EDI briefly explained

EDI stands for "Electronic Data Interchange" and is therefore almost self-explanatory.

When software systems communicate

However, the correspondents here are two software systems and the messages that are transmitted include orders. This exchange of information is automated. In addition to saving time, it also saves on errors that are made when, for example bills manually into the system. In addition to customers, the exchange with suppliers is also mandatory. The EDI capability of suppliers is particularly necessary for larger companies.

EDI defined

Electronic data interchange, better known as EDI, is the process by which structured business documents are transferred between companies in a standardised, digital format. These documents include orders, invoices, delivery notes and payment notifications. EDI enables companies to speed up their processes and reduce the susceptibility to errors that can occur with manual data entry.

Especially for manufacturing companies

EDI has long been an integral part of the workflow, particularly in manufacturing companies. For example, if certain parts of a production run are delivered, the system can determine where and how the part will be further processed by scanning it on delivery. This means that the goods do not have to be stored temporarily until they are registered in the ERP system, but can be assembled straight away. This saves time, storage space and therefore money. EDI is also already being used in government institutions. For example in the project MAGPIEthe electronic tax return.
EDI is therefore definitely paving the way for Industry 4.0 and has also found its place in widespread use (e.g. e-invoices).

Standards in the EDI area

Various EDI standards exist for efficient communication between various companies and ERP systems. The most prominent of these are UN/EDIFACT (United Nations Electronic Data Interchange for Administration, Commerce, and Transport), ANSI ASC X12 (American National Standards Institute Accredited Standards Committee X12) and ODETTE (Organisation for Data Exchange by Tele Transmission in Europe). These standards define how business documents must be structured and formatted to ensure problem-free data exchange.

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