UNT+11+000001'
Count control 11 i.e. eleven segments
Message number 000001
•
• Message number matches message header
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The EDIFACT standardInterchange trailer:
UNZ Interchange trailer
UNZ+1+BEN0273
Control count 1 i.e. one message
Control reference BEN0273
•
• Control reference matches interchange header
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The EDIFACT standard
The Order Decoded:
The order identification is: Order Number AC6464 Order Date 15.03.2000
From Pens and Things: Customer Address Code: 6464326
To Packaging Solutions: Supplier Address Code 1149646
For ‘Executive Elite’ gift cases in red and silver:
Qty Product Line 1 (Red Cases) 1,600 PT-1073-R Line 1 (Silver Cases) 1,200 PT-1073-S
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Coding standards Codes:
Usable as Keys Facilitate sorting Cut down on transmission Save on storage
For EDI (and data processing), keys are to be used in preference to text data/descriptions
Codes must be recognised and accepted by all parties to a trading exchange.
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Coding standardsEAN/UPC codes Standard codes for grocery and general retail:
Coded as Bar Codes on products Used in order processing / stock control Used in EDI messages.
EAN European Article Number13 digit – 2 digit country code
UPC Universal Product Code (American)12 digit – 1 digit country code
Administered by National Article Numbering Associations (ANA)
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Coding standards
Code: ccmmmmmxxxxxC
cc Country e.g.: - UK = 50, - Netherlands = 67
mmmmm manufacturer prefix no.xxxxx item referenceC check digit
Examples:Baked beans, 420g tin: 50 00157 00171 9 Cream of tomato soup, 300g tin: 50 00157 00207 5 Baked beans, 250g tin: 50 00157 00023 1
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Coding standardsEAN code – checkdigit calculation
Code: 500015700171
5 x 1 = 50 x 3 = 00 x 1 = 00 x 3 = 01 x 1 = 15 x 3 = 157 x 1 = 70 x 3 = 00 x 1 = 01 x 3 = 37 x 1 = 71 x 3 = 3
Sum = 41Checkdigit = 50 - 41 = 9EAN code = 5000157001719
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Coding standards EAN code – used in EDI
LIN+1++5000157001719:EN'
EAN codes can also be used for address point codes, eg:
The delivery point:e.g. the goods are sent to a warehouse
The invoice point:e.g. the invoice is sent to head office.
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EDI communicationsEDI communications can be: A magnetic tape or diskette posted or despatched
by courier.
A direct data communications link.
A value added data service (VADS),also known as a value added network (VAN).
The Internet.
The VADS has tended to be the preferred option (and the Internet, in this context, is another VADS)
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EDI VADS Postboxes and mailboxes
(Post and Forward Network)
The postbox:where outgoing messages are placed.
The mailboxwhere incoming messages can be picked up.
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EDI VADS - example
Steps 1 and 2 Sava Store establish a link with the VADS Sava Store send an EDI Interchange
Customer Supplier VADS
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
Best Bread
Freshest Fruit
Mighty Meat
Very Veg
Super Food
Save on Food
Sava Store
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EDI VADS - example
Steps 3 Sava Store establish a link with the VADS Sava Store send an EDI Interchange
Customer Supplier VADS
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
Best Bread
Freshest Fruit
Mighty Meat
Very Veg
Super Food
Save on Food
Sava Store
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EDI VADS - example
Steps 1 and 2 Best Bread establish a link with the VADS Best Bread retrieves its orders
Customer Supplier VADS
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
Best Bread
Freshest Fruit
Mighty Meat
Very Veg
Super Food
Save on Food
Sava Store
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EDI VADS - example
The overall VADS network
Customer Supplier VADS
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
postbox mailbox
Best Bread
Freshest Fruit
Mighty Meat
Very Veg
Super Food
Save on Food
Sava Store
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EDI VADS
Time Independence Sending and receipt are asynchronous. Say:
Sava Store transmits at the end of its overnight processing run.
Best Bread pick up their orders next morning.
Protocol Independence Each user can use its own protocol Say:
Sava Store might have a fixed link using X400. Best Bread could use a dial up link.
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EDI VADS
Further VADS facilities: Trading Community: Inter-network Connections: International Connections: Privacy, Security and Reliability: Message Storage and Logging: Message Validation: Local Access: Charges: Software and Consultancy:
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EDI implementation
EDI software
Pens and Things
Production Control System
EDI Software
Packaging Solutions
Order Processing
System
EDI Software VADS
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EDI implementationEDI software – basic functions: Coding transactions into the EDI Standard. Interfacing with the VADS.
EDI software – additional functions: Trading partner database. Support of multiple EDI Standards. Facilities for formatting application data to and from the EDI
Standard. Fax or e-Mail transmission to non EDI users. Interfacing with a variety of EDI VADS. Encryption the EDI Message. Automatic acknowledgement. Message tracking and an audit trail. Direct input and printed output of EDI transactions.
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EDI implementation For full integration of the business application and the
EDI Software there needs to be an interface to transfer data from the business application to the EDI software and visa versa.
For example, to send an order The supplier record has an EDI indicator. Order for EDI suppliers are not printed; EDI orders are formatted onto a flat file; The flat file is input to the EDI software, formatted
into the required EDI standard and posted into the VADS.
The reverse process is used for incoming EDI messages – arguably they need to be validated.
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EDI implementation EDI operation:
A big difference between electronic transactions and their paper equivalents is that with electronic transactions there is no paperwork to fall back on should anything go wrong - all incoming transactions need to be secured.
Frequency of operation needs to meet the requirements of the business cycle – it can be daily, hourly or as required.
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EDI implementation EDI alternatives:
Large organisation need their own EDI set-up – small companies might:
Make use of a free-standing, PC EDI facility.
Making use of an EDI clearing house using:• Post or Fax.• Internet access.
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EDI agreements To achieve a successful, electronically controlled
supply chain, businesses need to agree:
The nature of the business that is to be done electronically.
The technical details of how it is to be undertaken.
The procedures for resolving any disputes that arise.
The appropriate way to document these details is an EDI Interchange Agreement.
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EDI agreements Legal Framework:
Most business law relates to paper based trading and how that law should apply to the less tangible form of an electronic message is not always clear.
‘For EDI to be a successful alternative to paper trading, it is essential that messages are accorded a comparable legal value as their paper equivalent when the functions effected in an electronic environment are similar to those effected in a paper environment, and where all appropriate measures have been taken to secure and store the data.’
(EU-IA)
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EDI agreements Legal (and related) aspects:
The point in its transmission and processing at which a message will be deemed to be legally binding
The timescale for processing EDI massages. The time that message will be retained. The procedure for settling any disputes. The legal jurisdiction for settling disputes.
Technical aspects: The coding systems for identifying entities. The EDI standard that is to be employed. The network that is to be used.
Model agreements are available from various organisations.
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EDI privacy and security Reliable procedures (data processing standards).
Controls in the EDI Standards
Controls in the Transmission Protocol.
Protection against Tampering (e.g. digital signature)
Privacy of Message (e.g. encryption).
Non-repudiation (e.g. message acknowledgement or ‘trusted third party’).
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EDI privacy and security
Apps System
EDI
Soft- ware
Comms
Applicati
on System
EDI Soft- ware
Comms Protocol
Checks
EDI Checks
EDI Acknowledgement (phy.)
EDI Acknowledgement (logical)
Digital Signatures Encryption
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Nuts, bolts and the tool kit
Trading Partner
Application System
EDI Software
EDI Standards
Trading Partner
Application System
EDI Software
EDI Standards VADS
EDI Interchange Agreement
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EDI – further developments
e-Procurement systems are being developed using XML formatted messages in place of traditional EDI.
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Chapter 9 – Exercise 1 Using the EDIFACT standard information on the
web page, format an invoice message for Packaging Solutions to invoice Pens and Things for the goods requested in the order shown at Figure 8.2.
(EDI Information is yet to be set up)
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Chapter 9 – Exercise 2 Draw up an Interchange Agreement to cover the
exchange of orders and invoices between Packaging Solutions and Pens and Things. You may use model agreements obtained from the web (or elsewhere) but the agreement must be fully tailored to the needs of these two organisations. Keep the agreement short; one page should suffice.
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Chapter 9 – Exercise 3 Draw up a plan for the implementation of EDI at
Pens and Things. The plan is initially for the interchange of orders with Packaging Solutions but should take account of possible future developments. The plan should be no more than two pages long; state any assumptions you have made.