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Understanding The key formats and protocols of EDI Standards

Editorial Staff

Electronic Data Interchange (EDI) is a prevalent method for exchanging business documents between trading partners. EDI is a commonly used method for exchanging business documents between multiple organizations. Electronic Data Interchange (EDI) facilitates the transmission of data-based messages, including orders, invoices, and shipping notices, for businesses. EDI can enhance business efficiency by automating paperwork processes and facilitating data exchange among trading partners.

Electronic Data Interchange (EDI) software is used to replace paper-based documents and manual processes for both outgoing and inbound documents such as purchase orders, advance ship notices, and invoices. This software utilizes specific transaction codes for transmitting information between computers in a standard format. In North America, the EDI transaction codes are based on the standards established by the American National Standards Institute (ANSI) X-12. European companies utilize an alternate EDI protocol known as EDIFACT.

It assists businesses and trading partners to accomplish more tasks and speed up the time frames for logistics and reduce manual errors by automating business-to business (B2B) communication. EDI consulting services can help many businesses who manufacture, transport or purchase goods or services, from manufacturers and retailers to logistics companies as well as airlines, healthcare providers, insurance companies and more.

EDI service providers have a long history of use since the 1960s, and have evolved to offer new services including supply chain automation, digital transformation, and integration into business process automation and workflow.

These are the five most frequently utilized EDI standards for file formats.

1. UN/EDIFACT is a widely used international B2B messaging standard, standing for United Nations rules for Electronic Data Interchange for Administration, Commerce and Transport, with applications in various industries.

Due to the widespread use of EDIFACT, various industries have created subsets of the primary standard to facilitate the automated processing of industry-specific information. The retail industry, for instance, uses EANCOM as one of the most popular subsets.

2. TRADACOMS is a popular standard, although not as widely used as EDIFACT. It was published before being adopted as the UN standard and was specifically developed for UK domestic commerce, especially in the retail sector. The hierarchy of TRADACOMS is made up of 26 messages and each message has a six-letter reference, just like EDIFACT.

TRADACOMS employs various message formats to communicate with its trading partners. A purchase order is made up of an order Header (ORDHDR), multiple orders (ORDERS), and an Order Trailer (ORDTLR), with the messages for each order potentially repeating between ORDHDR and ORDTLR.

3. ANSI ASC X12, or American National Standards Accredited Standards Committee X12, was created in 1979 to aid in achieving standardization of EDI service documents across North America. It has since become the preferred standard for over half a million organizations globally.

The X12 EDI service standard organization has a more extensive collection of transactions than other organizations. It utilizes a three-digit X12 number system to identify over 300 standards, as opposed to the six-letter code system utilized by TRADACOMS and EDIFACT.

The Verband der Deutsche Automobilindustrie, also known as VDA, was established in 1901 by German automotive companies.

The EDI file format was created by VDA in 1977, making their standards older than EDIFACT.

4. VDA message formats have a unique identification number consisting of four digits, similar to X12 standards. The VDA EDI format 4905 is specifically used for forecasting delivery.

VDA standards were initially created without considering their widespread usage, which led to most of them being released in German. This can pose challenges for understanding, particularly in relation to German business terminology. Additionally, as not all components have a naming convention, a basic knowledge of German is necessary to differentiate between them.

5. UBL is a set of standardized business documents that employ XML. The ownership of it belongs to OASIS and it is available for all businesses to use without charge. UBL distinguishes itself from other EDI file formats by utilizing the XML structure, which enhances readability. XML files tend to be larger than other EDI formats, but this is not an issue with the widespread availability of broadband Internet.

What’s EDI protocol?

An EDI service protocol is utilized by communication software/application to define and describe the exchange of data between computers.

The chosen protocol affects the encryption level of messages and hardware and software requirements. It also determines the ease of message exchange, requiring both parties’ machines to be connected simultaneously.

EDI solutions can be implemented through various electronic communication methods capable of transmitting relevant information, although the current trend in EDI consulting is conducting it through the internet.

Protocols of EDI Standards

1. The HTTP protocol was introduced in 1991:

HTTP is a straightforward method for transferring files between individuals. It only requires the use of a web browser and no additional installations are necessary.

The simplicity of HTTP comes with a drawback, which is its insufficient security measures.

2. AS2 – AS3 – AS4:

AS is an acronym in Applicability Statement. The letter that is accompanied by these letters represents an application of communication protocol that was developed through the IETF (Internet Engineering Task Force).

This protocol was developed in 2002, and is created to ensure the safe transmission of messages via the Internet via HTTP which includes encryption and digital signature to guarantee security and authenticity of data exchanged and received.

AS2, AS3 or AS4 communications require that messages be sent through an AS server, and then received by a different AS server. The receiving server must acknowledge receipt of the documents from a specific source. Both servers work on the foundation of specific rules which include the sending of message and acceptance in order to facilitate the transfer of a document. The servers also need confirmation the final acceptance after the Electronic Data Interchange document is received by the server that is intended for it.

3. VANs are networks created for the purpose of exchanging EDI service documents in a private setting. Value-added networks create an enclosed environment in which partners can connect their EDI solutions to facilitate document exchange.

This kind of network provides the highest levels of security as well as evidence of processing and delivery of EDI messages at the point of delivery. Since these are private environments so as to avoid the exclusion of a particular amount of strategic partners who aren’t connected to a particular network, the top networks around the world have interconnection agreements. This allows for exchange EDI documents among partners of diverse VANs.

EDICOMNet The VAN that was developed by EDICOM is a private communication service that provides connectivity between users who are connected and with other external partners thanks to interconnection agreements and multi protocol capabilities.

4. The OFTP protocol for communication was created in the late 80s by the ODETTE automotive industry association. It is currently one of the most popular protocols used in the business world to exchange EDI service documents and other large, sensitive files like engineering specifications in CAD/CAM formats.

The OFTP2 protocol was introduced in 2010, offering improved flexibility and durability to the communication system and notable advantages including:

  • The data compression capacity of HTML1 has increased.
  • Data compression refers to the method of diminishing the volume of data necessary for information storage or transmission. Compression techniques are commonly employed in web development to minimize the amount of data required for efficient page loading and rendering. HTML1More is a markup language that employs more advanced data compression capabilities than traditional HTML5, and is open-source.
  • Security in communication management via SSL/TLS identification as well as encryption, signatures, etc.
  • Dealing with files larger than 500 GB requires effective management.
  • Managing large file sizes, especially those greater than 500 GB, can be an extremely challenging task. It is important to ensure that the data is stored securely and can be accessed quickly and easily. To do this, one must have a robust storage system in place that can handle the massive amounts of data.

OFTP communications require that documents be transmitted and received by servers that utilize this same protocol. It is important to configure the servers, maintain them and continuously monitor the servers in order to manage the many parameters that are involved in the transmission of these kinds of messages and documents.

5. REST API: An API, also known as Application Programme Interface, is an amalgamation of rules and processes that determines how two ends are able to communicate and exchange information.

API enable businesses to exchange data seamlessly, providing users with access to critical B2B data without the need for the other party’s involvement or availability during transmission.

Since there is no restrictions or standards on the way API are created and utilized API used for B2B data exchange could be difficult as more business partners you have because you must create a new system for every connection. Contrary to AS2 or OFTP2 which are based on standardized standards, API may be utilized in a variety of ways.