Top FAQs About EDI for Beginners - Part 4

Q31. How is EDI integrated with ERP systems?

Answer:
EDI middleware maps EDI messages into ERP-readable formats. For example, an 850 Purchase Order can be translated into an SAP Sales Order or Oracle Purchase Entry, enabling seamless automation.

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Q32. What is the difference between Direct EDI and VAN-based EDI?

Answer:

• Direct EDI (Point-to-Point): Companies connect directly via secure protocols like AS2.

• VAN-based EDI (Value-Added Network): A third-party network routes, stores, and forwards EDI messages. VAN adds tracking, auditing, and mailbox features.

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Q33. What is EDI Compliance Testing?

Answer:
EDI compliance testing ensures that a company’s EDI messages meet trading partner’s format, standards, and rules before going live. Retailers like Walmart, Amazon, and Target require suppliers to pass compliance certification.

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Q34. What is an EDI test file, and why is testing important before go-live?

Answer: 

An EDI test file is a sample transaction (e.g., PO, invoice) exchanged between partners to validate formatting, data accuracy, and system integration. Testing prevents costly errors during live operations.

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Q35. What is the difference between real-time and batch EDI processing?
Answer:

• Real-time: Transactions are sent and received instantly (e.g., AS2 or API-based EDI).

• Batch: Multiple transactions are grouped and transmitted at scheduled intervals.

Q36. What is an EDI Trading Partner Agreement (TPA)?

Answer:
A TPA is a contract between two businesses that defines EDI standards, protocols, schedules, error handling, and security rules. It ensures smooth electronic data exchange without misunderstandings.

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Q37. What are APIs in EDI Integration?

Answer:
APIs (Application Programming Interfaces) are modern alternatives/complements to EDI. They allow real-time, JSON/XML-based data exchange (e.g., via REST APIs) and are often combined with EDI in hybrid integration models.

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Q38. What is the difference between EDI 940 and EDI 945?

Answer:

• EDI 940 (Warehouse Shipping Order): Sent by the seller to instruct a 3PL/warehouse to ship goods.

• EDI 945 (Warehouse Shipping Advice): Sent by the warehouse back to the seller confirming the shipment.

Q39. How does blockchain relate to EDI?

Answer: 

Blockchain can enhance EDI by providing secure, immutable records of transactions, improving transparency in supply chains, and preventing data tampering.

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Q40. What are the key risks in EDI implementation?

Answer: 

Risks include incorrect mappings, security breaches, lack of trading partner compliance, high upfront costs, and failure to integrate with ERP/WMS systems.