EDI Communication Methods

EDI Communication Methods – Value added network

EDI Communication Methods serve to send and receive EDI documents. There are many different ways that companies have exchanged EDI data over the years. During the 1950s and 1960s, companies could mail mainframe punch cards or data tapes through the United States Postal Service. Then the telecommunications modem came. Then it went. As described in the networking and telecommunications section, most EDI data is now transmitted via high speed broadband internet through fiber optic cables.

Value Added Network (VAN) 

A Value Added Network (VAN) is a third party intermediary network between trading partners. It serves a role of being a broker and forwarder of EDI data. It can be compared to a traditional post office, but the exchange of mail is done electronically.

When a company contracts out to a VAN service provider, the company is assigned a mailbox. First, data is translated by the EDI software package. Then the communications adaptor initiates a connection to that VAN mailbox and uploads the EDI files to the VAN mailbox.

The VAN receives the files in the mailbox and forwards the files to the appropriate trading partners. For example, in the retail industry, a supplier company needs to send several invoices to several different retailers, such as Target, Sears and Home Depot. Instead of transmitting the invoices to three different places, the invoice is transmitted to one VAN mailbox.

The VAN’s role at this point is to forward the invoices to the VAN mailboxes belonging to those retailers. A similar process occurs for incoming EDI files. For example, when Target, Sears and Home Depot issue purchase orders, they send the EDI purchase orders to their own VAN mailboxes. The VAN distributes the EDI purchase orders to the supplier-company’s mailbox. The supplier company then connects to their mailbox and downloads the purchase orders created by the three retailers.

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