EDI stands for Electronics Data Interchange. Officially, it is Electronics Business Data Interchange (EBDI), but the "Business" part of the title is often left out. EDI refers specifically to the exchange of business data. It defines the format and data content of business documents, like purchase orders, so that both the buyer's and seller's computers can process them, typically, at an enormous savings in data entry costs.
There are currently two EDI standards-setting groups in the United States: the TDCC and ANSI X.12 Committee. The worldwide standard-setting body for EDI is EDIFACT (part of ISO); EDIFACT standards are just beginning to be developed but are moving quickly. EDIFACT and ANSI are working toward compatibility.
TDCC, a transportation industry standards group, originally began developing EDI standards and then asked ANSI to endorse standards for all industries. TDCC and ANSI use a common data element dictionary, but they build their transaction sets differently.
Industries, other than transportation, use the ANSI standard. The standard is very large and general because it has to meet the needs of all businesses in the USA. Specific industry groups, such as EIDX for the electronics industry, use the ANSI standards but decide which optional segments and elements are used for each transaction set. Also, the industry groups select which table values to use. For example, ANSI has several hundred unit of measure values that may overlay, such as each, piece, box, set, unit, and so on. EIDX has adopted each as the only unit of measure the electronics industry needs. These industry groups simplify exchange within the industry.
The structure of an EDI message is:
1) Transaction Set is equivalent to a business document, such as a purchase order. Each transaction set is made up of data segments. Transaction sets are listed in Transactions Set Tables.
2) Data Segments are logical groups of data elements that together convey information, such as invoice terms, shipping information, or purchase order line. Data Segments are listed in the Data Segment Directory.
3) Data Elements are individual fields, such as purchase order number, quantity on order, unit price, and so on. Data Elements are listed in the Data Element Directory.