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The History of EDI

The History of EDI

Ever wondered exactly how EDI was established? Our timeline infographic illustrates the key moments; from the start of e-commerce through to today’s use of EDI.

1910 – E-commerce

  • First known use of e-commerce was in 1910 by a group of florists who started the Florists’ Telegraph Delivery Association to transmit flower orders.*
  • Such e-commerce businesses will draw on technologies including supply chain management, online transaction processing and EDI at a later date.

1948 – Berlin Airlift

  • During the Berlin Airlift, consignments of various goods and materials arrived with manifests in different languages, different numbers of copies and in different formats.
  • To overcome these problems, a standard manifest was created so that it could be transmitted via telephone, telex or radio.
  • Thousands of tons of cargo per day were tracked using these manifests.**

1965 – Holland-American Steamship

  • Holland-American steamship line sends trans-Atlantic shipping manifests via telex messages.
  • These were converted into tape that could be loaded onto computers.

1971 – Freight Control Systems

  • Among the first integrated systems using EDI were Freight Control Systems.
  • One such real-time system was the London Airport Cargo EDP Scheme (LACES) at Heathrow Airpirt in 1971.
  • This allowed forwarding agents to enter information directly into the Customs processing system reducing the time for clearance.

1973 – FTP

  • The File Transfer Protocol (FTP) was published and enabled file transfer between internet sites.

1974 – VAN

  • The first Value Added Network (VAN) was established.

1980 – Maritime Traffic and Customs

  • The increase of maritime traffic and problems at Customs, similar to those experienced at Heathrow Airportm led to implementation of DTI systems in individual ports or group of ports in the 1980’s.***

1982 – Large Retailers use EDI

  • Tradacoms is introduced as an EDI standard.
  • Automotive companies (including Ford and large retailers like Sears and Kmart) begin to mandate EDI for their suppliers.

1987 – EDIFACT

EDIFACT rules are approved as the ISO 9735 standard which provides:

1) a set of syntax rules to structure data
2) an interactive exchange protocol
3) standard messages which allow multi-country and multi-industry exchange.

The EDIFACT standard was developed by the UN.****

2002 – EDI via email

  • A standardized, secure method of transferring EDI data via email is published by the Internet Engineering Task Force (IETF).

2004 – Wal-Mart

  • Wal-Mart adopt the AS2 standard to communicate with suppliers.*****

2014 – House of Fraser

  • House of Fraser publish their technical guide for suppliers to use Tradacoms via FTP, instead of EDI VAN connections.******

Present Day

  • Sainsbury’s and Tesco require Tradacoms EDI files to send invoices, while ASDA use the same format but send their invoices via AS2.
  • XML orders from Pets at Home are handled in the same manner as traditional EDI orders.

The Future

  • Greater emphasis will be placed on machine-to-machine EDI invoicing processes, reducing the need for unstructured, human-readable formats like PDF.

For more information on How EDI is Evolving make sure you check out our blog.

Facts and Figures

  • An enterprise employing 1,000 workers wastes $2.5 million each year on finding and retrieving information.
  • The average paper requisition to order costs a company $42.90 in EMEA. With EDI, costs are reduced to $34.05.
  • Remittance Advices from B&Q and ASDA are converted into human-readable form and emailed to the administrator.

Sources

*Anderson, Parker, (2013), “Operations Management for Dummies”

**Deshmukh (2005), “Digital Accounting: The Effects of the Internet and ERP on Accounting”

***Tweddle, Douglas (1988), “EDI in International Trade: a Customs View”, in Gifkins, Mike; Hitchcock, David, “The EDI handbook”, London: Blenheim Online

****UNECE “Introducing UN/EDIFACT”

*****Food Processing “Meeting Wal-Mart’s mandates”

******HOF Suppliers “INVOICE TRADACOM 9 MESSAGE FORMAT – a technical guide for suppliers”

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