As an example, assume a business is sending a purchase order to a supplier. Without Electronic Data Interchange they would create a purchase order, print it and send it to the supplier by mail. The supplier would take the purchase order, manually key it into their computer for tracking and ship products to the customer along with an invoice. With Electronic Data Interchange the entire process can become electronic with the customer generating a purchase order that is sent via Electronic Data Interchange. The supplier in turn takes the received electronic document, sends products to customer and an invoice also using Electronic Data Interchange. Depending on the configurations used, the entire process can be electronic when using Electronic Data Interchange.
The principle behind Electronic Date Interchange may seem similar to numerous digital information transfer strategies, but EDI is unique in that it provides a highly secure data transmission solution used only by the business and its partners (suppliers, retailers, warehouses, etc). EDI exchanges are therefore faster and more secure than human-readable formats. Here are the EDI processes commonly used:
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