Electronic Commerce

Electronic Commerce refers to the various ways that business is conducted electronically, rather than through paper-based transactions. The different forms of Electronic Commerce include:

• EDI (Electronic Data Interchange)
• XML (eXtensible Markup Language)
• EDIINT (EDI over the Internet)
• e-marketplaces
• extranets
• and many more

The most widely used form of Electronic Commerce in the food industry today is EDI: the computer to computer exchange of business information using an industry-wide protocol.

Important Terms & Information

Transaction:

Each business document is called a “transaction” in the EDI world. There are over 30 EDI transactions that could be used for EDI trading.

The most widely used transactions in the food industry include Purchase Orders, Invoices, Advanced Ship Notices (ASN) and Price Information. There are dozens of other transactions that cover areas such as continuous replenishment, promotional information, load tendering, carrier information, automated payments, etc.

X12 Standards:

Standard protocols used in Electronic Commerce. These protocols have been established for well over a decade and are being used in multiple industries around the world. They allow companies to “integrate” each EDI transaction received.

Integrate:

Receiving information and automatically plugging that information into your systems. The ability to integrate a transaction (such as a purchase order or an invoice) eliminates the manual labor needed to key that transaction into your systems. As such, EDI has a very quick ROI (return on investment).

Application Service Providers (ASPs):

These are vendors (also known as Third Party Service Providers) that “rent” the software and hardware needed for Electronic Commerce. They typically provide other services such as an interface over the internet that would allow you to communicate with your trading partners using EDI or other forms of Electronic Commerce.

Why Standardization (and GTIN) Are Critical For Using Electronic Commerce

The biggest hurdle the produce and floral industries face in using Electronic Commerce is the lack of standard product identification. To effectively use Electronic Commerce, each supplier and buyer must use the same item number when referring to a product (both at the case level and at the item level). The standard product identification protocol used in over 100 countries and by more than 25 different industries is the GS1 protocol called the GTIN (Global Trade Identification Number).

The GTIN would allow companies to reference the same item in all of the various business transactions used today without having to cross-reference these numbers. A pilot was completed in September of 2006 that discusses the implementation of this important number at the case level. The document is entitled: “GTIN: Making a Case for Streamlining the Produce Industry”.

It is strongly recommended that produce and floral companies begin using this standard as quickly as possible. These same standards are used in other supply chain technologies such as barcoding, RFID, GS1 DataBar (formerly known as RSS), data synchronization and others.