EDI (Electronic Data Interchange)

What Is EDI (Electronic Data Interchange)?

EDI, or Electronic Data Interchange, is a standardized format for exchanging business documents, like purchase orders, invoices, and shipping notices, electronically between companies' computer systems, without manual re-entry.

How Does EDI Work?

Trading partners agree on standardized EDI document formats (such as EDI 850 for purchase orders or EDI 856 for advance shipping notices) and exchange them directly system-to-system, often through a value-added network or EDI provider. This replaces manual processes like faxing or emailing PDFs, reducing errors and processing time.

Common EDI Documents in Supply Chain

• 850: Purchase Order
• 810: Invoice
• 856: Advance Shipping Notice (ASN)
• 214: Shipment Status Message
• 997: Functional Acknowledgment

Why EDI Matters

EDI remains the backbone of B2B data exchange in supply chain and retail, many large retailers require EDI compliance from their suppliers as a condition of doing business. While newer API-based integrations are increasingly used alongside it, EDI's standardization and broad adoption make it unlikely to disappear from core supply chain data exchange anytime soon.