June 15th, 2021
From manufacturing to retail to automotive, you’ll find that electronic document exchange—more commonly referred to as EDI—has penetrated just about every industry today. You’ll also find that most industries have their own way of doing things. That is to say, EDI can take many forms—standards vary per industry. But if you’re just starting out with EDI, or you’re expanding into new regions and/or markets, it’s good to familiarize yourself with the some of the more popular EDI standards and subsets that you’re likely to encounter along the way.
Good for you to know: TIE Kinetix supports all EDI standards.
What Is an EDI Standard?
Every industry (and region) has different needs and therefore communicates in a different way when exchanging documents electronically. This is why EDI standards were developed, and it’s one of the main reasons service providers like TIE Kinetix exist. Our website may only be available in Dutch, English, German, and French, but when it comes to EDI, we’re fluent in every language.
So what does that mean, exactly? Well, suppose you have several suppliers, each of which have a unique invoice layout. For instance, let’s say Trading Partner A puts the total at the top left of the document while Trading Partner B puts the total at the bottom right. On the other hand, Trading Partner C puts it in the middle. It’s very annoying for your AP team to figure out what information is where each time a new invoice comes in, and it wastes a lot of time.
Okay, so we know this is obviously an oversimplified example. But it does show why EDI standards are necessary; they create uniformity and make it possible for your ERP or financial system to understand the incoming data without human intervention.
To provide a more detailed explanation, countless EDI standards have been defined and are often specific to certain regions and/or industries. For example, the UN/EDIFACT standard is mainly used in Europe and ANSI X12 is primarily used in North America. With these standards, the format of specific EDI messages (like invoices) are standardized to ensure that all trading partner systems can understand each other’s electronic messages. In other words, EDI standards ensure that all trading partners are speaking the same language.
With EDI standards, the structure and exact order of the data is defined, ensuring uniformity and consistency. In using one or more EDI standards, your back-end system can be programmed to understand all business exchanges and process them automatically—no more manual entry! EDI standards also make it easier and less time consuming to connect with new trading partners because they eliminate the need for developers to spend time creating custom maps. This also saves a lot of money.
It’s also important to mention that certain standards may contain subsets of which the requirements differ from the main standard. If you’re familiar with UN/EDIFACT or ANSI X12, you likely have some experience with subsets.
What Are Subsets?
UN/EDIFACT and ANSI X12 are so comprehensive and include so many unique features that each standard can be used for nearly every transaction imaginable and in a wide variety of industry sectors and subsectors. This also means that the EDI standards used in certain sectors may contain many unnecessary elements. For this reason, subsets have been created.
Subsets are EDI standards that only contain relevant elements of the UN/EDIFACT or the ANSI X12 standards—only the elements that apply to a specific user group or industry. The remaining elements that are not needed are not used.
Most-Used EDI Standard in North America
ANSI X12 (American National Standards Institute X12) is the North American counterpart to the EDIFACT standard. In 1979, the ANSI subsidiary Accredited Standards Committee (ASC) developed this standard for electronic data interchange in North America. As with EDIFACT, we’ve also compiled a lot of useful information on ANSI X12, including a full list of ANSI X12 EDI transaction sets.
ANSI X12 is very comprehensive; almost every business transaction has a corresponding EDI message, and it is suitable for use in every industry. As with the UN/EDIFACT standard, ANSI X12 consists of many subsets. For example, the UCS subset is used by supermarkets, the VICS subset is used by fashion retailers, and the AIAG subset is used by the automotive industry.
Here's a list of ANSI X12 subsets and their corresponding industries:
HIPAA – Health Insurance Portability and Accountability Act
UCS – Uniform Communication Standard
VICS – Voluntary Interindustry Commerce Standards
AIAG – Automotive Industry Action Group
CIDX – Chemical Industry Data Exchange
EIDX – Electronics Industry Data Exchange Group (CompTIA)
PIDX – American Petroleum Institute
Commonly Used EDI Standards in Europe
UN/EDIFACT stands for the United Nations/Electronic Data Interchange for Administration, Commerce and Transport. It was first published by the United Nations in March 1987, but we won’t go into too much detail here; we’ve already written about it extensively.
This European standard is widely used for trade and transport management, accounting, customs control, pensions, health care, social insurance, justice, employment, statistics, construction, finance, insurance, manufacturing, tourism, trade, freight, and container transport.
Here’s a list of UN/EDIFACT subsets and their corresponding industries:
EANCOM –Consumer Goods (Retail)
ODETTE – European Automotive Industry
CEFIC – Chemical Industry
EDICON – Construction Industry
RINET – Insurance Industry
HL7 – Healthcare
SWIFT – Banking
IATA – Flight Transportation
UIC 912 – Rail Transportation
EDIFICE – Electronics, Software, and Telecommunications Industry
VDA 4938 – Automotive E-invoicing Standard*
A Closer Look: Most Popular EDIFACT Subsets
EANCOM is a very popular subset of UN/EDIFACT.
EANCOM was developed by GS1, an organization that develops supply chain standards. The standard was initially intended for the retail (consumer goods) industry, but it is now popular among other industries as well, such as the healthcare sector.
The three most commonly used EANCOM messages are ORDERS (purchase order), INVOIC (invoice), and DESADV (advance shipping notice). EANCOM is a widely used EDI standard and is utilized by nearly 120,000 companies in 43 countries. You can see the full list of EANCOM EDI codes here.
ODETTE is a European non-profit collaboration that looks at what’s needed within the automotive industry to bring maximum efficiency to the supply chain. Direct members of ODETTE represent the automotive industry—they include the main companies that produce cars in Europe. Like EANCOM, ODETTE is an EDIFACT-based subset.
In addition to the ODETTE standard, the collaboration has also developed an EDI protocol tailored to the specific communication requirements of the automotive industry: OFTP2. OFTP2 has been implemented at most major automotive companies, including Audi, BMW, Ford, Hyundai, Opel, Volkswagen, Skoda, Volvo, and more.
Although this protocol was initially developed for the automotive industry, it is also used in manufacturing, retail, banking and government, among others.
The VDA (Verband der Deutschen Automobilindustrie) has developed many standards over the years. The most recent for e-invoices is the VDA 4938, which meets the latest legal and fiscal requirements for the automotive industry.
Even though the VDA had published its own standards prior to the existence of EDIFACT, the VDA 4938 is based on the EDIFACT e-invoice (INVOIC) and is therefore a subset.
Another Popular European Subset
TRADACOMS (Trading Data Communications Standard) is one of the very first EDI standards. The standard is based on UN/GTDI, a predecessor of the UN/EDIFACT. The original version was introduced in 1982 and was widely used by retailers and wholesalers in the United Kingdom (UK).
In 1995, development of this standard was discontinued. As of July 1, 2017, GS1 UK is also no longer offering support for users of this standard. It is continuously becoming less and less workable and more expensive to maintain. Therefore, the recommendation is to move to the EANCOM subset of the UN/EDIFACT standard. However, TRADACOMS is still regularly used in the retail sector in the UK.