Logistics Information

The eCommerce Process explained

Electronic Data Interchange (EDI) is defined as the replacement of paper-based purchase orders with electronic equivalents. EDI offers easy and cheap communication of structured business information such as orders and invoices between businesses through electronic mailboxes.

The essential elements of EDI are:

  • the use of an electronic transmission medium (originally a value-added network, but increasingly the open, public Internet) rather than the despatch of physical storage media such as magnetic tapes and disks;
  • the use of structured, formatted messages based on agreed standards (such that messages can be translated, interpreted and checked for compliance with an explicit set of rules);
  • relatively fast delivery of electronic documents from sender to receiver (generally implying receipt within hours, or even minutes); and
  • direct communication between applications (rather than merely between computers).

EDI's saves unneccessary re-capture of data. This leads to faster transfer of data, far fewer errors, less time wasted on exception-handling, and hence a more stream-lined business process.

Electronic Trading Diagram

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