EDIFACT: EDI’s toolbox
EDIFACT is an English acronym for Electronic Data Interchange for Administration, Commerce and Transport.
The EDIFACT standard aims to secure and accelerate trade. It enables companies to communicate and exchange all their business documents in EDI format with suppliers and subcontractors within their supply chain. They may also be logisticians, distributors and have a B2B network. The required information is transferred directly from the company’s IT system (ERP, PGI) to the computer systems of their industrial and commercial partners (Commercial Management, Production Management, ESM, TMS, WMS).
In order for this communication to work efficiently, 24 hours a day, 7 days a week, it is necessary for each company’s information systems to communicate with one another according to strict and common rules. That is the goal of the EDIFACT standard. A standard put in place by the United Nations that defines the rules for the interoperability of EDI messages by specifying content and syntax.
What does the EDIFACT standard represent?
Depending on the industry and regional zones, different EDI standards have been developed, published and adopted, based on the EDIFACT standard. These redeveloped standards take into account the sectoral characteristics of each industry and region: EDI Automobile in France and Europe with GALIA, and ODETTE, EDI EANCOM for EDI Grande Distribution with GS1, are just two examples.
The EDIFACT standard: an EDI standard
An EDI standard sets the rules for framing the exchange of information: specify what information, in what format, and where it should be placed in an EDI message. As a result, EDI transmission between companies becomes fully automated.
In the late 1980s and early 1990s, CEFACT-UN (The United Nations Centre for Trade Facilitation and Electronic Business), whose main mission is the facilitation of international trade, developed and published the Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT).
The EDIFACT standard is a set of syntax rules that define a hierarchical and repetitive structure required for an EDI message, which is an envelope identifying the sender and recipient in which the messages are placed. In addition, the EDIFACT standard offers a library of more than 200 standard messages for the exchange of electronic business documents between companies. The best known are the ORDERS, DESADV, INVOIC, HANMOV, and PROCAT.
This publication was quickly a success: developed internationally, published and updated regularly, adopted by an exceptionally large number of economic players in industry and trade, and standards bodies.
A sectoral organizations’ toolbox
In fact, the EDIFACT standard has become an EDI toolbox for sectoral standards bodies, such as GALIA, ODETTE, and GS1, and for all private and public organizations that wish to set up the electronic exchange of their documents. This toolbox complies with the syntax rules of the EDIFACT standard and appropriate standard EDIFACT messages by enriching them according to their specific needs. GALIA and ODETTE have migrated their EDI Automobile to EDIFACT.
The result has been a shift from proprietary standards set by regional zones and by sector activity, to a standard common to all sectors that is favored by industry standards bodies and adopted by a large majority of companies.
EDI providers, independent of the IT services of large companies, have contributed to the rapid deployment of EDI in small- and medium-sized enterprises, allowing them to work with large contractors. Thus, PGI companies’ cloud-based ERP systems were able to easily and directly link documents with the Commercial Management, Transport Management, and Warehouse Management of their supply chain, and other commercial networks. Similarly, large companies have accelerated the integration of new partners into their networks.
A basic standard for all industries
The strength of the EDIFACT standard is its adaptability to the specific needs of all industries. It is the most widely used standard in France and Europe:
- For EDI Automobile, the work of GALIA and ODETTE has contributed greatly to the success of EDIFACT. Thus, covering all exchanges between manufacturers, equipment manufacturers, and logisticians.
- The EDIFACT standard is also the basis of the EANCOM standards that define EDI’s large distribution. These are exchanges in the world of mass distribution: businesses, manufacturers, transporters.
- Most sector EDI standards have migrated to the EDIFACT standard: agriculture, public sector, and so on, enriching it.
EDIFACT has contributed to the spread of paperless commercial documents and the interoperability of information systems.
What future is there for this data-exchange standard?
Today, XML language is becoming the new benchmark for structuring and exchanging information. Indeed, it is better suited to interact with emerging technologies of the supply chain: consider, the Internet of Things (IOT) and Artificial Intelligence (AI).
XML is also more used than the EDIFACT standard in some parts of the world (the Pacific, Asia) and competes with EDIFACT in the exchange of trade documents.
Is a migration from the EDIFACT standard to XML possible?
At the moment the EDIFACT standard remains relevant:
- The EDIFACT standard is regularly updated to incorporate new functional needs, and thus regularly integrates new information and new sectoral specificities.
- The automotive and retail sector have made significant investments in EDI, to the EDIFACT standard, to the satisfaction of all stakeholders in their respective sectors. These have been productive investments that provide user satisfaction and which they wish to sustain over time.
EDIFACT and XML standards co-exist: EDIFACT remains the standard for paperless commercial documents in Business-to-Business exchanges. However, for the latest projects incorporating new technologies with new partners, the XML format is often chosen.
For more than 30 years, Tenor has been supporting you in setting up the EDIFACT Standard for your computerized data exchanges. Check out this article on EDI to delve deeper into the subject, or browse the one on EDI file types. Also, feel free to contact our EDI experts to identify your needs.