EDI and specifically the Advanced Ship Notice (EDI 856/ASN) provide effective supply chain communication and efficient data exchange, which are crucial for B2B success. Electronic Data Interchange (EDI) is a technology that allows companies to exchange business documents electronically, streamlining processes and reducing errors.
Among the various EDI transaction sets, the EDI 856, plays a vital role in the supply chain. It provides detailed information about shipments, enabling recipients to prepare for incoming goods, enhance inventory management, and optimize logistics. In this blog, we’ll delve into the significance of the EDI ASN 856, how it functions within the supply chain, and its impact on improving operational efficiency and accuracy for businesses. Join us as we explore the essential role this document plays in ensuring a seamless flow of information from suppliers to retailers.
Table of Contents
- What is an EDI 856?
- The Importance of EDI 856 in Business
- Common Challenges of EDI 856 and How to Overcome Them
What is an EDI 856?
Most people know that the Advance Ship Notice (ASN), known in EDI language as ANSI X12 856 and in EDIFACT circles as DESADV, is used to communicate details about a shipment to your trading partner. The ASN typically contains information about the shipment and order details – products shipped with the order, type of packaging and carrier information. The ASN is somewhat similar to a Bill of Lading (BOL), except that rather than accompanying a shipment like a paper BOL, the ASN is sent via EDI when the order is shipped.
Timing is critical here as it must arrive before shipment does, which is why it’s called the Advance Ship Notice. And it must be accurate – missing data such as the BOL# and the Pro# can result in costly charge backs. The value of the ASN lies in the fact that when the receiving dock scans the GS1-128 bar code label on the carton, their system can access the previously received ASN to determine the carton contents, thereby saving time by not having to open the carton. Secondly, the ASN informs the receiving party of any difference between what was expected (from the PO) and what was actually shipped, helping the supply chain move along more accurately and efficiently.
Types of EDI ASNs
There are a few things though that can differentiate one 856 from another that are much less widely understood. The first is the difference between Standard Pack, Simple Pack, Pick & Pack and Tare Level. With a Standard Pack 856, the hierarchy goes from shipment to order to item to pack. In other words, only one type of item (UPC) is in a carton, but there may be more than one pack (carton) of those items. A Pick & Pack 856 is slightly different because the hierarchy goes from shipment to order to pack to item. This means each pack (carton) can have several different item types (UPCs).
Less common but another type we see occasionally is the Tare Level ASN. The Tare Level hierarchy goes from shipment to order to pallet (tare) to pack to item, so it’s similar to a Pick & Pack with one extra level. Depending on the items being shipped, the Pack (Carton) level may not be required, which brings us to the Simple Pack, also known as the No Pack. This type of ASN has no pack level information and the hierarchy goes from shipment to order to item.
Why Does the EDI 856 have All these Codes?
There’s the the SSCC (SSCC-18), the GS1-128, carton ID and the UPC…what does it all mean?
The GS1-128 label usually contains several elements, including ship from information, ship to information, carrier information, PO number, and a bar code.
The carton ID is the same as the SSCC (SSCC-18). The SSCC number (Serial Shipping Container Code), comprised of an extension digit, a GS1 company prefix, a serial reference and a check digit, is included within the carrier information on the GS1-128 label. The SSCC number must be unique and the number must not be reused within a certain time frame that is sometimes specified by your customer/vendor.
The UPC number and corresponding bar code is on the actual product and allows the retailer to bring up price information by scanning the bar code. Money exchanges hands and the consumer takes their purchase, which signifies the end of the supply chain.
The Importance of EDI 856 in Business
Inventory Management and Shipment Tracking
One of the primary business benefits of the EDI 856 is its ability to provide detailed information about incoming shipments. This not only improves inventory accuracy but also supports better planning. With timely and precise data about what products are arriving and when, businesses can adjust their inventory levels accordingly.
This proactive approach reduces the risk of stockouts and overstock situations, leading to a more balanced and efficient inventory system. There are many verticals that utilize the 856: logistics, manufacturing, distribution, retail, and automotive to name a few. A good ASN example is how an OEM (original equipment manufacturer) uses it within the automotive industry. The OEM sends a an EDI 850 (PO) to their supplier, along with an EDI 830 (Planning Schedule) and an EDI 862 (Shipping Schedule).
Sometimes, businesses do not use the 850 at all, but they will usually send the 850 initially as a blanket order. The supplier then sends 856s according to the EDI 862 (Shipping Schedule) rather than in response to the 850.
Improved Accuracy
Another critical advantage of using the EDI 856 is the significant reduction in manual errors. Traditional methods of communication, such as phone calls or emails, are prone to misinterpretations and inaccuracies. However, by automating the exchange of shipping information, EDI 856 ensures data integrity. Eliminate discrepancies by standardizing and formatting each shipment detail to ensure that all parties access the same accurate information. This high level of accuracy not only fosters trust between trading partners but also reduces the potential costs associated with incorrect shipments, such as chargebacks and restocking fees.
Real-Time Updates
You cannot overstate the importance of real-time updates in today’s fast-moving supply chain environment. The EDI 856 plays a crucial role in delivering immediate shipping updates to trading partners. This transparency enables companies to react swiftly to any changes in shipment schedules or delays, enhancing their overall responsiveness. As soon as goods are shipped, the ASN is generated and sent to the recipient. This immediate notification allows businesses to prepare for product arrivals, ensuring they allocate warehouse space and resources effectively. The result is a smoother operation that minimizes downtime and enhances productivity.
Common Challenges of EDI 856 and How to Overcome Them
Technical Difficulties
Implementing EDI 856 can significantly enhance supply chain efficiency, but it is not without its technical challenges. One common issue businesses face is system incompatibility. Different organizations may use varied EDI software or ERP systems, leading to difficulties in integrating data formats. For instance, if a supplier’s system does not support the same EDI standards as a retailer’s, this can result in delays and miscommunication.
Another frequent challenge is data format mismatches. You must ensure that you fill out specific data fields accurately. If the sending system does not align with the required standards—such as using the wrong codes or formatting dates inconsistently—it can lead to errors in shipment details. These discrepancies can disrupt logistics operations and necessitate time-consuming corrections, underscoring the need for thorough compatibility checks before implementation.
Ensuring Data Accuracy
Maintaining data accuracy is critical in the implementation of EDI 856. Several strategies can help ensure that the information exchanged is reliable. One effective approach is to implement validation processes. One strategy uses automated checks to verify data against predefined criteria before sending it. For example, ensuring that item codes match the corresponding inventory records can prevent errors from propagating through the supply chain.
Regular audits of EDI transactions are also essential. Conducting periodic reviews allows organizations to identify any recurring issues, such as missing data points or incorrect formats. By addressing these problems proactively, businesses can improve the overall accuracy of their EDI processes and build greater trust with trading partners.
Ensuring Partner Compliance
To fully realize the benefits of EDI 856, it’s crucial to ensure that all trading partners comply with its requirements. Clear and open communication is fundamental in this process. Establishing ongoing dialogues with partners about EDI expectations can help clarify any ambiguities and ensure everyone is on the same page.
Additionally, creating and disseminating standardized procedures for EDI transactions enhances compliance. Providing partners with comprehensive guidelines on how to format and submit EDI 856 documents reduces misunderstandings and errors. This might include training sessions or workshops to familiarize partners with the necessary protocols.
Wow, This is a Lot of Information
Despite the technical elements and subtle differences described above, keep in mind the 856 is just an electronic packing slip. If you think about it along those terms, it’s actually not that difficult to imagine. Although you must follow a standard, your trading partners can offer an almost infinite number of possibilities on the ASN. And once you have your document mapped, preferably by our VelociLink™ team, we must also keep track of changes and updates your trading partner makes to their maps. This is in addition to keeping up with communication changes, transmission times, trading partner contact info and holiday shipping schedules. Never a dull moment in the wide world of EDI and data integration…
Overwhelmed? Don’t worry – contact the experts at GraceBlood and we’ll ensure that your 856 processing runs like a well-oiled machine.
