About EDI mapping: an overview for CPG suppliers

Electronic data interchange (EDI) is a uniform set of standards for exchanging business documents among trading partners. It was developed in the 1970s to ensure efficient order processing, inventory management, and invoicing and to streamline overall supply chain operations, and it is still in use today. Most major retailers and CPG distributors in North America require their suppliers to be EDI-compliant in how they send and receive documents such as purchase orders and invoices. EDI mapping is the process of translating data from one party’s systems to another’s and is crucial for seamless and compliant data exchange. 

Proper EDI mapping is mandatory for EDI compliance and helps ensure accurate translation of electronic business documents to and from customer systems. Here you’ll get an overview of EDI mapping in the context of the CPG supply chain and options for implementation.

What is EDI, and why is it still used?

EDI technology was established in the 1970s as a standard for exchanging business documents, and it continues to be widely used throughout the retail industry. The original goal of EDI was to enable the transfer of business documents with as little human intervention as possible, thereby reducing data entry errors and delays inherent to physical mail, fax, or email transmission. 

Today, the time-tested core EDI data format and operating model remain deeply ingrained in the business systems of most major retailers and have been adapted to web-based operations. Because EDI is so ubiquitous, CPG suppliers must have systems in place to comply with the EDI requirements of their customers, and those systems must include EDI mapping capabilities.

Major retailers demand that their suppliers comply with EDI requirements and often keep EDI “scorecards” on their vendors. Many retailers will not do business with a supplier without EDI-compliant systems in place.

What are the benefits of EDI?

While EDI compliance requires investment in systems and people, there are many benefits for all parties to having these supply chain standards in place.

EDI allows retailers to streamline their business processes by standardizing communication and collaboration. It also provides a common framework for the exchange of standard business documents between different organizations. By adhering to these standards, trading partners can ensure that their systems are compatible and can seamlessly and instantly exchange data, regardless of the type of software or applications they use.

EDI standards help to automate and accelerate the exchange of business documents, reducing the need for manual data entry and processing. This not only saves time but also reduces the risk of errors and discrepancies in the data. EDI also helps to ensure data accuracy and consistency because the format and structure of the exchanged documents are standardized, making it easier for trading partners to interpret and use the data.

What are EDI guidelines?

EDI guidelines are the rules and standards that govern the implementation and use of EDI in business transactions. These guidelines provide a framework for the exchange of EDI messages between trading partners, ensuring that data is accurately and consistently transmitted and received. EDI guidelines typically cover topics such as message formatting, data element definitions, communication protocols, and security requirements. They may also include specific instructions for implementing EDI within an organization's internal systems and processes. 

Following EDI guidelines is essential for ensuring successful EDI transactions and maintaining compliance with industry standards and regulations. Many industry organizations and standards bodies publish EDI guidelines specific to their respective industries, such as the ANSI X12 standard for North American EDI transactions. 

For example, in EDI, a business document is called a transaction. Each document type is a different transaction set, and each transaction set is defined by a three-digit code. There are hundreds of transaction sets that can be used in EDI, and the three-digit number assigned to the transaction set varies by industry. Retail transactions are in the 800 series, warehousing transactions are in the 900 series, and transportation transactions are in the 200 series, for example.

What is EDI mapping, and why is it necessary?

The use of EDI standards would be impossible without EDI mapping, which is the process of translating EDI data from the source system into formats that are compatible with the target system and actionable by human users. This mapping process underpins the entire EDI system, and it can be complex.

EDI in the CPG supply chain typically involves the exchange of documents such as purchase orders, invoices, shipping notices, and payment remittances between CPG suppliers and their retail or distributor customers. Each of these documents contains specific data fields that need to be mapped to the corresponding fields in the recipient's system. A purchase order from a retailer may contain information such as product codes, quantities, and delivery dates, which the supplier must map to their own system to understand and fulfill the order. 

For example, when a retailer sends a purchase order to a supplier, the EDI mapping process translates the order into a format that is compatible with the supplier’s EDI compliance platform and internal systems, allowing them to understand the order details and process the order, including picking, packing, shipping, and invoicing. Similarly, when the supplier sends a shipping notice or an invoice to the retailer, EDI mapping ensures that the data is accurately translated and integrated into the retailer's back-office systems in a compliant way. This standardized approach streamlines the exchange of information, automates processes, and reduces the likelihood of errors, benefiting both the retailer and the vendor in their supply chain operations.

Efficient and accurate EDI mapping is essential for suppliers to remain compliant with their customer requirements, operate efficiently, and ensure customer satisfaction.

Many CPG companies also rely on EDI mapping to seamlessly transfer data from their trading partners to their back-office systems such as ERP, warehouse management systems (WMS), and business intelligence systems. 

Why is EDI mapping so complex?

The EDI mapping process involves multiple steps and can be extremely complex. It involves identifying the data fields in the source document, determining the corresponding fields in the target system, and creating a mapping specification that defines how the data should be translated. This specification is then used to develop an EDI mapping solution that can automate the translation process and ensure accuracy and consistency in data exchange. 

However, while EDI standards dictate the basic structure and content of each business document, each retailer applies the standards in their own way.

As a result of this variability, EDI maps must be customized to meet the specific needs of each trading partner and to integrate with diverse business systems.

Suppliers that don’t adhere to a retailer's EDI mapping requirements and business processes are penalized with fines, chargebacks, and/or negative scores on the vendor EDI scorecard, which affects the supplier’s reputation with the retailer.

How does EDI mapping apply to a supplier’s back-end environment?

EDI mapping isn’t limited to data passed between trading partner systems. It can also be used to automatically translate EDI data to the structures and formats used by back-end software such as ERP systems. When this integration with back-end systems is automated, it streamlines business processes, enhances data accuracy, and improves overall efficiency within the supplier’s business environment. 

This back-end mapping process involves aligning EDI data elements and formats with the corresponding fields and structures of the ERP software, ensuring that the information can be accurately processed and integrated into the organization’s internal systems. 

What is the difference between direct and indirect (canonical) EDI mapping?

EDI mapping methodologies can be either direct or indirect/canonical. The canonical approach represents industry best practice.

Direct EDI mapping is a 1:1 mapping relationship between two partner systems. EDI messages are mapped directly to the internal data structures of the receiving system, with no intermediate translation. This method has disadvantages in that the supplier must create a new EDI connection every time it establishes a relationship with a new retail partner. Setting up 1:1 systems can be costly and time-consuming. 

Canonical (indirect) EDI mapping involves first standardizing EDI messages into a common format before mapping to the receiving system. This allows for efficient one-to-many mapping. 

In this context, "canonical" refers to a standard representation of data that can be used as a common format for mapping and transforming EDI messages. Canonical EDI mapping creates a universal structure for EDI data, allowing for seamless integration and communication between disparate systems, applications, and trading partners. By establishing a canonical model, CPG suppliers can facilitate interoperability across their supply chain and business ecosystem. Canonical systems are more efficient and scalable than direct EDI mapping architectures because a single implementation can provide mapping to many trading partners. This approach has many advantages. Onboarding a new retailer is fast and efficient because the retailer’s EDI requirements are already mapped to the intermediary system. The intermediary system can then be mapped to the supplier’s back-end systems such as ERP software. 

Crisp utilizes this canonical method, which makes onboarding new retailers simple for CPG suppliers and does not add incremental costs.

What are the key challenges of EDI mapping?

EDI mapping can be extremely time-consuming and requires a deep understanding of not only EDI standards and guidelines, but also of how individual retailers use EDI and set their requirements. Organizations that use internal teams and resources for EDI mapping will face a number of steep challenges:

• Maintaining accurate mapping can be difficult and time-consuming because of the constantly changing nature of business processes, systems, and trading partner requirements. As new technologies and standards emerge, existing EDI mappings may become outdated and require frequent updates to remain compatible with evolving backend systems and partner requirements.
• Changes in trading partner specifications, such as new data elements or formatting requirements, can necessitate regular adjustments to EDI mappings. This ongoing maintenance requires time, resources, and a thorough understanding of EDI standards and business processes.

• CPG involves a vast amount of product data, including item codes, descriptions, and packaging variations, which can make EDI mapping even more complex. Each trading partner may have unique data requirements, nomenclature, and document conventions, leading to challenges in mapping and translating this data accurately.
• CPG suppliers often work with a wide range of trading partners, each using different systems and technologies. This diversity can make in-house EDI mapping difficult, as the data formats and structures may vary significantly between partners and require expert customization. CPG companies must customize their EDI mapping to meet the specific needs of different trading partners, address different data elements, accommodate unique business rules, and integrate with partner-specific systems.
• The CPG sector is subject to various industry-specific regulations and standards, such as GS1 standards for product identification and labeling. Ensuring compliance with these standards while mapping EDI data can be challenging, especially when dealing with a large volume of products and frequent changes in regulatory requirements.
• Maintaining accurate and synchronized product data across multiple trading partners is crucial in the CPG industry. EDI mapping must ensure that product information, pricing, and inventory levels are accurately reflected in both the sender's and receiver's systems.
• As CPG companies grow and expand their operations, the complexity of in-house EDI mapping can increase. Managing a growing number of trading partners, data volumes, and mapping requirements while maintaining efficiency and accuracy presents a significant challenge.

Addressing these challenges requires EDI mapping solutions that can handle the complexity of product data, integrate with diverse systems, accommodate customization needs, ensure regulatory compliance, support data synchronization, and scale effectively as the business grows. This is most efficiently, scalably, and cost-effectively accomplished by partnering with a third-party vendor that is expert in both EDI and CPG.

What options for EDI mapping are available?

EDI compliance is mandated by your customers and thus is a cost of doing business. You can spend precious time and money running an EDI department or you can adopt an EDI compliance solution and service provider to handle order management, integration and data transport needs. Here are some things to consider about these options. 

• Developing or purchasing and operating EDI compliance software in-house: Software is available to conduct EDI mapping in-house, but it can be expensive. Costs include the purchase price of the software, annual maintenance fees, and incremental costs of new modules. The supplier will also need to buy communication software to send/receive the EDI data (AS2 or FTP software) and know how to run it on your server. Technical experts who know how to run both types of software must also be hired. 
• Working with a third-party EDI service provider: Managed services are more economical than conducting EDI mapping in-house. Considerations for choosing a vendor include:
  • What does the vendor charge to set up a new EDI retail partner?
  • What do they charge to make the frequent mapping changes?
  • Do they charge on a monthly basis for transactions, communication fees, and support?
  • Does the vendor offer a flat-rate pricing option? 
  • What type of support do they offer for onboarding, training, and day-to-day customer service?
  • How user-friendly is their portal and how easy is it to track EDI data?

To conduct EDI mapping in-house, a CPG supplier needs:

• An EDI translator
• Someone who can do the mapping in the EDI translator, mapping the fields from the PO to the EDI standards
• A file transfer method

What to look for in an EDI mapping solution

Consolidation: A good EDI mapping solution will consolidate all your order activity under a single cohesive system. If your operation is smaller and you receive only a few orders per week, look for a fully EDI-compliant tool that works in your browser and connects to all your trading partners.

Back-end integration capabilities. To fully benefit from what EDI has to offer you as a supplier, you will want your EDI data to integrate seamlessly into your back-end systems, such as back office accounting, ERP, WMS or shipping software. This eliminates the cost of having a data entry clerk keying in orders manually into your system and helps to avoid data entry errors.  If you work with a 3PL service provider, it will connect directly to their facility and integrate with their WMS and shipping software. Look for a vendor that has integrated thousands of different combinations of software.

Scalability: As your EDI activity and sales increases during peak periods and as your business grows, it means more electronic interaction with customers. They demand timely notification and delivery of their order quickly. Inventory management becomes a greater challenge too. If you manage everything manually, it’s labor intensive and prone to errors — which costs you money.

Data transport: Moving your data is just as important as the data itself. FTP, AS2 and VAN are the common methods for data transport. Look for a solution that supports all three methods and manages and monitors the movement of your EDI data safely and securely. It should “push” files that are ready to send and “pull” files that are ready to receive. Most EDI trading partners only expect files to be transported a few times a day; however, marketplaces and shopping carts require transfers more frequently. 

How to learn more about EDI mapping

Accurate and efficient EDI mapping is essential for suppliers to remain compliant and in good standing with their retail customers. However, it requires deep expertise and dedicated resources to do it efficiently and accurately day-in and day-out across thousands of transactions. 

Crisp handles every aspect of EDI mapping as part of our end-to-end EDI compliance solution. Crisp eliminates the costs, complexity, and risk associated with managing EDI processes and mapping in-house and offers trusted expertise in both EDI and CPG.