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Full form of EDI

"Electronic Data Interchange" is the full form of EDI. EDI is the computer-to-computer transfer of business documents between business partners in a standard electronic format. By switching from paper to electronic transmission of business documents, companies realize significant benefits such as reduced costs, faster processing speed, fewer errors, and better relationships with business partners.

Many business documents can be exchanged by using EDI, but two of the most popular are sales orders and invoices. EDI eliminates the sorting and processing of mail, which is synonymous with traditional business communication. The primary mandate of EDI is to standardize the information shared in business records, enabling paperless exchange.

History of EDI

  • EDI was influenced by the advances in military logistics, as were many other early information technologies.
  • The difficulty of the Berlin airlift in 1948 involved the construction of approaches and procedures for sharing vast amounts of data and details about the products being transported, often via 300 baud teletype modem.
  • These initial ideas later created the first American TDCC (Transportation Data Coordination Committee) standards. Freight Control Systems was one of the first integrated systems to use EDI.
  • In 1971, one such real-time system was LACES (London Airport Cargo EDP Scheme) at Heathrow Airport in London, UK.
  • Implementing the Direct Trader Input (DTI) process allows freight forwarders to enter data directly into the customs processing system, reducing the duration.
  • Growing maritime traffic and customs problems similar to those faced by Heathrow Airport contributed to the introduction of DTI systems in individual ports or groups of ports in the 1980s.

Advantages of EDI

  • Instead of weeks or days, information and data are exchanged within seconds.
  • Eliminates time-consuming tasks such as printing, storing, filing, and delivering paper.
  • In EDI, human intervention reduces human errors such as messy handwriting, mishandling of documents, etc.
  • It helps businesses save money by eliminating paper development and supply costs.
  • EDI helps maintain client relationships by enabling companies to adapt quickly to changing customer needs.
  • Data is transmitted in real-time, enabling faster and better decision-making.