How EDI Helped Santa Deliver Presents This Christmas

We’re delighted to introduce an exciting new feature on our blog! Beginning with this post, we are peer reviewing all intellectual content in a blind review format.

That’s a standard scientific approach for ensuring the quality of our published material. When we receive each piece from its author, we send it to a reviewer with expertise in the subject matter. The reviewer communicates concerns and suggestions to the blog editor and publisher, who holds independent discussions with the reviewer and the author.

The author then revises and resubmits a final version for publication. Throughout the process, the author and reviewer remain anonymous to each other.

To the best of our knowledge, we’re the first academic institution anywhere to adopt a standard policy of blind reviewing intellectual content for a blog. The process does indeed require more effort … but it’s a small burden to bear for scientific integrity!

And without further ado, here is our first-ever peer reviewed blog posting:

lampreyThis past year, for the first time ever, online sales in the U.S. surpassed in-store purchases. An annual survey by analytics firm comScore and UPS found that U.S. consumers are buying more items online than in stores. The survey, now in its fifth year, polled more than 5,000 consumers who made at least two online purchases in a three-month period.

According to its results, shoppers now make 51% of their purchases online, compared to 48% in 2015 and 47% in 2014. Cyber Monday achieved a new record this year, with $3.45 billion spent online, a 12.1 percent increase over 2015. This was the largest online sales day ever in the United States.

Most people have become very comfortable with, and even reliant on, buying products online. For many of us, it is now our preferred method of purchasing goods.

Are you aware of what is working 24/7 “behind the scenes” to streamline and automate the entire process? No, it is not Santa’s Workshop of Elves! It is a technology called Electronic Data Interchange (EDI), and it has been deployed by companies for decades, long before the Internet became a household word.

In fact, EDI helps us without any one even knowing it! For instance, each time we visit our doctors, when they file claims with our insurance companies for payment, the requests are transmitted electronically using EDI. And when we use Tax Software to prepare our tax returns and hit the Send key to transmit them to the IRS, the software converts our data into an EDI format and delivers the content electronically in seconds.

EDI communicates business transactions between Trading Partners via documents in standard electronic formats. The data that is generated from each transaction is “mapped” onto EDI data segments and then transmitted between Trading Partners. When data is received by the Trading Partners, the EDI data segments are “mapped” to their application files, and the data is processed accordingly. When set up properly, this can all be accomplished without any human intervention.

So how does EDI help with online ordering? Online Retailers rely on numerous suppliers to stock adequate inventories of the items they sell to consumers. They require their suppliers to ship the items directly to us. Even mighty Amazon does not stock all of its items for sale in its own warehouses!

Suppliers use electronic catalogs (in EDI, we call them 832 Catalogs) to post their items online with product descriptions, pictures, and pricing information. This information can be used to populate the item information on web sites. The suppliers send their available inventories (via 846 Inventory Inquiries / Advices) to the online retailers so they can communicate, on their web sites, how many of each item remains for sale.

When we place an order, the web site sends it to the supplier via an 850 Purchase Order, with codes to indicate that the order should be drop-shipped directly to us. The supplier acknowledges to the retail web site system via an 855 Purchase Order Acknowledgement that the order was received, and that it can ship the item.

When our order is ready to ship, the supplier sends all of the shipping information to the online retailer via an 856 Advanced Shipping Notice. It then sends us a “Your Order Has Shipped” e-mail message. The supplier also sends the online retailer a bill for the item shipped via an 810 Invoice.

There is even an EDI document, called an 820 Remittance Advice, that informs the supplier that payment has been made. It can also instruct the retailer’s bank to initiate a funds transfer to the supplier.

Faster than Santa can lay his finger aside of his nose, give a nod, and rise up the chimney, EDI can help to make sure that our orders are processed and delivered in time to place under the tree for Christmas morning.

This article has been re-posted on Faith’s web site. Please feel free to visit her there!

Faith Lamprey