Electronic exchange of business documents such as purchase orders, ASNs and invoices between trading partners in standard formats.
Detailed Definition
Electronic Data Interchange (EDI) replaces paper or email documents with structured electronic messages that trading partners' systems can read automatically. In North America the ANSI ASC X12 standard is most common, with transaction sets such as the 850 purchase order, the 856 ship notice or ASN, and the 810 invoice. UN/EDIFACT is widely used internationally. Messages are sent through value added networks or direct connections such as AS2. Many large retailers and carriers require suppliers to trade by EDI.
Common EDI documents in pallet shipping
- 850 purchase order: the customer orders product, often with ship to and pallet requirements.
- 855 order acknowledgment: the supplier confirms what it will ship.
- 856 ship notice: lists what is on each pallet, linked to the SSCC on the pallet label.
- 810 invoice: bills the customer for what shipped.
- 204, 214 and 210: carrier load tender, shipment status and freight invoice.
- 997 functional acknowledgment: confirms a message was received and could be read.
Getting EDI and pallets to agree
The ship notice and the physical pallets must match. If the 856 says a pallet holds a certain number of cases and the label on the pallet carries a different SSCC, or the counts are wrong, the receiver may have to check every case by hand. Many retailers charge suppliers for these errors under their routing guides. Before going live with a trading partner, run test transactions, confirm which versions and fields they require, and agree how pallet hierarchy (pallet, case, item) is shown in the ship notice. Keep label printing and EDI data driven from the same system so they cannot drift apart.
Related Glossary Terms
Frequently Asked Questions
Do small suppliers need EDI to sell to large retailers?
Most large retailers, grocery chains and many distributors require EDI for orders, ship notices and invoices, and some also require it from carriers. Small suppliers often meet the requirement by using a web based EDI service that converts documents without in-house software. Check each customer's supplier requirements, because they specify which documents, versions and testing steps are needed before the first order ships.
What is the difference between EDI and an API?
EDI exchanges complete business documents in long-established standard formats, often in batches, and is deeply embedded in retail and logistics. An API is a programming interface that lets systems request or send data on demand, often in real time and in formats such as JSON. Many companies now use both: EDI for established trading partner documents and APIs for tracking, visibility and newer integrations.