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Working of EDI

A two-way working process (figure 2.15) of EDI-based transactions between vendor and supplier:


After business agreements are reached between the two EDI-enabled partners, no human touch is required. The ultimate EDI implementation is a totally automated interaction between the business applications. A step-wise execution of processes involved in EDI transaction for purchase, shipment, and payment is as follows: 
1)The sender's EDI translation software translates the document into a standard format and establishes the communications connection by dialing telephone number of the network.
 
2) The message from the sender is transferred to an electronic mailbox on the network. From the electronic mailbox, the trading partner's software will retrieve the file, interpret the message, check that it complies with the EDI standards, and finally store it. It also sends a functional acknowledgement to inform the sender if the message was received and complied with the EDI standard.

3) To read and process the interpreted message, the receiver has two options. either use the EDI translation software to produce a hard copy of the message or re-structure (map) the message into a format required by the existing computer applications before further processing.

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