Secure VAN solutions for reliable EDI data exchange, ensuring smooth communication with trading partners and compliance.”

Tag Archive for: VAN

All You Need to Know About Value-Added Network (VAN)

What is a Value-Added Network (VAN)?

A Value-Added Network (VAN) is a third-party service provider that enables companies to exchange business-to-business (B2B) electronic transactions (EDI), such as purchase orders and invoices, with their trading partners.

In simple terms, a VAN acts as a middleman between businesses and ensures that the data exchanged between the parties, is transmitted securely and accurately.

In addition to basic transmission services, VANs may also offer value-added services, such as translation between different data formats, data mapping, and data validation. Moreover, VANs often provide security features, such as encryption and digital signatures, to ensure the confidentiality and integrity of the data being transmitted.

VANs are particularly useful for businesses that have numerous trading partners and need to exchange a large volume of electronic documents. By using a VAN, businesses can reduce the complexity of managing multiple connections to their trading partners, as well as reduce the costs associated with setting up and maintaining their own EDI infrastructure.

Dive into the world of EDI (Electronic Data Interchange) with our insightful video explanation.

Explore the video now

The History of VAN

VANs have been around since the early 1970s, when they were first used to connect large corporations with their suppliers and customers. These early VANs were typically owned and operated by telecommunication companies, such as AT&T and MCI.

Over time, the industry evolved to include third-party VAN providers, which offered a wider range of value-added services to businesses. Today, VANs are an essential part of the global supply chain, facilitating the exchange of electronic documents between companies in different industries and countries.

How VANs Work

VANs allow companies to exchange EDI documents and other data electronically.

Here’s a simplified step-by-step breakdown of how a business partner exchanges EDI via a VAN:

Let’s look at a simple example: Two business partners – partner A and partner B – want to exchange EDI messages via a value-added network (VAN).

– Partner A needs to purchase something from Partner B, so he will send a Purchase Order (PO) to Partner B and Partner B will send back an Invoice.

– Partner A has an ISA Qualifier/ID: 12/123456789 and owns a mailbox at VAN Provider “X”, which is their chosen VAN. Within their mailbox, there can be two sub-folders: “in” and “out”.

– Partner B has an ISA Qualifier/ID of 12/987654321 and they own a mailbox at VAN Provider “Y”. Within their mailbox, there are also two sub-folders: “in” and “out”.

– When partner A needs to place an order, he creates an electronic document in X12 format (such as purchase order P/O – EDI 850) that needs to be sent to Partner B.

– Partner A connects to the VAN using a secure login, and uploads the EDI X12 document into their own mailbox at VAN Provider “X”, in the “out” sub-folder. The PO message will contain the ISA segment, which looks like the following:

ISA*00*          *00*          *12*123456789   *12*987654321     *170526*1121*|*00403*100000000*0*P*>~

– The VAN “X” processes the document, checking it for errors and ensuring that it meets the agreed-upon data formatting standards.

– The VAN reads the EDI message envelop (ISA segment above), and finds to whom it is destined to (in this example to *12*987654321). They have a conversion table where they will lookup this address, to find out it is at VAN “Y”. They will connect to VAN “Y” either via a direct connection or through a partner VAN network, then connect to Partner B’s mailbox at the address specified and drop the message in the “in” sub-folder.

– Partner B can then connect to their own mailbox, navigate to the “in” sub-folder, and pick up the P/O to process it.

The same process works in the opposite direction for an incoming message. In this scenario, the envelop looks like:

ISA*00*          *00*          12*987654321    **12*123456789   *170526*1121*|*00403*100000000*0*P*>~

It’s important to note that regardless of how many clients each business Partner has or whether they use different VANs, each partner only needs to connect to their own mailbox to pick up or deliver any EDI message.

The VAN will handle the delivery to the destination mailbox. Interconnectivity between VANs is standard practice, so partners generally do not need to have mailboxes on multiple VANs. Partners should inquire with their VAN to determine if there are any VANs they cannot connect to, but this is a rare occurrence.

The VAN that a partner joins will connect to other VANs where their suppliers are located to deliver/pick up messages.

Throughout this process, the VAN may provide additional services such as message tracking, error handling, and notification of message delivery. These additional services help to ensure that messages are transmitted securely and accurately, and that any issues are resolved quickly.

What Are the Types of Value-Added Networks (VANs)?

Value-Added Networks (VANs) come in different types, with the most common being one-to-one, many-to-many, and one-to-many. Businesses choose the type of VAN that integrates best with their trading partners, data requirements, transaction volumes, and industry.

A one-to-one VAN (Value-Added Network)

A one-to-one VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where two trading partners or businesses use a single VAN to exchange EDI messages and documents directly with each other.

In a one-to-one VAN, the VAN acts as a facilitator, providing a secure and reliable platform for businesses to transmit their EDI transactions without the need for establishing and maintaining multiple individual connections. This simplifies the EDI process, reducing the complexity and cost associated with managing multiple connections and data transfer protocols.

One-to-one VANs are often used by companies with high transaction volumes and a need for frequent and rapid exchange of information, such as those in the retail, healthcare, and manufacturing industries. By using a one-to-one VAN, these companies can streamline their supply chain operations, improve efficiency, and reduce errors and delays in the order fulfillment process

Many-to-Many VAN (Value-Added Network)

A many-to-many VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where multiple trading partners or businesses can exchange EDI messages and documents with each other through a shared VAN.

In a many-to-many VAN, the VAN acts as a central hub or intermediary, allowing businesses to connect with each other and exchange EDI transactions in a secure and standardized way.

Many-to-many VANs are particularly useful for businesses with complex supply chains involving multiple trading partners, as they allow for seamless integration and communication between different systems and platforms. They are also widely used in industries such as healthcare, retail, and finance, where data privacy and security are critical considerations.

Overall, many-to-many VANs provide a scalable and flexible solution for businesses to manage their EDI transactions, enabling them to streamline their supply chain operations, reduce costs, and improve their overall efficiency and competitiveness.

One-to-Many VAN

A one-to-many VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where a single business or trading partner uses a VAN to communicate with multiple other trading partners.

One-to-many VANs are particularly useful for businesses that need to communicate with multiple suppliers or customers, as they provide a standardized and secure platform for exchanging data and messages. They are also widely used in industries such as retail, manufacturing, and healthcare, where frequent and rapid communication with trading partners is critical to the supply chain.

One-to-many VANs provide a cost-effective and efficient solution for businesses to manage their EDI transactions, enabling them to streamline their supply chain operations, reduce errors and delays, and improve their overall competitiveness.

Which Companies Use the Value Added Network (VAN)?

Many companies across different industries still use Value Added Networks (VANs) to exchange business-to-business (B2B) electronic transactions (EDI X12/EDIFACT) with their trading partners. Here are some examples of companies that use VANs:

General Motors: The automobile manufacturer uses a VAN to exchange electronic transactions with its suppliers.

Kaiser Permanente: The healthcare provider uses a VAN to exchange electronic healthcare transactions with its partners.

Procter & Gamble: The consumer goods company uses a VAN to exchange electronic transactions with its suppliers.

FedEx: The logistics company uses a VAN to exchange electronic transactions with its partners.

These are just a few examples, but many other companies in various industries use VANs to exchange EDI with their trading partners.

Choosing a VAN Provider

When choosing a VAN provider, businesses should consider a variety of factors, including the provider’s experience, pricing, reliability, and range of value-added services. It’s also important to choose a provider that offers a high level of security for data exchange, including encryption and digital signatures. Businesses should also consider the provider’s ability to integrate with their existing systems and processes, as well as their customer support and training resources.

How EDI2XML Can Help

Understanding the importance of a Value Added Network (VAN) is crucial for businesses looking to streamline their EDI processes. Choosing the right VAN provider is essential to ensure that your EDI transactions are secure, reliable, and efficient.

As a trusted EDI supplier for over 20 years, we have the expertise and experience to help you navigate any EDI issues you may face. We are committed to providing the highest level of service to our clients and offer a free 1st consultation to help you get started.

Contact us today to learn more about how we can help your business succeed in the world of EDI.
/0 Comments

What is EDI (Electronic Data Interchange)?

What is EDI? (Electronic Data Interchange)

Electronic Data Interchange (EDI) is a technology that allows the exchange of commercial information between organizations in a structured digital form based on regulated message formats and standards. Any standard business document exchanged between companies (for example, purchase order, invoice, shipment plan, request for goods availability) can be transferred using the EDI standard and, when both parties have completed the necessary preparations, called the testing and certification phase.

What is ANSI X12, EDIFACT, HIPAA, HL7, RosettaNet

ANSI X12, EDIFACT, HIPAA, HL7, RosettaNet, – these are all different standards to exchange electronic business documents. Some of these standards have been developed for use in a specific industry, according to its special needs. Other standards are developed and widely used, based on geography. For example, the EDI ANSI X12 standard is developed by the American National Standards Institute (ANSI) and commonly used in North America. The EDIFACT is widely and commonly used in Europe. HIPAA (Health Insurance Portability and Accountability Act) is designed specifically to comply with healthcare law. HL7 standard (Health Level 7) is the standard to exchange medical information. RosettaNet is mostly used in the high technology industry.

Useful reading: What are the differences between RosettaNet, EDI ANSI X12 and EDIFACT

Why EDI?

Exchanging EDI (electronic data interchange) documents between trading partners, improved a lot the supply chain management, by increasing efficiency, simplifying transactions and importantly, increase the speed with which a transaction is processed.

EDI is significantly different from regular email, in which information is transmitted in an unstructured format. What is the difference? For example, you need to submit a purchase order via e-mail, you will probably type the document first, and send it as an attached file. You do not have a 100 % guarantee that your e-mail will be received, correctly understood and processed promptly. Moreover, you need to re-enter the same information in another business system (accounting, ERP or warehouse management).

EDI guarantees the delivery of your business information and, thanks to its structured format, the understanding of electronic documents by all participants in the exchange process. EDI software first processes the information, then translates it into a “readable format”, and then data can be imported directly and automatically into your business system. The result – no manual input, a quick exchange of business information, and a full understanding between trading partners.

If you want to know more how our EDI as a Service and EDI Web Service work, download EDI2XML Brochure: The EDI to XML Service for your Business Needs

Which EDI Communication Protocol to Choose?

One of the most important aspects of exchanging EDI documents is the way information is transferred from one business partner to another. In most cases, trading partners themselves determine which transmission method (communication protocol) they will use. Here are some of the most commonly used communication protocols in the EDI world:

 

What is EDI VAN (Value Added Network)

VAN is the third party in the process that transmits and stores information in an electronic mailbox until it is received by one of the parties. Since the EDI message contains the destination’s address, the VAN routes the message to the recipient’s box.

Despite its advantages, VAN EDI was not widely distributed due to the high price. Thus, many suppliers communicated with their customers via fax, telephone, and mail, as could not afford the significant costs that VAN required.

As a result, there were failures, such as lost or unread orders and invoices, late deliveries of goods, etc.

With data exchange via the Internet, large and small companies have the opportunity to communicate with their trading partners electronically.

Direct Connection

Direct connection allows you to transfer data directly to a business partner. Types of direct connections include VPN (Virtual Private Network), FTP (File Transfer Protocol) sFTP (Secure File Transfer Protocol), and AS2, which encrypts data before sending it over the Internet.

AS2 Standard

The AS2 standard is used to securely transfer EDI and XML documents over the Internet via HTTP. The primary principles behind the AS2 standard are security and secure data transmission over the Internet.

The AS2 standard provides the possibility of almost continuous data transfer since direct HTTP transfers are used. In the AS2 standard – data security is provided by S/MIME via HTTP (Hypertext Transfer Protocol) or HTTP/S (HTTP secure), also using MDN. The AS2 standard provides real-time synchronous data transfer with instant delivery messages. Today, leading retail chains and manufacturers use the AS2 standard. The list of companies includes Wal-Mart, Target, Lowe`s, Wegmans, Procter & Gamble, Hershey Foods, Campbell`s and many others.

What are the Advantages of EDI?
  • Eliminates the need to use email, fax, or telephone to transfer documents.
  • Significantly reduce the processing time of documents (enterprises that have implemented EDI, reduce the document processing time by an average of 80%)
  • Eliminate/reduce the number of errors in the document flow due to the almost complete elimination of manual data entry.
  • Fully control the “order-delivery” process.
  • Monitoring the status of documents (sent, accepted, etc.) allows you to control the execution of the order.
  • Elimination of document loss incident – ensures that all documents (Orders, etc.) will be delivered to the supplier on time.
  • Reduction of costs associated with paper workflow: man-hour spending, office supplies, and equipment.

The Most Used UN/EDIFACT Messages

ORDERS – Purchase order (order for delivery of goods or services) – an electronic message that is analogous to an order for the supply of products. It is formed and sent by the buyer to the supplier.

ORDRSP – Purchase Order Response (order confirmation) – an electronic message in which the supplier confirms, corrects or rejects the delivery for each commodity item. Dispatched by the supplier to the buyer.

DESADV – Despatch advice (notice of shipment) – an electronic message that is analogous to the consignment note. This message is generated at the time (or before) the supplier sends the goods. This message indicates the actual (shipped) quantity and range of goods delivered to the buyer.

RECADV – Receiving advice (delivery notice) – an electronic message that contains information about the actually accepted product, as well as it may contain information about the reasons for not accepting the goods. This message is generated at the time (or after) the physical acceptance of the goods by the buyer.

INVOIC Invoice – an electronic message that is similar to a paper invoice.

PRICAT – Price/sales catalog message (product catalog) – an electronic message that contains information about the goods and their price characteristics. This message is generated by the supplier when the price, assortment changes.

PROINQ – Product inquiry (price list request) – an electronic message containing a list of products for which price information is required. Sent by the buyer as necessary to obtain product information.

COACSU – Commercial account summary (the act of review of mutual accounts) – an electronic message that is an analog of the accounting document “Act of reconciliation of mutual settlements”

COMDIS – Commercial dispute message (commercial discussion) – an electronic message that contains information about the discrepancy between the quantity, prices, and VAT rates. Dispatched by the buyer upon detection of an inconsistency in the invoice (INVOIC).

What are the Types of EDI?

We provide various types of EDI:

1. EDI Web Service. EDI2XML Web Service, is an HTTP service running over the internet, on EDI2XML own platform that is capable of receiving HTTP requests to translate EDI messages to XML, and XML messages (based on EDI2XML’s proprietary format) to EDI.

2. EDI Managed Services. EDI2XML Managed Services is our popular “fully managed EDI service”, including translation and communication service offering to businesses of all sizes, from various industries. All conversions of EDI files are done on our end, leaving customers with no on-site installation of software or hardware and an EDI project that is on time and within budget.

3. On-Premises EDI Services. We offer EDI2XML services with “on-Premises” deployment at the customer servers. Basically, there will be few components that will be deployed “on-premises”:
  • The necessary “binary” engines to process and translate from X12/EDIFACT messages to XML and vice versa.
  • Our proprietary “binary” REST API

EDI2XML – the Best EDI Provider

EDI2XML is one of the leaders in the development and implementation of electronic data interchange (EDI) solutions.

Operating in the IT services market for over 20 years, EDI2XML offers the most effective and advanced EDI solutions.
Free EDI consultation

RELATED POSTS:

What is EDIFACT? | UN / EDIFACT standard overview

Electronic Data Interchange: Key Information You Need to Know

ANSI ASC X12 Standards Overview

What Are the Differences Between ANSI X12 and UN/EDIFACT

A technical introduction to EDI

How Much Does an EDI License Subscription Cost?

This post was updated to reflect current trends and information.

EDI2XML’s Subscription Cost

EDI2XML licensing is affordable since we take the time to listen to our customers’ EDI requirements and price it accordingly. We’ve also ensured that our monthly subscription plans fall within the budgets of companies of all sizes (from small to large). We offer two types of services:

EDI Web Service

Fully Managed EDI Services

EDI Web Service

EDI2XML Web Service is an HTTP EDI Web Service (REST API) that runs over the internet on EDI2XML’s own platform that takes HTTP requests to translate EDI messages into XML, and XML messages (based on EDI2XML’s proprietary format) into EDI.

You can get started quickly and easily with EDI2XML Web Service. It takes less than an hour to place a first call to the Web Service and sees the response.

EDI2XML Web Service Costs

The EDI2XML charges for using EDI HTTP/Web service calls are based on a very simple pricing system. The prize consists of [2] elements:
  1. The monthly mailbox fee is a “fixed” fee for Web Service Mailbox usage on the EDI2XML platform.
  2. During a calendar month, a “variable” fee is assessed based on the volume of data processed through EDI and XML translations.

Request EDI2XML Web Service Price List

Fully Managed EDI Services

With this SaaS option, all conversions of EDI files are done on our end, leaving you with no installation of software or hardware on your premises.

We offer EDI2XML Managed Services, a fully managed EDI service that includes translation and communication services to businesses of all sizes, in a variety of industries. We drop off and pick up all EDI documents to and from your trading partner’s server and send you email alerts when this is done.

Pricing for these options consist of a one-time affordable setup fee (only determined after a consultation call) as well as a monthly subscription fee, based on volume consumption in a given month (inbound and outgoing EDI transactions).

Don’t worry if your business has EDI documents that aren’t in the list of documents; we can always work with new documents.

We invite you to:

– Download the evaluation sheet and fill in the appropriate information

– Once the Excel evaluation sheet is filled in, please feel free to email it to sales@namtek.ca

– Download our EDI2XML Service Pricing Package to see the monthly plans we offer.

Within 24 hours someone will be contacting you for a free consultation to discuss your EDI requirements in more depth.
Get A Free EDI Consultation

Read: Fully managed EDI service VS HTTP Web Service: Which is Better for Your Business ?
/0 Comments

How does EDI2XML work ?

, ,

How does EDI2XML work?

In simple terms, EDI2XML is a converter from EDI X12 format to XML format. The result XML format file is based on a pre-defined schema (xsd); we call it our “EDI2XML format”. Here is a very simple graphical description of the EDI2XML engine “in action”.

EDI Platform

Read: What is EDI ?

EDI2XML can work in two directions by changing a little switch when executing the command:

  • Convert incoming EDI X12 files to XML format
  • Convert outgoing XML format files to EDI format
For incoming EDI files, after a raw X12 EDI file is received using communication software and the EDI2XML engine is triggered, the following actions are executed one after the other:
– EDI2XML will verify the structure of the received file to make sure it is a valid raw EDI X12 format file
– If the raw EDI X12 file is valid in terms of structure, it will run another path to eliminate any information not considered part of EDI; for example, some headings and footers sent through the EDI VAN are automatically cleaned as it does not relate to any business information exchanged with the EDI partner
– The engine is smart enough to split a batch of incoming EDI files inside the same physical file, by envelop (ISA) and by ISA id, as a preparation for the conversion to XML, regardless of its EDI standard and revision
– Once all of the above is completed, the engine would generate for each one of the EDI files an equivalent XML formatted file.
The EDI2XML engine works a little differently when converting raw X12 files from an XML format. Once the engine is triggered with the option to convert XML to EDI X12 format, it will do the following actions:
– For each XML file found, EDI2XML will validate its structure and find out if it is well formed, to make sure it is compliant with edi2xml format and schema
– For each valid XML file, the engine will convert from XML to X12 raw EDI format
*It is important to note that the XML file should comply with a pre-defined xsd (or schema). All necessary information related to EDI versions and standards are sent within the XML file. For incoming and outgoing edi2xml formatted files, only files from the “ licensed” partners are being processed. Any EDI or XML file sent from/to an unlicensed partner will NOT be processed at all.

Read: How is EDI2XML licensed ?

Free EDI Demo

/0 Comments

What is a VAN ?

EDI Communication and VANs

What is a VAN ?

A Value Added Network (VAN) is considered the “post office” where business partners can collect and sort EDI documents coming through. As of today, a considerable amount of EDI transactions are still going through VANs, however this number is always in constant decline considering the popularity of the internet, its reduced cost as well as the level of security someone can implement with internet communication protocols. Most of the “major players” in the retail industry, have switched to a point-to-point communication of EDI files and transactions using one or many of the following secured communication protocols for a point-to-point EDI exchange:

FTP (not secured – plain text)

sFTP

Https

AS2

AS3

telnet

“bisync modem” to communicate through a value added network (VAN). This is the oldest method of secured communication.
/2 Comments