In the October 2007 installment of “Synchronization”, I wrote an article which gave an overview of Electronic Data Interchange (EDI) and the benefits of using the technology.  Savings in time and paperwork along with the ability to quickly send and receive information are some of the best reasons to embark on an EDI solution.

However, the one thing that needs to be understood about EDI is that everybody has to be on the same page.

STANDARDS

EDIFACT, HL7, IATA , X12, EANCOM , Edig@s and XML – the list goes on.  Which one is right, which is wrong?  In the end, the real question should be “Which one are my vendors and /or customers using?”

Walmart is a great example of how EDI is done.  If you are doing business with Walmart then you already know that EDI plays a huge role in how business is accomplished.  Purchase Orders, Sales Orders, Invoices, all aspects of the business process are accomplished electronically.  This is greatly enhanced by one thing – each partner in this relationship is able to communicate with the other by way of pre-determined and agreed upon standards.

Not using the same standards will prove to hamper, if not destroy, the ability to do business.  Historically, standards can be seen to help or hinder the advance of many things.  The one instance that stands out in my mind is the railroad.  During the American Civil War, the advance of the Union Army into the South was hampered by the fact that the Southern States had railways that were a different gauge than that of the Union.  This meant that the Union trains could not run on the Southern tracks until those tracks were refitted to allow the trains to use them.

The technology was there, but without a standard it wasn’t worth much – until it was reworked.

COMMUNICATION

Even if we’ve got the technology working, there could still be a problem.  One of the pre-determined understandings of EDI is the “one-to-one” relationship of things like Item Numbers.  Generally, when a customer orders goods from a vendor, the EDI documents will list the Item Numbers required.  The customer items are cross-referenced in the vendor database so that when the EDI documents are processed, the proper goods are shipped and the customer is invoiced.

Think of it like driving in a foreign country where you don’t speak the language; sure, the car and the road all seem normal, but the instrumentation and the roadsigns are all incomprehensible.

REMEMBER “K.I.S.S.”

“Keep It Simple Stupid”.  It sounds so, well, simple doesn’t it?  Look into how the Trading Partner and you are currently doing business.  Do you have any current structures such as a customer/vendor cross-reference for items that you can exploit?  Are you or your Trading Partner currently using EDI with others and can that experience help you to setup a new relationship?

Many companies that are currently relying heavily on EDI will offer assistance to prospective Trading Partners by helping them get onboard with a new EDI Solution or by supplying information that will allow the new Trading Partner’s own EDI Solution to communicate with them.  These companies have seen the advantage of working with their Trading Partners to make everything work the way it should, and to reduce the amount of startup time that is needed to get things rolling as soon as possible.

Other companies, however, are not as willing to work together.  These are situations where compromise can be disastrous.  Instead of working with common information, the Trading Partners end up comparing apples to oranges.  This slows down EDI transactions while everyone scrambles to get things corrected, rewritten, recertified, etc.

PUT IT ALL TOGETHER

As with any properly executed implementation, setting up an EDI Solution will take some time, but the advantages in the long run will far outweigh that.  Keeping in contact with your Trading Partners to ensure that everybody is still on the same standard and communicating properly are not only good customer relations, they go a long way in EDI maintenance as well.  Remember that the term “Trading Partner” refers to everyone and everyone is in it together.