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Problem: Incompatible internal reference values
What is the problem?
Your trading partner and yourself may each have your own internal reference values for entities such as Product Codes and Delivery Locations, but your computer systems do not hold the other party’s values. If you do not have common values for such entities, then it is often difficult to match things up inside your computer systems. Because humans are more flexible in recognising that two descriptions or addresses (which are not identical in spelling etc) actually probably refer to the same thing, manual processes are relied upon to match data where the computer systems cannot do so.
What solutions are there to this problem?
- Ensure that both trading parties use the same standard values
The global standards body GS1, (www.gs1uk.org in the UK) provides GLNs (for locations) and GTINs (for products). These identification standards have been widely adopted, and if you are an organisation currently buying, selling or consuming products but do not yet use such values, you should be evaluating this now. If you do not, you may be left behind.
It is true that you may initially need to invest in order to use a standards-based entity identification scheme. However, when you consider the longer-term implications, this can actually give you significant savings in many areas of your business in addition to simplifying your supply chain.
Several sectors have already adopted this approach throughout their supply chains. It is now being embraced by the Health sector in the UK, and many public sectors both in the UK and worldwide.
Pros: Standardisation helps all trading parties, and has benefits for other involved parties. Can give competitive advantage. May become compulsory in your sector soon, even if it is not already.
Cons: Will require setup effort, and there are some costs. A few specific business situations may not be easily amenable to using globally unique identifiers (eg personal home delivery addresses, product customisation as often found in fashion).
- Hold each other’s identification values and convert between them
The most common approach to the problem historically has been to ensure that one or both computer systems hold the other trading partner’s values. Lookups can then automatically be performed when necessary to convert from one value to the other on the relevant computer system.
Pros: Can provide flexibility which may sometimes be attractive in certain scenarios, (for example if delivery locations cannot be pre-identified), and may be already supported in legacy systems.
Cons: Taking everything into account, this is generally quite laborious. It is common for systems to get out of step as parties have to maintain records in multiple systems.
- Your EDI provider converts values for you
If at least one of you does not hold a look up to the values used by the other, it can be possible for a flexible EDI service provider to perform lookup conversions for you. However, although this will solve the immediate problem, it does mean that there is yet another place that some kind of catalogue or register is held. Before taking this approach one should satisfy oneself that either the values will hardly ever change, or that there will be an automated means of keeping the lookup data updated regularly.
Pros: Can provide additional flexibility, particularly if you are constrained by your legacy systems, or the data is very static.
Cons: The same disadvantages as for doing the conversion yourself are likely to apply for at least one party, unless automatic updates are also implemented.