Introduction to EDI (Electronic Data Interchange)

Computer systems first developed the ability to exchange data in the 1960s when Ed Guilbert, the father of EDI, developed an electronic message format for sending cargo information. 

The first EDI messages were Telex messages exchanged in 1965 between shipping companies. At the time, in roughly 2 minutes, a full page of information could be sent. After loading them to tape, these messages could be accessed by computers. 

In 1968, electronic messages in varied formats were being exchanged by various companies in the transportation industry, which necessitated the formation of the Transportation Data Coordination Committee (TDCC), which released the first EDI standards in 1975. Also, in this year, Telenet, the first commercial packet-switching network, was established. Telenet was also the first Value Added Network (VAN) as it did more than just connect computer systems. 

EDI became the support of the global financial system in 1977 when the Society for Worldwide Interbank Financial Telecommunications (SWIFT) established the SWIFT messaging system, which defined a large number of standard messages covering most aspects of interbank communications. In the same year, the TDCC was renamed the Electronic Data Interchange Association (EDIA), and was later leased by the American National Standards Institute to become the ANSIX12 committee.

In 1981, the ANSIX12 standards were published, which included the transportation, food, drug, warehouse, and banking industries. 

In 1985, the United Nations created the EDIFACT EDI standard, which went on to be adopted by the automotive industry in the U.S.

In the 1990s, EDI was being used in a VAN setting by almost 12,000 companies in the United States. Value-added networks (VANs)—operated by providers such as IBM, GEIS, and AT&T—were the key

players in the industry at the time. 

In 1996, the Uniform Code Council (UCC) began to normalize EDI communications over the Internet. 

In 2001, the AS/2 standard was published by the UCC, which used the Hypertext Transfer Protocol (HTTP) to enable encrypted data transmission over the Internet. AS/2 has been gaining popularity because it removes the middle-man. Large retail chains, such as Walmart, Target, and Lowe, use AS/2 and require their suppliers to do the same.

Today, 90% of Fortune-500 companies are EDI-capable, and over one hundred thousand businesses in the United States use an EDI solution of some sort to communicate with their customers, suppliers, or financial service providers.New to EDI or an expert, for questions or if you need advice, feel free to contact us and schedule an appointment at https://www.aiminsight.com/schedule.html.  We are excited to meet you.

About the Author: AJ Amjad Khanmohamed

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