A Brief History of EDI
EDI has been around for approximately 25 years. It has been adopted by 98% of the Fortune 500 companies because it streamlines almost all aspects of doing business. The big hold back for smaller companies has been complexity and cost. If you are getting interested in EDI, probably because you have grown big enough that it has become cost effective or one of your bigger EDI capable customers is telling you do EDI or lose their business.
Current industry analysis indicates that 98% of Fortune 500 companies use EDI for business transactions, and that most mandate that companies conducting business with them use EDI as the primary transaction mechanism. Estimates are that in the next two years EDI transaction volume will grow from $850 million, to over $2 billion. Additionally, the federal government (Health Insurance Portability and Accountability Act – which literally lists 12 EDI transactions) and many state governments (Ohio’s Bureau of Workers Compensation and California’s EDIINT initiative) are targeting EDI as a mechanism to lower costs and become more efficient.
Another aspect of EDI is Vendor Managed Inventory (VMI). VMI is the next step in just in time inventory management. The customer sends EDI transactions that indicate inventory levels. This is used to automatically restock the customer. A second EDI transaction is sent to notify the customer of what is to be sent. An advanced ship notice is then used to indicate when the delivery will be made. VMI can totally automate the re-order process.
EDI brings substantial savings and benefits to organizations which implement it. Effective use of EDI:
An EDI implementation starts with a mapping function. EDI transactions are mapped to your internal database file formats for inbound documents. Internal application file formats are mapped to an EDI transaction in outbound mapping. These EDI transactions are exchanged with your trading partners.
The ANSI EDI standards are made up of over 300 transactions. The following is a list of the more common EDI transactions with which Jigsaw Solutions, Ltd. consultants have extensive experience. Please contact us either via e-mail or our office (614)771-1313 if you have any questions about specific transactions: