Discover why Walmart switched from VANs to AS2 for EDI—boosting security, reliability, cost savings, and supplier integration across its global supply chain.
Udith Gunaratna
Published: 28 Apr 2025
Walmart, the American retail giant, is a name that needs no introduction. With annual revenues surpassing $600 billion, the company operates an extensive global network of discount department stores, grocery outlets, and hypermarkets—massive stores that combine the functions of a supermarket and a department store.
Given the scale of its operations, Walmart collaborates with hundreds—if not thousands—of suppliers worldwide. To manage this vast supplier network efficiently, Walmart began adopting Electronic Data Interchange (EDI) in the late 1980s. EDI enables the electronic exchange of standardized business documents—such as purchase orders, shipment notifications, invoices, and inventory updates—dramatically streamlining supply chain processes and reducing manual workloads.
Initially, Walmart relied on Value-Added Networks (VANs) to facilitate EDI communication with its suppliers and business partners. However, in a strategic move in September 2002, Walmart announced its transition to the AS2 protocol (Applicability Statement 2) for EDI exchanges. In doing so, it required all suppliers to adopt the AS2 protocol as well.
So what prompted Walmart to make this shift from VANs to AS2?
In this article, we’ll break down the key reasons behind Walmart’s move to AS2 and explore how this change contributed to greater efficiency, security, and cost savings across its supply chain network.
One of the most compelling reasons Walmart adopted the AS2 protocol is its robust approach to data security. In a retail ecosystem where sensitive business information is exchanged daily, protecting that data is critical.
AS2 enhances security by encrypting data at the sender’s end, ensuring that only the intended recipient can decrypt and access it. This end-to-end encryption significantly reduces the risk of data breaches or unauthorized access. In addition, AS2 uses digital signatures to authenticate each message. This means the recipient can verify not just the integrity of the message, but also its origin—ensuring it hasn’t been tampered with and that it genuinely comes from a trusted partner.
Given Walmart’s extensive and sensitive supply chain communications, these security features were a major factor in choosing AS2 over any other less-secure traditional protocols.
Beyond security, another major advantage of the AS2 protocol is the reliability it offers in message delivery and integrity—an essential factor for a high-volume retailer like Walmart.
One key feature is the Message Integrity Check (MIC). This process ensures that the content of a message remains unchanged during transmission. Both the sender and the receiver calculate a digest (or hash) of the message using the same algorithm. If the values match, it confirms the message was not altered or corrupted in transit.
Another critical component of AS2 is the Message Disposition Notification (MDN). This is essentially an electronic receipt: once the recipient successfully receives and processes a message, they send back an MDN as confirmation. This provides the sender with assurance that the message reached its destination and was handled appropriately.
These reliability features are vital in Walmart’s context. A minor alteration—like a single incorrect character in an invoice—could result in costly errors. Likewise, ensuring that EDI documents such as purchase orders and advance ship notices are reliably delivered and acknowledged helps prevent delays, stock discrepancies, or supply chain disruptions.
Another significant factor behind Walmart’s decision to switch to the AS2 protocol was cost savings.
Traditional Value-Added Networks (VANs)—once the standard method for exchanging EDI documents—were notoriously expensive. These networks required specialized infrastructure to operate, and with only a limited number of providers in the market, businesses had few options and little negotiating power when it came to pricing.
In contrast, AS2 operates over the public internet, eliminating the need for costly, dedicated infrastructure. This shift drastically reduced the cost of EDI communication. It also opened the door for a wide range of software providers to offer AS2 solutions at competitive prices, sparking innovation and affordability across the industry.
For Walmart, these cost savings were twofold: not only did the company significantly cut its own operational expenses, but its suppliers also benefited. By no longer relying on expensive VANs, suppliers—especially smaller ones—were able to adopt EDI through affordable AS2 solutions. This allowed Walmart to onboard a broader range of suppliers into its digital supply chain, boosting efficiency while expanding its product offerings.
The result? A leaner, more cost-effective supply chain that supports scalability and diversity without breaking the bank.
Standardization was another key factor behind Walmart’s decision to adopt the AS2 protocol. Unlike proprietary systems or fragmented protocols, AS2 is based on a well-documented, widely accepted standard, ensuring that different AS2 software solutions are interoperable. This means suppliers can use the AS2 solution of their choice and still communicate seamlessly with Walmart’s systems—no compatibility headaches involved.
This level of standardization also allowed Walmart to streamline and simplify the supplier onboarding process. With clearly defined AS2 implementation guidelines, many suppliers can complete the setup on their own—without heavy involvement from Walmart’s internal teams. Suppliers can even self-test their AS2 configurations, identify and fix issues independently, and ensure compliance before going live.
The result is a faster, more efficient, and less error-prone onboarding process that scales well—even as Walmart continues to expand its network of suppliers across the globe.
Walmart’s decision to transition from traditional VANs to the AS2 protocol marked a pivotal moment in modernizing its supply chain operations. By embracing AS2, the company gained significant advantages—enhanced data security, greater reliability, reduced costs, and a standardized, scalable system that simplified supplier integration. These benefits not only helped Walmart optimize its own processes but also empowered its suppliers, creating a more agile and collaborative supply chain network. As businesses continue to look for ways to innovate and stay competitive, Walmart’s move to AS2 stands as a prime example of how technology-driven decisions can deliver long-term value across an entire ecosystem.
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