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The Trials and Tribulations of the EDI 852

Topics: Benefits of EDI, Data Integration, EDI, EDI considerations, EDI Documentation, EDI Technology, Supply Chain

Picture appears courtesy of D.C. Atty.  This week’s blog was written Aurora team member Kim Zajehowski.  Many of our clients ask: How can I track our customers’ product sales and on hand inventory? The answer is the EDI 852, also known as the Product Activity Data transaction.  This document can be used to convey that very information to you directly from your customers. The 852 transaction is structured so the customers provide a report to you via EDI with inventory figures for week ending dates typically ending on Saturdays. The transmissions usually are generated by customers on Sunday-Tuesday for the previous week’s snapshot. Quantity Sold (QS), Quantity On Hand (QA), Quantity Returned (QU), Quantity on Order (QP), Quantity in Bonds (QF), and Quantity Inventory Adjustment per physical inventory (QT) are the standard quantities that you may see provided for by your customer. The two most used are the Quantity Sold and Quantity on Hand. The Quantity Returned or a negative Quantity Sold may have to be considered as reducing the overall Quantity Sold on a given product if provided.

Many clients use this data for sales forecasting as well as to post Month to Date figures, Year to Date figures, and related previous month figures as well. At month end, the figures are rolled into previous month’s buckets. The EDI 852 however, has its own share of “gotchas” unless you accommodate for a few scenarios.

First and foremost, you are only as good as the data that is being provided by your customer. Many times a customer may miss the fact that you do business with them under different vendor numbers, divisions, or even departments. When they transmit the 852 data, it is important that they are sending you all of your product data or your projections may not be as accurate as you think they are. Keep this in mind as you add new divisions, departments, and/or vendor numbers to existing customer relationships. You may have to revisit your 852 contact person to ensure that the new vendor numbers, divisions, or departments have been added to their process.

An important question to ask of your customer is: What are your EDI 852 processing rules? Some customers send a separate Quantity on Hand 852 transaction for each vendor/department for your company. Others only provide a Quantity On Hand for those items that they have sales for that week.  This can throw off your figures as they may still have On Hand quantities for items that have not sold and you may not see that if you don’t accommodate for it. Discontinued items may also be included in the 852 transmissions as the customer may have Quantity On Hand or even Quantity Sold on these items. You may or may not be interested in reporting those discontinued items.

The frequency of when a customer sends in Quantity On Hand figures is a factor in your processing as well. Some customers send you this information every week for all products that they have whether they are at zero inventory or not. Others will report only those items that have inventory so you must zero it out before you process their figures. Still others will only provide it on a monthly basis. There are few that will only send Quantity On Hand figures on demand or even yearly. It is up to you to determine when you need to reset your Quantity On Hand figures for that customer whether it be on a weekly, monthly, yearly, or based on when they provide Quantity On Hand data.  For those customers that provide the Quantity On Hand on a monthly or yearly basis, you may need to add to their Quantity On Hand figures with invoiced or shipped quantities for your products in order to have more accurate figures for forecasting for the month.  This will help you keep a running Quantity On Hand for that particular product.

The format of the 852 data varies by customer. Inventory can be sent at high level, at a store level, or by different retail prices. Be careful with how the data is captured to be sure that you accommodate for those differences.

Vendor Managed Inventory (VMI) processing could be asked of you based on a customer’s 852 data. A customer expects their suppliers to use the 852 data to be able to determine whether or not a PO should be generated.  Oftentimes you have to create a PO Acknowledgement for them for each item that is at a certain level of On Hand inventory. This PO Acknowledgement (855) is sent to the customer. It is used to generate a PO to transmit for fulfillment. This process can get costly if your inventory figures are not accurate and they are cutting POs when they already have enough inventory or they run out when you think they have plenty on hand.  See this blog for more info on VMI.

So my recommendation is that while the 852 data can be a great tool for forecasting future sales numbers, it is also important to recognize that not all customers handle the transaction the same way and not all customers can provide this information to you. The numbers that are derived are based on your customers’ figures.  Again, you are only good as the data being provided. You have to accept the number as a ballpark estimate. You may find that you have to supplement the 852 process by using your system to keep a running On Hand figure by product for a customer based on your invoicing process or shipping process. I hope you find this informative as these are just the trials and tribulations of working with the EDI 852 transaction and my experience.

Learn more about how to thrive in a world full of supply chain challenges in our free eBook: Supply Chain Insights

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