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How can you use common EDI transaction sets?

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Electronic Data Interchange (EDI) is a method of exchanging business documents and information electronically between trading partners. It can help you streamline your operations, reduce costs, improve accuracy, and comply with industry standards and regulations. But how can you use common EDI transaction sets to achieve these benefits? In this article, we will explain what EDI transaction sets are, how they are classified, and how you can use some of the most popular ones for different business scenarios.

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jaya Krishna tummala ,MS, CSM

Award Winning Senior Functional Quality Assurance|BSA|SAP QA|Safe 6.0 Agilist|Sigma Xi Full Member|IEEE Senior…

1 What are EDI transaction sets?

EDI transaction sets are standardized formats for exchanging specific types of data, such as invoices, purchase orders, shipping notices, or payment confirmations. They are also known as EDI documents or EDI messages. Each transaction set has a unique code and a set of segments, elements, and qualifiers that define the structure and content of the data. For example, the EDI transaction set 810 is used for invoices, and it contains segments such as BIG (Beginning Segment for Invoice), IT1 (Baseline Item Data), and TDS (Total Monetary Value Summary).

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jaya Krishna tummala ,MS, CSM

Award Winning Senior Functional Quality Assurance|BSA|SAP QA|Safe 6.0 Agilist|Sigma Xi Full Member|IEEE Senior Member|Fellow IETE|Author
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EDI transaction sets represent discrete units of data exchanged between trading partners as part of broader business processes or workflows. Managing the lifecycle of EDI transactions involves tracking, monitoring, and reconciling transactions from initiation to completion, handling exceptions, errors, and rejections, and ensuring compliance with service level agreements (SLAs) and contractual obligations. Implementing transaction management tools, exception handling workflows, and audit trails is essential for ensuring visibility, traceability, and accountability in EDI transactions.

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2 How are EDI transaction sets classified?

EDI transaction sets are classified according to different standards and formats that are developed and maintained by various organizations and industries. Some of the most common standards and formats are ANSI X12, EDIFACT, TRADACOMS, and XML. Each standard and format has its own rules, syntax, and version control for defining and validating EDI transaction sets. For example, ANSI X12 is a standard that is widely used in North America, and it has over 300 transaction sets that are grouped into functional categories, such as finance, transportation, or health care.

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3 How can you use EDI transaction sets for ordering and invoicing?

EDI transaction sets are often used for ordering and invoicing processes between buyers and sellers. By utilizing EDI, you can automate and streamline these processes, reduce errors and delays, and improve cash flow and customer satisfaction. Common EDI transaction sets include the 850 - Purchase Order, which is used by the buyer to send an order; the 855 - Purchase Order Acknowledgment, which is used by the seller to confirm or reject an order; the 860 - Purchase Order Change Request, which is used by the buyer to request changes or cancellations; the 865 - Purchase Order Change Acknowledgment, which is used by the seller to confirm or reject changes; the 810 - Invoice, which is used by the seller to request payment; and the 820 - Payment Order/Remittance Advice, which is used by the buyer to send payment or provide payment details.

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jaya Krishna tummala ,MS, CSM

Award Winning Senior Functional Quality Assurance|BSA|SAP QA|Safe 6.0 Agilist|Sigma Xi Full Member|IEEE Senior Member|Fellow IETE|Author
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EDI transaction sets offer automation and efficiency benefits by reducing manual errors and processing times. However, the initial setup and configuration of EDI systems to support these transaction sets can be complex and resource-intensive, particularly for smaller organizations or those with limited IT infrastructure.

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4 How can you use EDI transaction sets for shipping and receiving?

EDI transaction sets are also commonly used for shipping and receiving processes between sellers and carriers, or between carriers and buyers. This allows users to track and monitor the status and location of their shipments, optimize logistics and inventory management, and ensure timely and accurate delivery and receipt of goods. Examples of EDI transaction sets for shipping and receiving include the Warehouse Shipping Order (940), which is used by the seller to instruct the warehouse to ship goods; the Warehouse Shipping Advice (945), which is used by the warehouse to confirm that the goods have been shipped; the Advance Ship Notice (856), which is used to notify the buyer of shipment details; the Transportation Carrier Shipment Status Message (214), which is used by the carrier to update the seller or buyer of shipment status; and the Functional Acknowledgment (997), which is used to acknowledge that a message has been received or report any errors or rejections.

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5 How can you use EDI transaction sets for other business scenarios?

In addition to ordering and invoicing, and shipping and receiving, EDI transaction sets can be used to exchange data and information with trading partners in a variety of business scenarios. For instance, EDI transaction sets such as 832 (Price/Sales Catalog) or 888 (Item Maintenance) can be used for product catalog management, sending or receiving product information such as descriptions, prices, images, or specifications. Similarly, 846 (Inventory Inquiry/Advice) or 852 (Product Activity Data) can be used for inventory management, sending or receiving inventory information such as availability, quantity, location, or movement. EDI transaction sets can also be used for forecasting and planning (e.g., 830 [Planning Schedule with Release Capability] or 862 [Shipping Schedule]), as well as quality and compliance (e.g., 867 [Product Transfer and Resale Report] or 870 [Order Status Report]), sending or receiving forecast and planning information such as demand, supply, or production schedules; quality and compliance information such as inspection results, certifications, or performance indicators.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you use common EDI transaction sets?

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1 What are EDI transaction sets?

2 How are EDI transaction sets classified?

3 How can you use EDI transaction sets for ordering and invoicing?

4 How can you use EDI transaction sets for shipping and receiving?

5 How can you use EDI transaction sets for other business scenarios?

6 Here’s what else to consider

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