Define Electronic Data Interchange (EDI). Compare EDl on Value Added Network (VAN) and on the internet.

Subject E-Commerce
NU Year Set: 3.(a) Marks: 5 Year: 2017

By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

Now that you have a better grasp of what EDI is, why use a VAN (Added Value Network) for EDI communications?
An EDI VAN (Value Added Network) offers a B2B (business to business) network of electronic communications, a network which includes an array of ‘value added’ services, as well as facilitated communication protocols that otherwise would not be available when going through the Internet or regular phone lines.
Using and EDI VAN allows for seamless and automated communication channels between trading partners, while offering multiple formats for EDI translation.  This, in turn, results in a proficient and effective supply chain management.  Most importantly, EDI VANs (Value Added Networks) are not industry-centric; they work across all industries, in which case scalability is fundamental!
Let’s move on to examine some of the key advantages and benefits to using an EDI VAN (Value Added Network) as the preferred mode of electronic business communication!
 
  • Data Integrity- EDI VANs typically audit both incoming, as well as outgoing data, to detect errors.There are checks and balances in place and, in some cases, EDI VANs (Value Added Networks) may provide corrections and adjustments services to enable successful transmissions and receipt of data.
  • Improved B2B (business to business) exchanges– VANs (Value Added Networks) allow for the use of multiple protocols to send data and for each trading partner to employ the data format best suited for their organization.
  • Speedy business communication– the exchange of documents through a VAN (Value Added Network) is significantly faster than other means of data transfer as data is exchanged directly from one business software to another. Manual processing is typically eliminated which therefore significantly reduces the risks associated with errors and consequent time delays.
  • Secure and reliable communication channels– VANs (Value Added Networks) are highly secure and meet government and HIPAA security standards.
  • Unrestricted accessibility– with a 24/7 accessibility of the VAN (Value Added Network), the exchange of data is secure to anywhere in the world, with no time constraints or disruption to your daily business operations.
  • Simpler EDI compliance– EDI testing and compliance are required by most retailers, to be met and complied with by their supply chain vendor community. Furthermore, retailers often require to do so through the use of an EDI VAN (Value Added Network), their preferred EDI method of communication. Consequently, going through a VAN (Value Added Network) will facilitate and simplify, to some degree, the EDI
  • Visibility tools– A handful of VAN (Value Added Network) providers, such as EDI Gateway Inc, offer a monitoring web tool and corresponding reports to allow you to track the data you exchange and with your trading partners and its delivery status. Such ‘value add’, multi –user visibility tools have unrestricted and unlimited accessibility- from anywhere, at anytime.

By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

Not to be confused with a van, a type of road vehicle used for transportation, the value added network, aka VAN, is certainly a term you would often stumble upon in the world of EDI, and it certainly can be defined as a vehicle, of communication that is.
So if you are in the process of setting up EDI or exploring the complex, and often quite daunting, EDI implementation process, it Is highly likely that you have, or will, come across the term VAN- Value Added Network.


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