Common Business Acronyms Related to EDI

Today’s post covers common business acronyms related to EDI that are frequently encountered by small businesses. This is the third of a four part series. The post next week will cover EDI technical acronyms.

3PL – Third Party Logistics provider. Services provided may include warehousing, inventory management, pick and pack, shipping preparation, transportation, and freight forwarding.

B2B – Business to Business. Refers to processes between two companies such as between a retailer and a supplier.

ERP – Enterprise Resource Planning. An ERP is a series of integrated software applications to manage product planning, product development, accounting, manufacturing, marketing, and sales. EDI transactions can be integrated with an ERP system to reduce manual labor, increase speed, and increase accuracy.

GS1 – GS1 is a non-profit organization that administers supply chain standards. UCC and UCP codes are purchased from GS1.

VMI – Vendor Managed Inventory. A business arrangement between a customer and a supplier in which the supplier assumes responsibility for monitoring the customer’s inventory levels and providing additional items as needed.

SCAC – Standard Carrier Alpha Code. Consists of 4 characters that identify a specific transportation carrier. For example, YFSY is the SCAC for Yellow Freight System.

UCC – Uniform Code Council. The UCC was renamed GS1 in 2005.

UPC – Uniform Product Code. Is a unique identifier for a single product. A UPC is a number and an associated barcode that is issued by GS1.

As always, contact us us anytime for easy-to-use EDI solutions delivered from the cloud.

Common EDI Technical Terms

Today’s post covers common EDI technical terms and is the second of a four part series. The post next week will cover EDI business acronyms and the week after that will review EDI technical acronyms.

The technical terms below are frequently encountered by small businesses when they first start to investigate EDI.

Connectivity – The capability to connect two computers located at two different businesses for the purpose of sending and receiving EDI transactions. The most common connectivity method is by way of a Value Added Network (VAN). Most other connectivity is via a communication method called AS/2.

EDI transaction numbers – EDI document types are uniquely identified with a 3 digit number. For example, a purchase order is an 850 EDI document, a shipping notice is an 856, and an invoice is an 810.

EDI Software – EDI software facilitates sending and receiving EDI transactions according to each trading partners unique requirements. The EDI transactions are translated and mapped into a form that is either human readable, such as a web form, or which can be integrated with a system, such as an accounting system.

Functional acknowledgement – An EDI transaction that is sent by the receiver to the sender which lets the sender know that the receiver did in fact receive the transaction. A functional acknowledgment is a 997 type.

Translator – The functionality of EDI software that converts EDI data into another format.

Mapping – The functionality of EDI software configuration that converts each EDI field into a field in the file of a different format. Mapping is necessary because virtually every EDI partner has unique requirements requiring mapping to their specifications.

Mailbox – An EDI mailbox is a secure storage area that is accessed to send and receive EDI transactions via a Value Added Network.

Value Added Network –A secure third party service that communicates EDI transactions between trading partners. Commonly referred to as a “VAN.” A VAN enables a trading partner to have one mailbox from which to send and receive EDI transactions.

Version – A four digit number that identifies the specific release of the ANSI or EDIFACT standard that is used by the trading partner. Varies from partner to partner. For example, some partners use version ANSI version 4010, some use version 4030, others use version 5010 etc.

A cloud EDI provider such as CovalentWorks bundles all of the terms used above into one easy-to-use service accessible via the web. Contact us us anytime to find out more.

Common EDI Business Terms

Today’s post covers common EDI business terms and is the first of a four part series. Next week’s post will review frequently used EDI technical terms, the following week will be about common EDI business acronyms and the last post will focus on the most prevalent EDI technical acronyms.

The terms below are common terms encountered by small businesses when they first start to investigate EDI. Some of the terms are EDI-specific and some are related to business processes associated with EDI.

Barcode – A representation of information that can be read by a scanner. Parallel vertical bars of varying width and separation are an example of barcodes and are widely used. Patterns of dots are another form of barcode that is starting to gain traction because they can store more information.

Cloud Computing – The rental of business software and related services over the internet instead of buying software. Cloud computing solutions manage complexity for clients so they can focus on running their business. Users of cloud computing services do not have to worry with buying, testing and maintaining EDI software. Sometimes also known as web-based or Saas (Software as a Service).

Compliance – Precisely following a trading partners unique guidelines for EDI transactions and following a trading partner’s unique business rules, such as shipping procedures.

Cross-dock – A warehouse that receives shipments from suppliers on one side and sends out shipments to individual stores on the other side. Suppliers shipping to a cross dock location will typically be required to label their product cartons or pallets by store to facilitate automation in the cross dock facility.

GS1-128 labels – Barcode labels affixed to shipping cartons or pallets that follow GS1-128 guidelines and the compliance guidelines for the specific trading partner to whom a shipment is sent. Formerly known as UCC-128 labels.

Duns number – A unique nine digit number used to identify a business. It is commonly used for credit purposes and is assigned by Dun & Bradstreet.

Integration – This term is commonly used in three contexts – 1) Exchanging EDI business documents with trading partners, 2) automatically importing and exporting EDI transactions with accounting or other in-house systems, and 3) automatically exchanging EDI transactions with a 3PL (Third Party Logistics Provider) or warehouse.

Trading Partner – A business entity with whom you buy or sell. For example, Target is a Trading Partner for a supplier who sells widgets to Target. EDI transactions are exchanged with Trading Partners.

Third party – A business entity other than a sender or receiver of EDI transactions. For example, CovalentWorks is a third party EDI provider to a supplier of widgets to Target.

Clink on this link for our extensive EDI glossary

As always, contact us anytime to find out more about our easy-to-use EDI solutions delivered from the cloud.

Thinking of Buying EDI Software? Why You Should Choose a Cloud EDI Provider Instead

Are you considering buying EDI Software? There is a great chance you do not have to.

Why You Need EDI in the First Place

The investigation of purchasing EDI software is usually started by a new customer that requires EDI compliance.

So the first question is “Does your customer required EDI compliance?” It is widely required in the United States and Canada. EDI compliance is required by most big box retailers and many big customers in other industries such as automotive, healthcare, government, grocery, pharmacy, industrial, and transportation. If you can not demonstrate the EDI capability necessary for compliance, then many of these companies will not buy from you, no exceptions.

If you are selling internationally, things may be different. EDI is not required as often by companies outside the United States and Canada. According a 2013 Vanson Bourne B2B and MFT Global Study, which included interviews with 650 senior level IT executives from 8 countries and 7 industries, 84% of their purchase and invoice transactions are not done electronically. Instead 32% of transactions are done using email, 26% use fax/snail mail, and 26% of transactions are done over the phone. So if your customer is outside the United States and Canada, you may not have to be EDI compliant.

Why You Should Choose an EDI Provider Instead of Buying Software

However, if your customer requires EDI compliance, do you have to buy EDI software? Fortunately, the answer can still be “no.”

Instead of buying EDI software, you can use a cloud EDI provider that includes not only EDI software, but everything else you need to be in compliance with your customer’s requirements. With a cloud EDI provider like CovalentWorks, you get an EDI solution that is as Easy as Email&#174, making compliance simple and not a headache.

    • Cloud EDI offers a complete, affordable EDI solution
    • Easy compliance with your customer’s requirements
    • Avoid expensive up-front software investment

CovalentWorks has implemented thousands of EDI customers for our clients. None of them had to buy and maintain any EDI software or hire expensive EDI technical experts. Contact us anytime to find out more about our EDI cloud service.

The Impact of Big Data on Suppliers

You have probably heard about Big Data. Barack Obama’s re-election team famously used Big Data to effectively target and communicate with swing voters to convince them to vote for their candidate. Retailers are using Big Data to better understand their customers, business, and suppliers.

What Is Big Data?

Big Data is the collection, organization, and analysis of large amounts of data. Much of the data may be in an unstructured format that does not fit into traditional relational data bases. Data can come from both inside and outside the organization. Data volumes can quickly grow in size to many terabytes.

How Is It Used?

You may have heard the expressions “You can not manage what you can not measure,” or “what gets measured gets done.” Big Data provides useful measurements by applying advanced analytic tools to a diverse set of data.

Big Data enables managers to measure and know radically more about their businesses than ever before and then translate that knowledge into improvements.

Netflix uses Big Data to recommend movies. Amazon uses it to recommend not only books but also products in a wide diversity of categories. Other online retailers have caught on and provide similar kinds of recommendations. But that is only the tip of the Big Data iceberg.

Big data casts a big net. Retailers are now gathering and understanding information about:

  • Quality of products
  • Social media conversations
  • Online reviews
  • Mobile shopping interactions
  • Product winners and losers
  • Inventory management
  • Supply chain performance

What Big Data Means to Suppliers

Retailers are just beginning to use Big Data. But already they are gaining significant insights into how their customers interact with them before and after purchases. They increasingly know about consumer perceptions of your products in the market place. This means you need to be aware of what customers are saying online about your products. It also means you may have the opportunity for joint online promotions.

Retailers are developing new insights into inventory levels and determining how to respond competitively to changing consumer expectations for shopping and delivery. Be prepared for changing shipment requirements and possibly smaller and more frequent orders. See my recent posts on the extraordinary changes in consumer expectations and retailer responses to learn more about that.

CovalentWorks EDI solutions are constantly updated to stay current with the evolving requirements of retailers. Contact us anytime to learn more.