EDI in the retail industry in Japan started with the EOS (Electronic Ordering System) that became widespread in the supermarket industry after the JCA Protocol (*1) was drawn up in 1980. But because this slow data communications protocol came into use among so many trade partners, it has been impossible to replace the protocol with the latest Internet communications despite the rapid progress of IT thereafter. Recently the limitations of the use of the JCA Protocol began to be realized as the supply of communications equipment supporting the protocol was discontinued. The problems of the protocol were also pointed out, such as the fact that the data format transmitted by the JCA Protocol (a fixed length format) differed among various types of retail business and the difficulty of adding data items according to changing environments. To resolve these problems, the Ministry of Economy, Trade and Industry (METI) conducted Supply Chain Information System Standardization Project for six years from 2003 to 2008 and urged the supply chains in Japan to increase their efficiency. Supply chains in Japan are composed of three groups-product manufacturers, wholesalers and retailers. Because the three groups did not succeed in cooperating on the exchange of information, supply chains suffered such problems as a lack of good-selling products and the piling up of inventories of poor-selling products. The project aimed at standardizing the EDI and enabling cooperation in continuous information exchange among businesses, thereby creating an optimal mechanism capable of providing the highest value added to the consumer. In June 2005, the two trade associations of supermarkets in Japan that felt a sense of crisis about the maintenance of the EDI system-the Japan Chain Stores Association and the Japan Supermarkets Association-held a joint meeting on information systems, and this accelerated the establishment and diffusion of a new EDI standard using Internet technology.
In 2005, the 12 major supermarket chains in Japan organized the working group for standardized next-generation EDI as a project entrusted by METI and started studying the basic requirement of EDI for groceries. By the end of FY2008 in March 2009, the basic messages for price tags, order placement, shipment, receiving of goods, returning of goods, billing and payment were standardized. In 2006, four retailers --- AEON, Daiei, Heiwado and Uny---and nine grocery wholesalers conducted a joint pilot test to study the feasibility of the system, and in April 2007 they released it as the Ryutsu (*2) Business Message Standard (Ryutsu BMS) (Ver. 1.0). In 2007, a pilot was conducted jointly for more commodities by six retailers (the four that took part in the test in 2006 plus CGC and Kinsho Store), four wholesalers of perishable meats and six apparel wholesalers. After the feasibility study, they announced a minor upgrade to the Ryutsu BMS (Ver. 1.1) in March 2008. In March 2009, they added messages for information analysis, including POS sales performance data, too, and published the Ryutsu BMS (Ver. 1.2). The Ryutsu BMS (Ver. 1.3), to which the standard messages for product master data is added, has been released in October 2009.

After the pilot was completed, the participating retailers started to adopt the new EDI system using the Ryutsu BMS. Because the types of Product categories have increased, it has been possible for supermarkets to apply the Ryutsu BMS to the EDI for a majority of the products they handle. As a result, businesses adopting the Ryutsu BMS are gradually increasing, and it is expected that three years from now, over a half of Japan’s supermarkets will change over from the JCA Protocol to the Ryutsu BMS.
The products sold by general merchandise stores (GMSs) in Japan cover a wide range, including groceries, perishables, apparel, consumer electronics, books, shoes and sporting goods. Amang retailers other than GMSs, drugstore chains started studying the standardization of EDI in 2007, and home improvement retailers, in 2008. These industries have a similar trading system to that of supermarkets and added the factors required for them to the standard EDI messages prepared by GMS’s leadership.
There are several major groups of department stores in Japan, and each one has their own EDI message schemes. Having to deal with multiple de facto EDI message standards, major apparel manufacturers needed to run costly operation and strongly called for standardizing the EDI message for trade with department stores. Because their trading system differed from that of GMSs, the Japan Department Stores Association, the Japan Apparel Industry Council and the Japan Federation of Shoe-Wholesalers’ Organizations jointly studied and composed standard EDI messages different from those used by GMSs.

*1.JCA Protocol: Communications standard protocol for pull-type message transmission between the client and server using the BSC non-transparent mode. It can use both public circuit (2400 bps) and DDX circuit (9600 bps). It cannot transmit binary data, such as Kanji characters.

*2. Ryutsu is Japanese equivalent of supply and demand chain, typically consists of three groups; Manufacturers, Wholesalers and Retailers.

About 80% of retail businesses in Japan are small and medium in size, and these businesses are important in the diffusion of the standard EDI. Behind the fact that the EOS using the JCA Protocol was adopted so widely were the activities of those various network service providers who provided support to these SMEs.
About 20 regional retail VAN(Value Added Network)s across Japan are representative of these providers. The regional retail VANs played the role of intermediaries for the EOS between small and medium retailers and 17 Fig. 2.1.1-1 Business Processes and Ryutsu BMS Ver1.3 wholesalers active in each region, thereby providing these retail businesses with a basis for easily introducing the EOS. To help these local VAN businesses play a key part in diffusing and expanding the Ryutsu BMS among smaller retail , too, the METI project in 2007 provided model building support to the VAN businesses. Efforts to spread and increase the use of the Ryutsu BMS have been made by expanding VAN and ASP services utilizing the model.
Meanwhile, as the actual application of Ryutsu BMS-based systems was being promoted, research and investigation aiming at further increasing the efficiency of the operations were started in 2007 to standardize logistic vouchers, such as logistics labels and delivery statements. In 2008, the supermarket industry examined the details of label standardization and prepared standard specifications for logistics labels and small-lot dispatch list for delivery of groceries sold in supermarkets.

The Ryutsu BMS uses various relay servers to exchange messages via the Internet. Therefore, it faces such risks as wiretapping, malignant alteration or spoofing at these relay servers. Examination was started in 2006 on security measures using electronic certificates that would effectively eliminate these risks.
The use of certificates for the pilot of the EDI mentioned above was confirmed and a policy for certificates of the common certification form issued by certificate authority and other rules were established. As of July 2009, two companies have started certificate authorization services using the policy and rules.
In addition, the examination of a standard communications protocol for transmitting Ryutsu BMS messages was started in 2006. Considering the global standard, the degree of diffusion in Japan, and a protocol that could be adopted not only by large businesses but also by small and medium ones, it was decided to recommend three protocols-EDIINT AS2, ebXML MS and JX Protocol (*3). To ensure compatibility when using each of the protocols, a guideline was published for the interpretation of the specifications, recommended parameter values, important points when implementing the protocol, and other related matters.

*3. JX Protocol: Communications standard protocol for pull-type message transmission using the international standard SOAP-RPC. It can be used on the Internet. It can transmit Kanji characters and attached images, too.

After the standard was established, steady efforts would be important to maintain and manage as well as publicize and diffuse it. If the standard were left as it is, it would not be revised according to increased applications and each company would interpret it as they liked, ultimately resulting in a situation where the standard would no longer be a standard. Thus examination were made as to what functions and organizations were needed to carry out such tasks as the revision and publication of the standard and promotion of the such revision.
Based on the outcome of the examination, it was determined to establish the Supply Chain Standards Management & Promotion Council (see 6.1 for more detail) in April 2009 to maintain and manage the standard through the consensus of the related industries.
GS1 Japan is also holding briefings on the new standard EDI in major cities throughout Japan to diffuse it and is hosting seminars on the Ryutsu BMS every month in our office.