From the Desk of Tom Guzik, Manager of B2B EDI Solutions at IDEA
Welcome to the second installment of EDI Expert Insights! Today we’ll cover five of the top ten EDI documents traded across IDEA’s Industry Data Exchange (IDX)and discuss how adding these EDI transactions into your portfolio can improve your operational efficiency.
EDI Purchase Order (850) – The EDI purchase order is one of the standard “bread and butter” document types and is the most-commonly used transaction. The sender (e.g. distributor) benefits because they create an electronic output from their order management system populated with accurate manufacturer pricing and product codes (accuracy assured if obtained from the IDW). This eliminates key stroke errors from both the sender and receiver (e.g. manufacturer) and prevents the resulting costly returns, credits and delayed deliveries. Additionally, when an order is sent electronically, the receiver is able to store the exact information provided by the customer in their order fulfillment systems, and use it on response documents such as the EDI invoice.
EDI Invoice (810) – The EDI invoice is another common EDI transaction that is typically requested by trading partners and internal company department leaders. The EDI invoice leads to huge cost-savings by eliminating print invoices, envelope-stuffing, postage and mail drop-off. Faxing a document does achieve similar benefits, but has a critical gap. Common issues such as machine malfunctions and lost documents could prevent the fax from reaching the correct contact and there is no assurance the fax was received. Invoice processing is one of the most labor-intensive processes at a company, and also one of the easiest to automate. When I participated in an eCommerce pilot project for an electrical manufacturer years ago, one of the key findings showed that a distributor pilot participant leveraged the resulting efficiency by redeploying a full-time staff member from their Accounts Payables department into their Inside Sales department to generate additional revenue for the company.
EDI Advance Ship Notice (856) – Advance ship notices (ASN) are very beneficial to folks working in the receiving docks. The ASN contains the product detail information of what was tendered to the freight carrier of the supplier that fulfilled the order. The details contain the quantity of product shipped, freight carrier name, tracking numbers, ship/deliver dates and product packaging information. This fairly complex but valuable EDI document enables a receiving department to effectively schedule inbound deliveries during the course of the day. The ASN can also reduce the time to receive inventory by integrating the GS1-128 shipping container barcode and or the GTIN product package barcode. The receiver of the shipment is then able to scan the barcode label and link it to the data sent via the ASN. The entire shipment can be received into the inventory management system in seconds versus spending hours manually entering the products into the system.
EDI Purchase Order Acknowledgement (855) – The purchase order acknowledgment (POA) is the unsung hero of EDI documents; it essentially echoes back the receiver’s interpretation and response to the purchase order back to the sender. For example, the POA recaps what items are being ordered, any changes in quantities, and any changes in pricing. It can also advise if an item is backordered along with ship and deliver dates. As a result, the company making the order has the ability to update their system with the changes and prevent data mistakes when the supplier sends the EDI invoice and ASN documents.
EDI Functional Acknowledgement (997) – Yes, I’m including the EDI functional acknowledgment (FA) as part of the top ten list because, even though it is a small EDI document (only a couple bytes), it enables the sender and receiver EDI systems to reconcile the EDI document cycle. For example, when your trading partner sends a valid EDI document, your EDI translator will send back an “accepted” EDI FA that notifies your trading partner that you successfully received the EDI document. If the trading partner sends you a “rejected” FA, you immediately know there was something wrong with the EDI document and can move quickly to correct the issue and then resend the document to avoid costly delays in processing and chargebacks for late documents.
Feel free to contact me at email@example.com with your EDI questions, or ask questions in the comments section of this article. The next five most popular EDI documents will be analyzed in next month’s edition of EDI Expert Insights.