What is Electronic Data Interchange(EDI)

What is EDI

EDI stands for “Electronic Data Interchange.” The practice involves using computer technology to exchange information – or data – electronically between two organizations, called “Trading Partners.” Technically, EDI is a set of standards that define common formats for the information so it can be exchanged in this way.

Processes that used to be completed manually with paper have been replaced with an invisible, electronic flow of formatted data.  EDI has replaced paper forms of many documents, including invoices, bills of lading, advance shipping notifications, student transcripts, healthcare claims and many others.

Many businesses, government agencies and other organizations use EDI every day in the regular course of business. That’s because EDI makes doing business together a more automated and efficient process. Plus, digital technology can help ensure greater information security compared to paper documents.

How EDI Works – the Process

For the most part, EDI-based transactions are really the same as their manual, paper counterparts. The difference is that the EDI transactions are sent and received electronically, as packets of data formatted according to EDI standards.

There are effectively three major processes involved in the exchange of EDI data: mapping, translation and communications.

• Mapping involves transforming an EDI document into another format (such as XML, a flat file, a delimited file, etc.) or vice versa. Mapping is essential for proper system integration.
• Translation is the process of accepting inbound EDI data, or preparing an outbound file for transmission.
• Communications refers to the transmission of the EDI transaction. This can be done indirectly, through an external clearinghouse or VAN (“Value Added Network”) or direct via AS2 using EDI software, a web-based EDI tool or outsourcing with an EDI service provider.

Why You Need EDI – the Benefits

For many companies, EDI is really not a choice. It may be a requirement of doing business with larger organizations, including big retailers, manufacturers and government agencies.

Once you are communicating via EDI, the door is open to maximizing its value to your business. By integrating your EDI workflow with your back-end business or accounting system, you can streamline the entire process of how information flows through your organization. The benefits can be tremendous, including:

• Lower costs – By reducing the manual keying of data, handling of documents and other processes, you can potentially reduce the costs of labor and paper, and reduce errors (and their associated costs).
• Higher efficiency – Sending and receiving EDI data happens in seconds, and the information can be acted on immediately. This means time savings for you and your trading partners.
• Improved accuracy – You can reduce errors by using EDI because manual and duplicate entry is eliminated. Everything flows untouched, leaving a trail for easy future tracking.
• More supply chain visibility – With EDI, product sales data, product inventory status, demand forecasts and other metrics can be shared with suppliers and their suppliers. This allows for better inventory management and supports just-in-time delivery.
• Enhanced security – Thanks to numerous communications protocols addressing encryption and other security issues, critical business or personal data may be exchanged with higher levels of security via EDI than by any other means.
• Greater management information – Because EDI data is electronic data, you have a source of information to guide management decisions or to mine for further analysis.

Item Categories in SD

Item Categories


Item categories control the behavior of items on the sales order – such as the billing relevance, whether schedule lines should be determined etc.


Defining item categories


Item categories are defined in the following path:


SPRO –> Sales and Distribution –> Sales Documents –> Sales Document Item –> Define Item Categories


2. Here you will be able to control the item category settings. Below are some key fields for item categories:



Completion Rule = mainly used for contracts to determine when an item is considered to be complete. For example, a contract can be made for 1000 units (this is the target value), with deliveries of 100 units every week. The item is not complete until 1000 units are delivered.


· Billing Relevance = Determines whether the items should be considered for order-related billing (i.e. Services), or delivery related billing (i.e. whenever products need to be shipped) or not relevant for billing (i.e. Proforma Invoices)


· Billing Plan Type = To determine milestone (i.e. in a project setting) or periodic billing (i.e. an internet provider bills it’s clients monthly, or periodically).


· Pricing = If pricing should be calculated


· Schedule Line allowed = usually, items that do not have schedule lines cannot be copied into a delivery. The only exceptions are text items.


· Item Relev. For Dlv = Determines if items are relevant for delivery. It is not necessary to check this if the ‘schedule line allowed’ box is checked, as by definition, having a schedule line means that it will be delivered. This field is mainly useful for text items


· Returns = If the item is for returns, check this


· Credit active = If the item is to be considered for credit management, select this


· Determine Cost = Indicates whether during pricing, the cost of the item is determined


It’s important to note that there is a distinction between the way item categories are determined on a sales order and on a delivery.


Sales Order Item category determination


In a sales order, item categories are determined as follows:


Default Item Cat. = Sales Document Type + Item Category Group + Usage + Higher Level Item Category

· Sales document type = The order type, as we discussed in our previous section of the website


· Item Category Group = Defined in the material master. The most basic setting is NORM


· Usage = This is automatically determined by the system based on what we are trying to do. This cannot be changed.


· Higher Level Item Category = This is only considered for variant configured materials (i.e. imagine buying a computer. The specifications for the computer are customizable by each individual customer, and thus are always different. This would be a variant configured material).


This is defined in the following path:


SPRO –> Sales and Distribution –> Sales Documents –> Sales Document Item –> Assign Item Categories

Delivery Item Categories


If a delivery is copied from an order with a schedule line, the item category used in the sales order is copied to the delivery.


For items not on the order that are only added on the delivery, the item category is determined from the table.


Item Cat = Delivery Type + Item Cat. Grp + Usage + Higher Item Cat.

Automatic e-Mail Confirmation

When a sales order that has been created on the web has been saved, this should trigger an automatic email confirmation to be sent out. The configuration is described below at a high level (primarily screen shots). In this example, a new output condition type is created, which will trigger the email confirmation for the order type(s) used for Internet orders.

This documentation does not cover the setup of the email server (Exchange, SendMail, etc.),RFCs, SAP Office, and development of the SAPscript form, since these are different at each site. This document covers the configuration required within the SD module of the R/3 system to trigger the generation of output via email. 

1.1        Condition Type ZEXT

IMG menu path:

Sales and distribution > Basic functions > Output control > Output determination > Output determination using the condition technique > Maintain output determination for sales documents > Maintain output types

 1.1.1       General data:

 

 

The access sequence ensures that this output will only be used for Internet orders. This assumes that one or more order types are used exclusively for Internet processing.

1.1.2       Default values:

 

 

The default values indicate that the output is triggered immediately when the order is successfully saved. Standard-delivered settings were used for the Internet mail.

 1.1.3       Print:

 

 1.1.4       Archiving:

    

 1.2        Add Condition Type ZEXT to Output Procedure V10000

IMG menu path:

Sales and distribution > Basic functions > Output control > Output determination > Output determination using the condition technique > Maintain output determination for sales documents > Maintain output determination procedures

 

 

The new condition type is added to the order output procedure, with the requirement of order confirmation.

 1.3        Assign Procedure/Condition to Sales Order Type

IMG menu path:

Sales and distribution > Basic functions > Output control > Output determination > Output determination using the condition technique > Maintain output determination for sales documents > Assign output determination procedures > Allocate sales document header

   

 

The output is assigned to the order type used for Internet orders. The new condition type is the default output.

 1.4        Assign the Output Form to the Condition Type

IMG menu path:

Sales and distribution > Basic functions > Output control > Output determination > Process output and forms > Assign forms and programs > Assign to sales document

    

 

The SAPScript form that should be used for the output is assigned. The form used for email should normally be different from the output used for printing.

 1.5        Create Master Data for Condition ZEXT

Menu path:

Logistics > Sales and distribution > Master data > Output > Sales document > Create

 Select condition type ZEXT:

 

 

This information specifies (as master data) for which sales document types the email confirmation should be sent. The email address must be in the sold-to party master record