“EDI – an indispensable tool for the automotive sector”

In such a competitive field as the automotive sector, business processes can really make a difference. We are talking about an industry personified by the “Just in time” working system, coordinating with suppliers to minimize warehouse stocks and consequently reduce the financial exposure, all without losing effectiveness and efficiency. This is one of the reasons that make Electronic Data Interchange (EDI) a key technology.

“The automotive industry works with a multitude of highly specialized suppliers who, in practice, operate as one company, in such a way that if a part fails to arrive at the right time, the entire production chain is paralysed,” explains Santiago Estival, Key Account Manager at EDICOM in Italy and in charge of the sector. This business process provides some clues about why automotive companies were the first to implement EDI technology.

Today, EDI is fully ensconced. “EDI is an indispensable tool for the automotive sector.” Major companies demand its use from their first level or TIER 1 suppliers, who in turn require it from TIER 2, and so on,” says the EDICOM Key Account Manager. One of EDI’s main advantages is that it adapts to the needs and technological capacities of each company. Santiago Estival explains how EDICOM develops integrated EDI platforms for customers such as Nissan or Michelin that conform to the multiplicity of protocols, formats and standards (EDIFACT, Odette, X12, etc.) from a single interface.

A highly specific sector

In the automotive industry, logistical or production-oriented messages such as DESADV or DELFOR are particularly important. But that is not the only peculiarity. This sector’s most notable feature is the OFTP communications protocol, which was specifically created for European automotive companies. Hence, unlike all the others, it makes it possible to exchange really large documents such as AutoCAD files, widely used in the sector.

Odette is currently developing a new version of this protocol. As a member of the OFTP2 working group, EDICOM puts forward proposals for implementing technical improvements and enhancing security “We are deeply involved with Odette. In fact, we also take part in the e-invoicing working party”, adds Estival. Likewise, many automotive companies have also incorporated this technology for compulsory use with the Italian Public Administration. In addition, further growth is forecast for the years to come, as the Italian Government will be offering tax incentives to companies that switch to this technology.

Sector technology event

November 30 and December 1 are the dates of the Odette Annual Conference and Exhibition in Munich, a showcase event where technology and logistics come together once again. EDICOM will be there at stand number 11, demonstrating the most cutting-edge solutions in EDI and electronic invoicing.

 

EDICOM links up with major Russian retailers

We are witnessing a world of increasingly global trade where borders are diluted. The spread of communications has encouraged many companies to take the leap into foreign trade or expand their destination countries. With 143 million people, Russia is one of the largest potential markets worldwide. But how is it possible to manage an EDI relationship there?

In certain sectors, especially in retail,the use of electronic data interchange is indispensable. To be able to connect with distributors in that country, many European multinationals believe they should have a local EDI solution, due to the specifications and requirements of the Russian market. However, this is no longer necessary, as EDICOM’s EDI Platform automatically adapts to the requirements of any country worldwide.

When it comes to retail in Russia, EDICOM’s EDI solution has the capacity to connect with some of the country’s major retailers:

e-Invoicing peculiarities
In transactions exchanged via EDI with Russian retailers, e-invoicing is fast becoming one of the most significant factors. As is happening in the rest of the world, its use is spreading thanks to the lower economic costs and simplified operations.

The Russian e-invoicing system sets out some restrictions, such as the use of XML standards tagged in Russian, or the use of local service providers to handle message sending, signature of documents with local certificates, or integration with the Russian tax authority through the exchange of different ACKs. To this end, EDICOM maintains collaboration agreement with local entities in the country that guarantee the provision of an integral service for the exchange of a complete flow of EDI transactions with any Russian retailer.

Guarantee of a global partner
At EDICOM, our work is focused on making international expansion easier for our clients. Through EDI platforms and electronic billing, companies now have the chance to operate automatically with any company from any country, with no need to install local solutions in parallel.

With projects up and running in over 60 countries, we are a leading technological company with a strong international presence and proven ability to keep all our solutions in force, updating them in line with the particular features of practically any country in the world.   This way, multinationals can integrate 100% of their communications in a single point, saving time and money.

Sources:
http://www.edicomgroup.com/solutions/edi/what_is.html
http://www.edicomgroup.com/solutions/einvoicing/what_is.html
http://newsroom.edicomgroup.com/en/2014/11/17/edicom-extends-service-coverage-in-russia/

Spanish Public Administration receives almost 5 million e-invoices

From January to October, 4,630,681 e-invoices were submitted via FACe, the general point of entry to the Administration. These data from the Ministry of Finance and Public Administration (MINHAP) evidence gradual consolidation of this technology in Spanish companies.

The figures are corroborated by those released by the EDICOM Permanent e-Invoicing Observatory. According to this analysis, the platform run by EDICOM, one of the main e-billing service providers in Europe, handled 2287463 e-invoices issued to the different Spanish administrations. The figure includes bills submitted via the FACe entry point (general point of entry for e-invoicing managed by the General State Administration), as well as those received through entry points created ad-hoc by some administrations.

“Spanish legislation allows public administrations to manage their bills through FACe or create their own points of entry. Both options are possible and, in many cases, complementary,” explains Miguel Soler, EDICOM Facturae platform Product Manager. In fact, of all the e-invoices that have been issued through EDICOM’s Facturae platform, 45% were forwarded to own points. The rest account for 30% of all documents registered by FACe in this period.

After the General State Administration, the entry point that receives most e-invoices is that of the Catalan autonomous community, representing 10.6% of all documents issued by the EDICOM Public Administration HUB. The entry point of the Andalusian Regional Government (9.1%) takes second place, followed by those of the Xunta de Galicia (8.8%) and the Basque Country Health Service, Osakidetza (7.6%).

 

Ongoing development

Remember that as of last January 15, Public Sector suppliers and service providers are required to use this mandatory technology in their business relations with the Administration. In this sense, the reports from the EDICOM Permanent e-Invoicing Observatory and MINHAP both point to progressive growth in the first months of the year. “The EDICOM platform data show that the number of invoices more than tripled between February and October, an ongoing uptrend that was also observed by the FACe”, adds Miguel Soler.

 

Operational advantages

The introduction of e-invoicing in the Spanish public sector responds to a global trend towards digital management. “Many countries around the world are rolling out this technology due not only to the reduction of economic costs, but also its working benefits”, says Miguel Soler from EDICOM.

The government estimates that businesses are saving 0,70 euros on each invoice since they began using electronic channels. Moreover, the General State Administration is expected to benefit annually by more than 50 million euros. But beyond economic aspects, e-invoicing makes complying with tax obligations simpler, with shorter turnaround times and other added benefits, such as the possibility of checking the status of your invoices at any time.

 

Further information on Facturae and its implementation at www.facturae.com


The EDICOM Permanent e-Invoicing Observatory analyses the rollout and development of e-invoicing in more than 60 countries worldwide.

EDICOM is a Spanish multinational specializing in e-invoicing and electronic data interchange (EDI) with offices in 8 countries around the world. Founded in 1995, today it is a major technology benchmark and leader in data integration solutions, providing services to over 15,000 customers worldwide.

Get to know the people who make up EDICOM

At EDICOM we believe that the true driving force of the company are its people. A powerful team of professionals, growing day by day with the company’s international expansion.

In our company, who we are is necessarily linked to what we do.  We are a group of highly qualified professionals tackling complex international B2B projects

In these 20 years, we have achieved significant business milestones, opened up offices halfway round the world, developed EDI and e-Invoicing projects in over 70 countries and implemented solutions for more than 14,000 customers. But always with a value that characterizes us and makes us different, our people.

Find out in this short video about the people that make up EDICOM and make life easier for more than 14,000 people worldwide.

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EDI ACADEMY – What do we need for EDI?



Now that we know what EDI is, and how and why it came into being, it is time to take a more in-depth look at how it works. In this second chapter of EDI Academy, we shall see the components necessary to implement this system.

Stakeholders

The essence of an EDI relationship is the stakeholders taking part in it. Although, as we explained, EDI was created to provide a solution for business partners in the automotive industry, today it extends to all kinds of sectors. Moreover, EDI is not only used by private companies, as the technology is also increasingly implemented in administrations, institutions and other public bodies.

The standard

Standard language is what mainly defines electronic data interchange Indeed, it was the development of common rules which led to the creation and spread of this technology, as the huge variety of processors and operating systems had previously hampered communications.

There are different types of EDI standards worldwide, some of them intentionally developed for specific industries and other generic ones, such as EDIFACT (the most widely used in Europe) or ANSI X12 (more common in the US).

Among other aspects, the standards state the information required for each type of document, the order in which it is presented, the format and meaning of the data (for example, in X12 “TO” stands for “ton”).


Software

To be able to construct and manage the messages, both sender and receiver must have an EDI solution. In general, this type of platform should include the following functions:

  • Mapping or conversion The solution must be able to translate the messages sent into the EDI standards recognizable by each partner.. The same goes when receiving messages.
  • Integration with the ERP To facilitate and automate transactions, the EDI platform should be integrated with the company’s internal management system so that each message sent or received becomes part of it. Integration is one of the most costly process when it comes to rolling out a solution of this kind. This is why, for smaller companies, alternative non-integrated EDI web platforms have been developed that require no installation, but in which the process is more manual.
  • Security There are several ways to ensure data confidentiality and integrity. Everything depends on the degree of security the company needs to deploy. In this sense, we are talking about everything ranging from basic user and password checks, as in EDI web solutions, to the data encryption, electronic signature or rejection of received messages included in advanced EDI platforms.
  • Data management and maintenance Ideally, the software should control the message flow automatically. In other words, once the message is created in the ERP, it should be able to recognize the recipient and adapt the message to their stated requirements. In reception, the process works in reverse, so the information is stored without human intervention.
  • Communications This is another of the more complex points of an EDI solution. For the platform to be truly successful, in addition to multistandard it must be multiprotocol and interoperable. We shall study this point in greater detail below.

Communication media

We know who takes part in an EDI relationship, what the messages exchanged are like and how the software works, but how does sending take place? They are different options available, which vary depending on the type of message to be sent, the volume, security, speed… For example, privately leased point-to-point lines, public telephone networks or internet. Nevertheless, the option most widely used is value added networks, also known as VANs.

In this case, no direct communication with reception takes place; instead, each user has a mailbox where the message is deposited. Once it is ready, the recipient can access it. One of the main advantages of this communication system is that, with a single call, it is possible to send all the messages we want and also pick up all those received by the trading partners. In addition, all calls made by a VAN are local, even if the destination is abroad, so the cost is lower than for a phone line, for example.

The main drawback of added value networks is that they require the sender and recipient to be part of the same VAN to be able to communicate. In this sense, the interconnection capacity of the platform and the EDI service provider is crucial, since agreements with other networks are essential for this medium to work properly.

Nowadays, one of the most powerful VANs in the world is EDICOMNet, thanks to its high degree of interoperability. Through it, more than 13,000 customers exchange around 400 million business transactions every year.