EDI for the Supply Chain, Manufacturing and Distribution

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For decades, Electronic Data Interchange (EDI) has helped the supply chain, manufacturing and distribution keep the industry moving products that are distributed to the mass market by retailers such as Target, Amazon, Walmart, Lowes, and more.

EDI, with its global connectivity capabilities, extends a company’s reach to a broader network of trading partners throughout the supply chain. The savings in time and money, along with the boost in sales and accuracy, enhances the relationship between the customer and partner.

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EDI offers several benefits for Supply Change Management:

Instant/Real-Time Exchange of Documents
Information is exchanged and transactions are executed in real-time, eliminating redundant, time-consuming and error-prone tasks.

Greater Accuracy
By removing human intervention the risk of manually inputted data is eliminated and all information is exchanged electronically. Orders that are submitted through EDI are accurate and have faster confirmation. Data quality and reliability are significantly improved.

Cost and Time Savings
EDI eliminates paper-driven processes that can result in higher costs and additional time required for trading partners to conduct their business. EDI takes seconds to complete a transaction, compared to possibly an hour or more for the same task when done manually. The costs of labor and delay can add up substantially over time.

Reduced Waste
EDI supports environmentally sustainable practices by eliminating outdated paper-based processes that generate waste for our environment.

Improved Deliverables
EDI streamlines all types of communication within the supply chain which means more sales and improved partner and supplier relationships, leading to greater profit potential. The sales cycle is shortened and orders are processed more rapidly, allowing superior deliverables.

Better Inventory Management
EDI provides information to maintain optimal inventory levels. This means you can meet immediate demand as well as optimize stock levels for future needs. You get the latest information to set benchmarks and alerts to allocate resources, prevent shortages or excess inventory.

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The Typical EDI Supply Chain Cycle

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• Supply Chain EDI starts with the Purchase Order (EDI 850) that is sent from the retailer to the supplier. If a third-party warehouse (3PL) or other outside warehouse is involved, a carbon copy of the Purchase Order can be sent to them so they can play their part in the supply chain process.
• The supplier sends back a Purchase Order Acknowledgement (EDI 855). Information in an 855 can be leveraged to alert users of critical changes such as price discrepancies, line cancellations or delivery delays. PO’s are updated in the ERP to provide visibility to users and to alleviate manual entry.
• One of the most powerful features of supplier-side EDI is the receipt of Advanced Shipping Notice (ASNs/EDI 856) from suppliers. During the EDI fulfillment process, the vendor sends an ASN at the time of shipment. The ASN information is integrated into the company’s ERP system, providing visibility into goods in-transit; when the goods arrive, the scan of a single barcode label can receive the entire shipment, including serial number and lot number registration.
• The supplier or manufacturer sends an Invoice (EDI 810) to request payment. The invoices can be customized with a 3-way match against the PO, PO Acknowledgment and ASN, identifying any discrepancies and alerting the proper personnel for research and resolution.

Additional transactions can be used including the Remittance Advice (EDI 820) for payment confirmation, Warehouse Shipping Order and Warehouse Shipping Advice (EDI 940/945) to electronically communicate shipment information with a 3PL, or a Purchase Order Change Request (EDI 860) to communicate modifications to PO’s.

Every retailer has unique requirements and may even have different requirements for different supplier types, so your EDI needs will be specific to your unique relationship with your customer. Data Communication Solutions’ EDI Consultants can ensure you are fully integrated and maximizing the benefits of EDI to gain full competitive advantage. Contact us for a no-cost assessment today!