The History of EDI

E.D.I.
Electronic Data Interchange

Before the days of wide-spread EDI use, communication of business processes between companies was slow and error prone. Trading partners had to send each other paper documents in order to fulfill their requests. Slow processes, delays and errors were an obstacle for companies who wanted fast shipments, fast payments, and who valued accurate information exchange with their business partners.

EDI which stands for Electronic Data Interchange is the computer-to-computer communication of business documents between companies in a standard format. It is a paperless way to send and receive Purchase Order, Invoices, etc

 
 
Although EDI has been around for decades, finding a brief history of EDI in one place is surprisingly difficult. Here is a timeline of significant events. Comments about other events of note are welcome.

Early 1960’s

Ed Guilbert develops an electronic message format for sending information about cargo between Du Pont and Chemical Leahman Tank Lines. Guilbert expanded on the standardized shipping manifests he developed with other U.S. Army officers during the Berlin airlift of 1948.  

1965

The Holland- America steamship line begins sending trans-Atlantic shipping manifests using telex messages and converting the messages into tape that could be loaded into their computers. Previously, sending shipping manifests had been accomplished with paper. This helped begin the foundation of the EDI format. Telex is capable of sending a full page of information in about 2 minutes.

1968

Many oceanic shipping companies, airlines, railroads, trucking companies are using electronic messages for manifests but the many disparate formats are creating problems. The Transportation Data Coordinating Committee [TDCC] is created and begins work on developing standards.

1973

The FTP protocol is published. FTP stands for File Transfer Protocol and is a way to transfer files between computers. The transmission can be between any two computers that support the FTP protocol. File Transfer Protocol would emerge as one method for sending electronic messages between companies.  

1975

The first Electronic Data Interchange standards are published by the Transportation Data Coordinating Committee that was created in 1968.
Edward Guilbert is a major contributor to the standards and becomes known as the father of EDI. In the same year Telenet, the first VAN (Value Added Network) is established. Telenet provides a commercial data network and associated services.

1977

Several grocery companies begin an EDI pilot project with their business partners.

1978

The Transportation Data Coordinating Committee is renamed the Electronic Data Interchange Association. In the same year the association is chartered by the American National Standards Institute (ANSI). The association will become known as the ANSI X12 committee and will evolve the publication of EDI standards.

1981 

ANSI X12 standards are published for the first time and encompass the transportation, food, drug, warehouse and banking industries.

1982

Companies such as General Motors and Ford in the automotive industry begin to mandate EDI for their suppliers Several large retailers, including Sears and Kmart, begin to demand EDI capability from their suppliers.

1985

The EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport) EDI standard is created by the United Nations to assist with the global use of the technology. EDIFACT will be adopted by the automotive industry, but other industries in the United States continue to use the ANSI X12 standard. 

1991

About 12,000 businesses in the United States are using EDI.

1996

EDI is transmitted over the internet between companies who have the capability to manage the point-to-point communication requirements of each of their partners.

2001

The AS/2 communications standard is published by the Uniform Code Council. AS/2 provides encrypted transmissions of data over the internet.

2004

Wal-Mart begins using AS/2 communication with their suppliers. Some other major retailers will follow suit, but many retailers continue to use VAN communication to this day to outsource the management of their EDI connections.

Today 

Well over 90% of the Fortune 500 use ANSI X12 or EDIFACT. Large companies in Europe have similar adoption levels. Over one hundred thousand companies in the United States use an EDI Solution to communicate with their business partners.