What is EDI?EDI (Electronic Data Interchange) is a paperless trading system in which orders, invoices and other business documents can be sent, received and processed electronically over a data-communications network. The data is structured according to established formats so that compatibility between companies is ensured.
What are the benefits of EDI?
- Fewer buffer stocks required – reduced requirement for expensive warehouse facilities
- Less working capital tied up in stocks
- Reduced data entry
- Reduced errors resulting in improved accuracy
- Saving in administrative and personnel costs
- Easier national and international trade ordering
- Better logistics management – faster and more certain supply cycles – via Just in Time strategies
- Increased responsiveness from suppliers via a drop in lead times – able to respond to customer requirements faster
- Resources released for value adding activities, including valuable staff redeployment
- More co-operative relationships with trading partners
- Innovative corporate image
What are the practical business benefits? What is the immediate benefit?Immediate business benefits include reduced data entry, reduced errors from having to re-enter vital information, and significant savings in administrative and personnel costs.
You've mentioned cost-savings and greater efficiency related to EDI… can you give specific examples of this?For example, a retailer's stock control system detects that more of a particular product needs to be ordered. The retailer issues a purchase order via EDI to the supplier. The supplier's computer system receives the EDI message and automatically checks inventory levels. If sufficient stock is available, the supplier's computer can automatically send an order confirmation back to the retailer via EDI and inform the warehouse to ship the product. As soon as the goods are shipped, an invoice can be sent by EDI to the supplier, which will be immediately available to the retailer's accounting system. Because all transactions have been computerized, sales analysis and management reports can be easily created, giving both retailer and supplier better control over their companies.
Throughout this example, staff involvement has been kept to a minimum - staff simply need to approve and monitor purchase orders, invoices and the shipment of goods. Not only are business processes automated, but also many clerical functions are completely removed, saving time, money and improving quality.
What's the development of EDI / e-Commerce service offered by the GS1 Hong Kong?
- 1992 pilot project
- 1995 launched EZ*TRADE – VAN based
- 1998 Web-based EZ*TRADE
- 2005 XML-based EZ*TRADE
What sort of company would use EDI? Is it just for retailers and their trading partners?Almost any company in the supply chain, from producers and manufacturers to shippers and retailers, can benefit form EDI.
Who is using EDI / e-Commerce in Hong Kong?Widely used in retail, distribution, healthcare, apparel, manufacturing Import / Export use EDI / e-Commerce for custom document import / export declaration, etc.
What is the GS1 Hong Kong's role in EDI / e-Commerce? Why are you actively promoting it? What do you stand to gain from it?Part of the GS1 Hong Kong's charter is to facilitate global trade and enhance business efficiency. EDI / e-Commerce serves this aim perfectly because it adopts an international standard, GS1 EANCOM, and allows companies to benefit in terms of cost - effectiveness, efficiency and responsiveness. GS1 Hong Kong is a non-profit organization founded by the Hong Kong General Chamber of Commerce, so we do not stand to gain financially from EDI / e-Commerce's success.
What is EZ*TRADE and how does it relate to EDI / e-Commerce in general?EZ*TRADE is an EDI / e-Commerce service offered by the GS1 Hong Kong for companies in the retail, manufacturing and trading sectors. EZ*TRADE adopts a message standard with worldwide recognition, GS1 EANCOM / EDIFACT, as well as the GS1 standard for product coding and location coding.
What is GS1? How is it related to EDI in Hong Kong?The international GS1 Standards provide a common business communication system between companies to enhance the efficient movement of goods, as well as to facilitate the accompanying flow of information. The GS1 Standards are widely adopted in over countries worldwide. The GS1 Hong Kong is the sole GS1 authority for Hong Kong, and runs the GS1 number bank which can be used by any member company based in the territories – for unique identification of products, materials, processes, services and locations to facilitate inter-company trade.
EZ*TRADE uses the GS1 EANCOM standard, a detailed implementation guideline developed by GS1 from the UN / EDIFACT message standard. EDIFACT was developed by the United Nations and stands for Electronic Data Interchange For Administration, Commerce and Trade and is the preferred EDI standard of Hong Kong.
Use of standard GS1 numbers means trading partners do not have to maintain complex cross-references of their trading partner's internal codes and are able to implement EZ*TRADE cost-effectively.
What is this GS1 EANCOM standard? What does it do with EDIFACT?EDIFACT is United Nations' International EDI messages standard. GS1 EANCOM is a detailed implementation guideline of EDIFACT and is particularly suitable for business along the trade supply chain.
Why is there a need for universal standards?Proprietary formats are supported by a single company or industry and the users are forced to modify their computer systems when the proprietary format is changed. Organizations desiring to conduct multi-industry transactions face the problem of supporting a multitude of incompatible transactional electronic interchange standards which are constantly changing.
The adoption of universal standards will enable all organizations to use a single agency to develop and maintain message sets. Changes will be made by a consensus process keeping in mind the best interest of the entire country and not a small independent group. In Hong Kong the EDI message standard for business & Commerce is GS1 EANCOM, a subset of EDIFACT. GS1 EANCOM is administrated by GS1 which has membership in over 155 countries and GS1 Hong Kong is a country member.
What is the relationship between GXS and GS1 Hong Kong?GXS is the partner of GS1 Hong Kong in providing the electronic commerce service EZ*TRADE. In addition, GXS also provide EZ*TRADE helpdesk support and maintenance service.
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