Common EDI Terms

Glossary of Commonly Used EDI Terms 

EDI - an acronym for Electronic Data Interchange. This is a generic term that can be used to refer to several different meanings. One popular meaning is the electronic interchange of order information between a company and its customers, or between a company and its vendors. Another popular meaning refers to the EDI Translation Software (see definition below). A third popular meaning is the "system" consisting of the EDI Translation Software, the Value Added Network (see definition below), and the EDI server/PC that a company uses to satisfying its EDI requirements in conjunction with its ERP system.

EDI Transactions – customer or vendor order related transactions with "standard" formats that have assigned three digit identification numbers. Transactions can either be in-bound (received from the Trading Partners) or out-bound (sent to the Trading Partner). See List of EDI Transactions for the commonly used EDI Transactions.

EDI Specifications -  a document provided by each Trading Partner that spells out the "rules" for each EDI transaction they require support for. These specifications include field layouts for each transaction required, and the rules and/or values to be used for each data field on each transaction. Note these EDI Specifications can vary by location/division within a single Trading Partner for the same transaction.

Trading Partners - Companies that exchange EDI transactions. Many Trading Partners have multiple locations/divisions that require the support of EDI. Many times the EDI Specifications for each Trading Partner are not standard and can vary by individual location and even individual shipping location.   

Value Added Network (VAN) - The service purchased by traditional EDI users that electronically communicates EDI transactions between Trading Partners on a demand basis. There are many options available for a VAN. The price for this service is generally determined by the number of EDI transactions handled each month.

EDI Translation Software - This is the software that is used by traditional EDI users that maps and translates the EDI transactions when sending to or receiving from Trading Partners via a VAN. This software translates the format of the transactions between the format specified by each Trading Partner and the format used by each ERP system. This software generally runs on an in-house single PC or server. It is not a requirement for Trading Partners to use the same brand of EDI Translator software as their customers or vendors. Examples of EDI Translator Software include Trusted Link for Windows, Sterling Gentran, and Radley CARas.

These software products are licensed for either normal operations (example is a run time license) or for the mapping of the required transaction maps (example is a development license). Some products require an add-on module for developing the transaction maps (example - Trusted Link) and others require a different license for the base software product (example - Gentran Professional Version) for developing the transaction maps. Customers that use third parties for developing the required transaction maps are not required to purchase a developmental license.

ERP/EDI Module - An add-on application module, available from most ERP vendors, that is required when doing Electronic EDI Integration (see description below) between the ERP software and the EDI System.

Web Based EDI Service - This a type of service, available via the Internet, that replaces the traditional use of EDI Translation Software and the use of an Value Added Network.

Alternatively, some Trading Partners replace their use of Value Added Networks with the sending and receiving of EDI transactions directly from either their individual web site, or by using an industry based web based service.

Manual EDI Integration – The manual transfer of information between the EDI Translator Software and the respective ERP system. This typically involves re-entry of all information required for each EDI transaction (both in-bound and out-bound).

Manual integration is generally used when EDI transaction volumes are low or uncertain. Normally doing manual integration satisfies the core requirements to support EDI. The primary benefit of manual integration is its required investment and implementation time frame.

Electronic EDI Integration – The electronic transfer of information between the EDI Translator Software and the respective ERP system. This typically eliminates any re-entry of any information required for each EDI transaction.

Electronic integration is used when EDI transaction volumes are significant, or when the EDI transactions need to processed in a very short time frame.The primary benefits of electronic integration are the savings in customer service labor, significant reduction in overall processing time, and the improved levels of customer service.

Production Schedule – This term can have one of two related meanings: 1) a type or category of EDI transactions that includes a forecast of likely customer requirements, or 2) a batch of forecast transactions received from a specific customer, typically received on a regular interval (many times once or twice a week). These forecast requirements typically go weeks or months into the future, and are typically generated by the individual Trading Partner's ERP system.

Shipping Labels - Customer unique bar coded shipping labels that are required to put on the shipping containers when products are shipped to the Trading Partners. Generation of these labels can be manually interfaced or electronically interfaced with the ERP system. Many companies generate shipping labels with a standalone label system. 

Shipping Schedule - This is a type of EDI transaction that authorizes the shipment of products. They can also be referred to "JIT" transactions. They are normally used in conjunction with Production Schedule transactions, and they authorize shipment of specific requirements for a relatively short period of time (typically the current week plus 1 or 2 future weeks).