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EDI Academy - One language to unite the whole distribution chain

02/02/2016

Using Electronic Data Interchange (EDI) is linked with the use of standard language. Without a common format, messages shared remotely would be incomprehensible for the recipients in most cases. Let’s take an example: if two people who speak English have a conversation in their own language, communication is fluid. However, if one is speaking Spanish and the other Russian, dialogue becomes impossible.

Something similar happens with EDI. As we saw in the first issue of EDI Academy, at first the multiplicity of formats and communications systems made communication between business partners extremely difficult. So, as early as the 60s, the US automobile sector decided to look for a standard. Ever since, ongoing work has created numerous common languages, both generic and custom-designed for specific industries.

But what information do the standards provide? On one hand, they give a structured description of the message (invoice, despatch advice, purchase order, etc.) and, on the other, the format used (month-day-year, decimal, etc.). This way, understanding of the documents is guaranteed, regardless of the location of the partners or the company’s activity sector.

WHICH STANDARDS ARE THE MOST WIDELY USED?

  • ANSI ASC X12 Created in 1979 by the American National Standards Institute (ANSI), it is considered the first ever EDI standard. Current estimates say it is applied by 300,000 companies worldwide, although its use is especially widespread in the United States.
  • UN / EDIFACT Edifact came into being in the 80s, thanks to the work of a United Nations group known as Working Party 4. It is an international, multi-country and multi-industry standard, widely used in Europe due to its early adoption.
  • EANCOM At the end of the 80s, the EAN General Assembly created this standard for the retail sector. However, over the years, its use spread to other industries such as healthcare construction. It currently depends on GS1 and acts as a subset of UN/EDIFACT.
  • UBL (Universal Business Language) This standard was devised in 1998 by Charles Hoffman, an expert accountant and auditor. It is based on XML language and was specifically designed for the financial sector. In its 2020 Strategy, the European Union has designated UBL 2.1 as a benchmark standard in public procurement.
  • ODETTE This language, developed by the European Association of the same name, was created for the automotive industry. In this sector, EDI is an indispensable technology and fully established, otherwise working systems like Just in Time would not be possible. The organization is currently working on the OFTP2 communications protocol OFTP2, with the participation of EDICOM.
  • ROSETTANET Like UBL, this is a standard based on XML language and managed by GS1. It came into being in the United States, where it is mostly used, although it has also spread to other parts of the world. Telecommunications and logistics are the sectors where it is most applied.

These are only some of the most commonly used EDI standards. However, the widespread uptake of this technology is encouraging the development of new languages adapted to the particular features of each company. In an increasingly globalized world, the use of these common standards is crucial to achieve fluid communication. A language designed to bring us altogether, ensure interoperability and streamline business transactions.

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