ECommerce EDI

Toolkit


Version
September 2008
2
What is EDI?
EDI stands for Electronic Data Interchange
EDI is the electronic exchange of business data
using a published standardized format
Partners must agree on the format specifications
to be used when exchanging business
documents
EDI is intended to be a computer-to-computer
exchange
EDI enables efficient, accurate, and paperless
business flows
3
How Does EDI Work?
Standard electronic business documents are
communicated from an organizations computer,
through translation software, then to an
electronic post office, which is called a Value
Added Network (VAN)
The documents are then distributed by the VAN
to all the necessary trading partners
Trading partners receive the documents to
process through translation into their computer
applications
4
EDI Data Flow
5
Supply Chain
Typical Message Flows
Material Release
System
Material
Receiving
System
Accounts
Payable System
Accounts
Receivable
System
Material
Shipping System
Manufacturing
Planning System
Cummins Supplier
DELFOR
DESADV
APERAK
RECADV
$$$
INVOIC
REMADV
Update
Inventory
(MRP)
Bank
REMADV
$$$
6
Ship Notices
Cascading Benefits of
Electronic Information
Orders
Invoices
Price Catalogs
Invoices
Remittance / Payments
Evaluated Receipt Settlements
7
Sample EDI DESADV
UNB+UNOA:1+004154415:1+006415160:1+060919:1445+1855'
UNH+2775+DESADV:D:98B:UN'
BGM+351+00095093+9'
DTM+11:200609191444:203'
DTM+17:200609201444:203'
RFF+AAU:M00009107'
NAD+SF+004120::16++CUMMINS FILTRATION'
NAD+ST+792820524++CUMMINS CMEP+WALESBORO COMPONENTS
PLANT:WALESBORO EXIT, RL 22+COLUMBUS+IN+47201'
LOC+7+022'
RFF+PK:00095093'
TDT+20+00009107++LT+MHRE::182'
EQD+TE+530467'
CPS+1++4'
PAC+7++CTN25'
QTY+52:252:EA'
LIN+1++4944410:IN'
IMD+++:::IDLER ASSEMBLY'
QTY+12:1764:EA'
ALI+US'
RFF+ON:521019'
LIN+2++4944420:IN'
IMD+++:::IDLER ASSEMBLY'
QTY+12:1750:EA'
ALI+US'
RFF+ON:521019'
CNT+2:2'
UNT+26+2775'
UNZ+1+1855
8
Benefits of EDI
Timeliness is increased
Data can be exchanged 24 hours a day, 7 days a week
No delay due to physical mailing time
Customer service is improved
Electronic processes meet customer mandates and
maintain competitiveness
Data throughput time decreases to meet costumer needs
Bottom line costs are reduced
Data accuracy improves when manual process are
eliminated
Resources formerly spent reconciling variances and
entering data can be used to add value
9
Cummins
Business Expectations
Information flows are vital to the success of
companies in the global business environment
Cummins utilizes ECommerce tools to obtain
and communicate accurate, reliable, and timely
information throughout our supply chain
Cummins is committed to meet and exceed our
customers expectations
Cummins expects that our supply chain partners
will share our commitment to adopt world-class
business practices
10
Cummins
ECommerce Expectations
Cummins requires all suppliers to use Electronic
Data Interchange (EDI) to support business-to-
business (B2B) communications
Use of EDI EDIFACT message formats as
documented in the Cummins Implementation
Guides is required
11
Cummins
Standard EDI Documents
Sending
Partner
Business
Document
EDI
Message
Presented via
Traditional EDI
Format
Presented
via Web
Browser
Cummins Forecast / Orders DELFOR
Cummins Pull Signal DELJIT
Supplier Advanced Ship
Notice
DESADV
Cummins Receiving Advice RECADV
Cummins Data Error Notice APERAK
Supplier Invoice INVOIC
12
DELFOR
Delivery Forecast
Planning schedule with release capability
Sent by the customer, Cummins
Materials/production forecast by part number
May include firm order, planned, and immediate
requirements
Full schedule replacement will be sent no less
than once per week
Additionally, net change schedule for a part
number may be sent daily
13
DELFOR
Benefits
Allows direct download of delivery forecast data
into suppliers MRP system
Conveys Cummins material requirements in a
timely and accurate manner
14
DESADV
Despatch Advice
Advanced Ship Notice
Sent by the supplier
Contains list of contents in a specific shipment
All DESADVs must be received before the arrival of the
material at the Cummins plant
DESADV should be sent within 30 minutes of departure
from the supplier dock
Shipment identification (SID) number must be clearly
marked on all packing list documents
The SID number cannot be repeated within a 12 month
period
The purchase order number and part numbers on the
DESADV must match the purchase order
15
DESADV
Benefits
Allows direct download of advanced shipment
data into Cummins inventory receiving system
Reduces inventory discrepancies, material
shortages, and time spent correcting manual
errors
Provides receiving and materials personnel with
visibility of inbound shipments and reduces
orders to expedite
Avoids time and effort needed to sort through
non-standard packing slips to match receiving
documentation
16
INVOIC
Invoice
Invoice
Sent by the supplier
Allows direct load of invoice to Cummins
accounts payable system to increase accuracy
and reduce manual effort
Purchase order number and part numbers must
match the purchase order
The EDI invoice must contain identical data
when compared to the invoice of record in the
suppliers invoicing and accounts receivable
systems
17
INVOIC
Benefits
Eliminates the risk of an invoice being lost or
detained due to traditional mail routing
Reduces the costs associated with manually
processing invoices
10 full time analysts are needed to
process/resolve issues associated with an
average monthly volume of 35,000 supplier
invoices in Southern Indiana alone
Allows an automated reconciliation process
Improves data accuracy
18
APERAK
Application Error and Acknowledgment
Notification of error in DESADV or INVOIC
Sent by the customer, Cummins
Automatically notifies supplier of a data content
error in an EDI document and that the document
was not accepted into the customers system
Supplier is required to correct the error and
resend the corrected EDI document
19
APERAK
Benefits
Eliminates reconciliation errors within systems
Notifies suppliers of inconsistent or incorrect data
Supports Cummins common approach/best practices
and requires no manual intervention at the plant
Saves time and effort by eliminating the need for
materials planners/schedulers or finance managers to
follow up with suppliers due to simple data errors
Average time for materials planners/schedulers to resolve
each receiving error ranges from 60-90 minutes

20
Other
Messages
DELJIT
Delivery Just In Time
Supplement to DELFOR
RECADV
Receiving Advice
Part number / quantity discrepancy
PRICAT
Price Catalog
Up to date pricing information
REMADV
Remittance Advice
Electronic Funds Transfer (EFT)
21
EDI
Getting Started
Select Integrated EDI or Sterling Web Forms
Integrated EDI computer to computer transfer of data in
standard EDIFACT format (requires translation software
and a VAN connection)
Web Forms an EDI alternative that allows a trading
partner to send and receive documents using a web
browser through Sterling Commerce
Complete the Supplier Response Form
http://www.cummins.com/suppliers
Visit the ECommerce website for more information
http://www.cummins.com/suppliers
Contact the Cummins ECommerce Implementation
Team
Electronic.Commerce.Support@cummins.com
812-377-3441