THE ROLE OF

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TECHNOLOGY TRANSFORMATION SEMINAR
THE ROLE OF ELECTRONIC DATA INTERCHANGE (EDI)
IN THE OPERATION OF INTERNAL CLEARANCE DEPOT
(ICD).
Presented by David M.A. Quarshie
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INTRODUCTION Globalization of trade, the
emergence of information economies, and the
growth of the Internet and other global
communications networks have recast the role of
information systems in businesses and
management. This is especially the case if the
organization concerned is to use electronic data
interchange (EDI) to communicate with other
businesses both within a country and externally
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WHAT IS ELECTRONIC DATA INTERCHANGE (EDI) EDI is
simply the computer-to-computer exchange of
business documents between and among companies.
Electronic Data Interchange (EDI) has been in
use since the 1950s,
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Economic Uses of EDI less expensive than
handling paper documents. Much less labour time
is required and fewer errors occur because
computer systems process the document rather
than manual processing. EDI transactions between
companies flow faster and more reliably than
paper documents.
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EDI AND THE MANAGEMENT OF ICDs EDIs efficiency
level has made it an important contributor to the
efficiency and perhaps effectiveness of business
communications in many ports and ICDs all over
the world. Regulatory data-flows ( including
flows to and from customs, quarantine
and safety
authorities) Commercial data-flows (including
bookings, forwarding instructions, manifests,
bills of lading and waybills) and, Operational
data-flows (including those associated with
cargo-handling,
container tracking and vehicle scheduling).
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REGULATORY DATA-FLOWS. Customs declarations and
tariff information are very sensitive and
critical to the management of revenue collection
and statistics. Using manual data entry exposes
the documentation processes to unnecessary human
errors. Apart from the fact that the manual
system is slow, erroneous and ineffective, it
also turns out to be expensive. EDI documents,
unlike emails which are text documents, use
specific computer record formats which are based
on widely accepted standards. This allows all
data fields needed for processing of documents
and output of reports to be captured once and
then made available to all interested parties.
Human interventions in the processing of the
documents then become very limited thereby
ensuring efficiency and reliability in the
exchange of information. Using EDI and Radio
Frequency Identification (RFID), for instance,
ensures that all cargo entering the ICDs are
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Fully accounted for Kept secured until
authorized release is granted Accurately reported
to allow for effective Customs profiling and
risk assessment. It must be understood that EDI
is an aspect of the total information systems
setup of an organization. This provides data
from the most accurate source of information
the shippers or their brokers. Some examples of
the uses of EDI in the regulatory data-flows are
The Ghana Customs Management System (GCMS)
The Australian Quarantine Inspection Service
(AQIS) implements an
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The objectives of these systems are to receive
consignment data, to conduct profiling and risk
assessments, and to make decisions on consignment
status, all prior to the cargo arrival at the
ICD. In addition, the systems are able to isolate
cargo of any special interest, and facilitate
issues of the remainder. They also make status
information available to interested parties.
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COMMERCIAL DATA-FLOWS EDI can also be used
between shipping lines and individual shippers,
exporters and freight forwarders to allow for
lower data transfer cost, reduce order time and
to provide accurate information to support
business decisions. It enables shipping lines
and freight forwarders to lodge manifests
covering all consignments and check manifest
details against And statistical data are
generated automatically for other different
users. The Uniform Customs and Practice for
Documentary Credit
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OPERATIONAL DATA-FLOWS Cargo handling, container
tracking and vehicle scheduling
whose documentation constitutes the operational
data-flow in any ICD are very crucial and
critical to its effective management. THE USE
OF RFID What is RFId Radio Frequency
identification is a technology that enable the
tracking or identification of objects using IC
based tages With an RF circuit and antenna, and
RF readers tag reads and in some case modify
the information stored in the IC
memory. Types 1. Passive 2. Active Tags
They could be seen at first sight an
improvement of the bar code used today almost
everywhere.
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• TRANSPORTATION FLEET MANAGEMENT (TFM)
• TRM RFId solutions allow for automatic
  identification of both the vehicle and the goods
  they carry. Active and passive tags with both
  short and long reading distances are available
  for different kinds of applications. Close
  reading distances from a few centimeters up to
  one meter and long reading distances even up to
  40 meters are possible.
• RFId TFM software together with suitable tags,
  antennas and readers allow vehicle and goods to
  be identified and tracked in/out of distribution
  areas for loading and unloading . Furthermore,
  together with the range of mobile data
  terminals, automatic vehicle location systems and
  GPS / GSM products, RFId can offer complete
  tracking of vehicles and security of goods even
  when the vehicles are travelling from one
  geographic area to another.

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HOW EDI WORKS. Let us look at how an EDI
transmission works. A buyer prepares an order in
his purchasing system and has it approved. Next,
the EDI order is translated into an EDI document
format called an 850 purchase order. The EDI 850
purchase order is then securely transmitted to
the supplier either via the internet or through
a VAN (Value Added Network). A VAN is like an
electronic post office that interconnects
the buyer and the supplier. The buyers VAN
therefore interconnects the suppliers VAN. The
VANs ensure that EDI transactions are sent and
received. The suppliers VAN ensures that the
supplier receives the order.
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The suppliers EDI system then processes the
order. Data security and control are maintained
throughout the transmission process using
passwords, user identification and encryption.
Both the buyers and suppliers EDI applications
edit and checks the documents for accuracy
automatically. Each trading partner has unique
EDI requirements. These will include the
specific kind s of EDI documents to be
processed, such as the 850 Purchase Order used in
the example above, 856 Advance Ship Notices and
810 Invoices. It is important to note that each
EDI document must be exchanged with each partner
in exactly the same format they agree upon. There
are EDI implementation guides that explain their
specific requirements.
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Below is a graphic demonstration of the typical
flow between suppliers and customers.
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REQUIREMENTS FOR THE IMPLEMENTATION OF EDI.
The following are most of the requirement for
the successful implementation of EDI. Software
for communications, mail-boxing of EDI
transactions, mapping and translation. VAN,
ASYNC, BISYNC, and Internet communications as
required by various partners. Hardware including
a server or PC, communication devices and
peripherals. ecured office space and monitored
security Data backups and redundant power for
reliability Personnel must be trained in the
software and communication devices usage Maps
will need to be developed for each EDI document
type to be exchanged with each partner, as
appropriate. Maps translate the encoded EDI
record into a useable format.
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CONCLUSION The benefit of EDI in the ICD
value-chain arises from the accuracy and
reliability of consignment data captured, once,
at its source, and the timely transmission or
availability of that data to the relevant
organizations further along the chain. However
EDI must not be viewed in isolation but as an
integral part of an organisations total
information systems.

• Getting into EDI is a major business decision.

• To help meet EDI needs, there is a new industry

• Protocols -- rules of communication

• Do not assume you can fall back to a paper-based
  system