FIGURE 3.10 Value-added Network and EDI
have been proposed. The standard in the United States is the American National Standards Institute (ANSI) X.12 format. The standard used internationally is the EDI for administration, commerce, and transport (EDIFACT) format. Figure 3.11 illustrates the x.12 format.
The x-12 electronic envelope contains the electronic address of the receiver, communications protocols, and control information. A functional group is a collection of transaction sets (electronic documents) for a particular business application, such as a group of sales invoices or purchase orders. The transaction set is composed of data segment and data elements. Figure 3.12 relates these terms to a conventional document. Each data segment is an information category on the document, such as part number, unit price, or vendor name. The data elements are specific items of data related to a segment. In the example in Figure 12.18, these include such items as REX-446, $127.86, and Ozment Supply.
Benefits of EDI
EDI has made considerable inroads in a number of industries, including automotive, groceries, retail, health care, and electronics. The following are some common EDI cost savings that justify the approach.
• Data keying. EDI reduces or even eliminates the need for data entry.
• Error reduction. Firms using EDI see reductions in data keying errors, human interpretation and classification errors, and filing (lost document) errors.