EDI implementation involves setting up electronic data interchange systems to automate data exchange, improve accuracy, and facilitate communication.

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The most used EDI messages in the supply chain management

This post was updated to reflect current trends and information.

In this article, we want to talk about the top EDI messages commonly used by trading partners in supply chain management. We will explain the purpose of the EDI messages and their benefits.

What is EDI?

The acronym of EDI is Electronic Data Interchange. The main objective of EDI is to replace the exchange of paper-based business documents.

EDI is the exchange of structured business documents used in B2B. The implementation of EDI is almost limitless. EDI is present in every commercial activity:
– supply chain management
– e-commerce
– Warehousing
– Insurance
– Banking and finance
Electronic data interchange (EDI) is helping businesses to automate specific business processes, as well as to cover an entire cycle of logistics.

What does EDI mean in logistics?

In short terms, an EDI is a flow where one business partner can create digital and electronic “business documents”, compliant to a specific standard (i.e. X12, EDIFACT, Tradacom, RosettaNet,) and transfer to the second party in a secured telecommunication channel.

Useful: eBook:  EDI – Key Information You Need to Know

The most commonly used set of EDI messages

Top EDI messages

Following is the list of o the most commonly used EDI transaction sets used in today’s business space, from supply chain management to e-commerce, you will find the following documents as the basics for EDI exchange:

– EDI 846 Inventory status
– EDI 850 Purchase Order
– EDI 855 Purchase Order Acknowledgement
– EDI 856 Ship Notice/manifest (ASN)
– EDI 860 P/O Change
– EDI 810 Invoice

The above EDI messages, called “must-have” because they are necessary to automate the most important trading cycle in the supply chain management, eCommerce, and Drop-ship space.

Many companies do not limit themselves only on the above EDI messages, they can decide to leverage other transactions and business documents to improve their supply chain effectiveness; as an example, they can request to add the 753, 754, and other documents related to pickup and delivery…

Useful: EDI Transaction Types – Complete List of EDI Transactions

EDI messages types

EDI 846 Inventory status

Most trading partners in the supply chain and eCommerce space, request that their suppliers update them with their inventory status by sending the EDI 846 document. You can check the details about this document in this article.

EDI 850 Purchase Order

Often, this is the first type of EDI message that companies such as retail chains, manufacturers, warehouses, or 3PL-providers to exchange when they switch to EDI.

EDI 850 contains:

  • Order number
  • Required date and time of delivery
  • Reference to the contract or contract number
  • Price
  • Sender and customer information, the place of delivery
  • Information on the contents of the order (bar codes, quantity, the name of the goods, multiplicity of packaging).

With the EDI 850, the product ordering process goes faster and becomes cheaper as the number of people involved in the process is reduced. Thanks to the fast and guaranteed transfer of information about the order, the supplier improves the reliability of the deliveries.

EDI 855 Purchase Order Acknowledgement

EDI 855 response to the Purchase Order is a “couple” message for EDI 850. The supplier sends EDI 855 to the buyer in accordance with the order value or suggesting to make changes regarding order quantities. This helps to avoid disruption in the supply chain.

Useful reading: What is EDI 855 Purchase Order Acknowledgment?

EDI 856 Ship Notice/manifest or ASN

ASN is a pair of EDI 861 Receiving Advice.

These notifications are exchanged between the business partners at the stage of shipment and receipt of the goods.

The supplier sends ASN immediately after the shipment. This EDI message helps to simplify and speed up the process of acceptance of goods. EDI 856 Ship Notice/manifest contains detail shipment information:

  • Shipment information (bill of lading number, ship to, ship from, etc.)
  • Unit load information about a physical shipping item.
  • Order information such as purchase order number, buying place, division number, etc.
  • Tare information about the pallets.
  • Pack information about the shipping package (cartons, racks, bags, etc.,)
  • Item information about the shipped goods, such as SKU identification, quantity shipped, etc.

Companies that have implemented ASN significantly increase the speed of receiving goods and entering data into the business system – with EDI 856 you do not need to drive numbers manually from the invoices. ASN information can go directly to the business system.

For the big trading retailers, this type of EDI message is a vital necessity. Advance notification of the goods delivery helps to prepare for its acceptance. Even before the supplier’s truck arrives, the retailers already have a list of the goods sent.

EDI 860 Buyer triggered P/O change

EDI 860 is a transaction sent to the supplier advising him about a change in the Purchase order sent earlier. The change can be to increase/decrease/delete quantities on an order or to change dates.

EDI 810 Invoice

EDI 810 Invoice is an electronic invoice transaction sent by the supplier to the buyer.

Learn more about  x12 810 Invoice in this article: What is an ANSI ASC X12 EDI 810 invoice?

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Contact us today for more information and for pricing.

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Related Posts:

What is EDI 846 document?

What is EDIFACT? | UN / EDIFACT standard overview

Electronic Data Interchange: Key Information You Need to Know

What Are the Differences Between ANSI X12 and UN/EDIFACT

A must-have guide for a successful systems integration with EDI

The concept of Electronic Data Interchange (EDI) is still very abstract for a business owner up until today. More often, as soon as an SME (small to medium-sized enterprise) is requested by an important partner to comply with the electronic data interchange process or do EDI, everyone gets into a big pig panic inside the enterprise, and all reinforcements are being called to help with such a project.

Why EDI Integration Projects Often Turn Into a Headache

Large retail chains are critical customers for many small and medium-sized businesses. Complying with their requirements isn’t optional—it can make or break a partnership. And since these retailers communicate almost exclusively through EDI, integrating it correctly is non-negotiable.

Yet many companies underestimate what it takes. Diving into EDI integration without a clear understanding of your own processes and specific business needs often leads to delays, errors, and frustration. In short: without proper planning, EDI projects can quickly become a nightmare.

Recommendations and Steps for a Successful Integration

EDI technology can have a bigger impact on a company’s business processes than almost any other IT solution. That’s why EDI integration projects need to be carefully planned and executed, following a clear, structured approach.

Here are the key steps to ensure a smooth and successful integration:

Step 1: Preparation of an EDI implementation team

It is essential that senior management be involved in any EDI integration project and implementation, at least at a high level.

Ideally, the EDI implementation team should include representatives from different departments, such as operations management, sales, and information services.

It is important for the team to design together a good flow of information, so everyone understands the issues, the scope, and the benefits of the project. A project manager should be assigned to take charge of such a mandate.

Step 2: Setting a project timeline

The implementation team should set an ETA and develop a plan with a complete list of tasks, resources required, and delivery estimates.

Step 3: Choice of standards

While the choice of standard of EDI format and communication protocols is very limited, this phase consists on just reviewing and making sure all specs and documentations are in place for the kick-off.

Step 4: Choice of documents for EDI transaction

Often, trading partners specify the EDI standard and the type of documents they will send or accept. Sometimes partners use only a few of the possible documents such an Invoice EDI 810 form and purchase orders EDI 850 form.

Step 5: “On premises” or “cloud” based or EDI Web Sevice?

There are many ways to do EDI. It is depending of the anticipated transaction volume, or the size of the business. Going with a software solution deployed “on-premises” or adopting a “cloud based software” or maybe EDI Web Service

♦ The Cloud-based EDI Service is an excellent solution for Small and Medium-sized enterprises that do not have a budget for large EDI projects, and who do not have experienced staff with EDI exchange.

USEFUL: Learn more about EDI Solution as a Service for SMEs 

♦ The other way to get the most out of EDI, is by adopting a full EDI integration with your internal software management system like your ERP, CRM etc.

♦ EDI2XML Web Service, is for developers and businesses, interested in building their own EDI (Electronic Data Interchange) integration flows and programs. Normally, these individuals, are capable of interacting with external API and Web Services to translate EDI to XML and XML to EDI, and have the resources and expertise to work with Web Services and HTTP requests in order to achieve their goals. EDI2XML web service, is the premier choice for IT people as a reliable service to accomplish such integration projects.

Step 6: File Integration or direct system integration

When it comes to integration, the implementation should be decisive on how the integration to their CRM/ERP is going to happen: there are (2) methods to do such an integration; either through file integration, Where the ERP has already some built-in jobs to import data based on specific format, or direct integration. Obviously, this decision is also dependent on whether the software management system is a legacy system or a modern one, fully loaded with all kinds of API and programming interfaces. This part can be the most difficult and lengthy part, unlike what most people think…

Step 7: Integration project testing

Pilot projects are conducted both within the company and with external business partners. EDI test should be of a specified duration. They will help identify possible loopholes and establish a problem-solving plan. Technical employees should be trained in the technical aspects of EDI.

Step 8: Setting up

The implementation of the EDI system must be combined with several factors in order to be successful: adequate users training, proper implementation plan, and establishment of an emergency procedure.

For small to medium-sized enterprises, EDI integration is a good deal. An Electronic Data Interchange (EDI) capable enterprise retains an important customer or supplier and have a lot of opportunities to enter into new contracts with large companies.

For many years, our EDI2XML service has been offering up-to-date integrated solutions at an affordable cost. We have been helping companies of all sizes, to optimize operations and improve their competitiveness.

cta_edi2xml

How does EDI2XML work ?

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How does EDI2XML work?

In simple terms, EDI2XML is a converter from EDI X12 format to XML format. The result XML format file is based on a pre-defined schema (xsd); we call it our “EDI2XML format”. Here is a very simple graphical description of the EDI2XML engine “in action”.

EDI Platform

Read: What is EDI ?

EDI2XML can work in two directions by changing a little switch when executing the command:

  • Convert incoming EDI X12 files to XML format
  • Convert outgoing XML format files to EDI format
For incoming EDI files, after a raw X12 EDI file is received using communication software and the EDI2XML engine is triggered, the following actions are executed one after the other:
– EDI2XML will verify the structure of the received file to make sure it is a valid raw EDI X12 format file
– If the raw EDI X12 file is valid in terms of structure, it will run another path to eliminate any information not considered part of EDI; for example, some headings and footers sent through the EDI VAN are automatically cleaned as it does not relate to any business information exchanged with the EDI partner
– The engine is smart enough to split a batch of incoming EDI files inside the same physical file, by envelop (ISA) and by ISA id, as a preparation for the conversion to XML, regardless of its EDI standard and revision
– Once all of the above is completed, the engine would generate for each one of the EDI files an equivalent XML formatted file.
The EDI2XML engine works a little differently when converting raw X12 files from an XML format. Once the engine is triggered with the option to convert XML to EDI X12 format, it will do the following actions:
– For each XML file found, EDI2XML will validate its structure and find out if it is well formed, to make sure it is compliant with edi2xml format and schema
– For each valid XML file, the engine will convert from XML to X12 raw EDI format
*It is important to note that the XML file should comply with a pre-defined xsd (or schema). All necessary information related to EDI versions and standards are sent within the XML file. For incoming and outgoing edi2xml formatted files, only files from the “ licensed” partners are being processed. Any EDI or XML file sent from/to an unlicensed partner will NOT be processed at all.

Read: How is EDI2XML licensed ?

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What is a VAN?

EDI Communication and VANs

What is a VAN ?

A Value Added Network (VAN) is considered the “post office” where business partners can collect and sort EDI documents coming through. As of today, a considerable amount of EDI transactions are still going through VANs, however this number is always in constant decline considering the popularity of the internet, its reduced cost as well as the level of security someone can implement with internet communication protocols. Most of the “major players” in the retail industry, have switched to a point-to-point communication of EDI files and transactions using one or many of the following secured communication protocols for a point-to-point EDI exchange:

FTP (not secured – plain text)

sFTP

Https

AS2

AS3

telnet

“bisync modem” to communicate through a value added network (VAN). This is the oldest method of secured communication.

VAN vs Direct EDI Communication

Communication Method Description Security Cost Usage Today
VAN 3rd-party network that stores, routes and manages EDI messages High (managed by provider) High Declining, but still used in government, healthcare, and legacy systems
FTP Basic file transfer (unencrypted) ❌ Not secure Low Not recommended
sFTP Encrypted file transfer ✅ Secure Low Common
HTTPS Secure web communication ✅ Secure Low Popular
AS2 Real-time encrypted transmission over internet ✅ Very secure Low Industry standard
AS3 File-based (FTP-style) but secure and standards-based ✅ Secure Low Less common
Bisync modem / Telnet Legacy dial-up communication methods Obsolete High Rare (legacy systems only)

Should You Still Use a VAN?

While VANs still serve a purpose — especially in industries like healthcare and government where legacy infrastructure and compliance are key — most businesses now prefer AS2, HTTPS, or sFTP for faster, cheaper, and more flexible data exchange.

If you’re evaluating EDI communication options, consider the following:

  • How many partners still require a VAN?

  • Do you need full audit trails, data backup, and message tracking?

  • Is your team equipped to manage point-to-point protocols like AS2?

At EDI2XML, we support both VAN-based and direct communication, offering our clients flexibility depending on their partners’ requirements and their internal capabilities.

Key Takeaways

  • A VAN is a secure intermediary for EDI document exchange but is declining in use.

  • Direct communication methods like AS2 and HTTPS are now preferred for cost, speed, and control.

  • Businesses often adopt a hybrid model to accommodate different trading partners.

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