This post was updated to reflect current trends and information.
In this article, we want to talk about the top EDI messages commonly used by trading partners in supply chain management. We will explain the purpose of the EDI messages and their benefits.
What is EDI?
The acronym of EDI is Electronic Data Interchange. The main objective of EDI is to replace the exchange of paper-based business documents.
EDI is the exchange of structured business documents used in B2B. The implementation of EDI is almost limitless. EDI is present in every commercial activity:
– supply chain management
– Banking and finance
Electronic data interchange (EDI) is helping businesses to automate specific business processes, as well as to cover an entire cycle of logistics.
What does EDI mean in logistics?
In short terms, an EDI is a flow where one business partner can create digital and electronic “business documents”, compliant to a specific standard (i.e. X12, EDIFACT, Tradacom, RosettaNet,) and transfer to the second party in a secured telecommunication channel.
Useful: eBook: EDI – Key Information You Need to Know
The most commonly used set of EDI messages
Following is the list of o the most commonly used EDI transaction sets used in today’s business space, from supply chain management to e-commerce, you will find the following documents as the basics for EDI exchange:
– EDI 846 Inventory status
– EDI 850 Purchase Order
– EDI 855 Purchase Order Acknowledgement
– EDI 856 Ship Notice/manifest (ASN)
– EDI 860 P/O Change
– EDI 810 Invoice
The above EDI messages, called “must-have” because they are necessary to automate the most important trading cycle in the supply chain management, eCommerce, and Drop-ship space.
Many companies do not limit themselves only on the above EDI messages, they can decide to leverage other transactions and business documents to improve their supply chain effectiveness; as an example, they can request to add the 753, 754, and other documents related to pickup and delivery…
Useful: EDI Transaction Types – Complete List of EDI Transactions
EDI messages types
EDI 846 Inventory status
Most trading partners in the supply chain and eCommerce space, request that their suppliers update them with their inventory status by sending the EDI 846 document. You can check the details about this document in this article.
EDI 850 Purchase Order
Often, this is the first type of EDI message that companies such as retail chains, manufacturers, warehouses, or 3PL-providers to exchange when they switch to EDI.
EDI 850 contains:
- Order number
- Required date and time of delivery
- Reference to the contract or contract number
- Sender and customer information, the place of delivery
- Information on the contents of the order (bar codes, quantity, the name of the goods, multiplicity of packaging).
With the EDI 850, the product ordering process goes faster and becomes cheaper as the number of people involved in the process is reduced. Thanks to the fast and guaranteed transfer of information about the order, the supplier improves the reliability of the deliveries.
EDI 855 Purchase Order Acknowledgement
EDI 855 response to the Purchase Order is a “couple” message for EDI 850. The supplier sends EDI 855 to the buyer in accordance with the order value or suggesting to make changes regarding order quantities. This helps to avoid disruption in the supply chain.
Useful reading: What is EDI 855 Purchase Order Acknowledgment?
EDI 856 Ship Notice/manifest or ASN
ASN is a pair of EDI 861 Receiving Advice.
These notifications are exchanged between the business partners at the stage of shipment and receipt of the goods.
The supplier sends ASN immediately after the shipment. This EDI message helps to simplify and speed up the process of acceptance of goods. EDI 856 Ship Notice/manifest contains detail shipment information:
- Shipment information (bill of lading number, ship to, ship from, etc.)
- Unit load information about a physical shipping item.
- Order information such as purchase order number, buying place, division number, etc.
- Tare information about the pallets.
- Pack information about the shipping package (cartons, racks, bags, etc.,)
- Item information about the shipped goods, such as SKU identification, quantity shipped, etc.
Companies that have implemented ASN significantly increase the speed of receiving goods and entering data into the business system – with EDI 856 you do not need to drive numbers manually from the invoices. ASN information can go directly to the business system.
For the big trading retailers, this type of EDI message is a vital necessity. Advance notification of the goods delivery helps to prepare for its acceptance. Even before the supplier’s truck arrives, the retailers already have a list of the goods sent.
EDI 860 Buyer triggered P/O change
EDI 860 is a transaction sent to the supplier advising him about a change in the Purchase order sent earlier. The change can be to increase/decrease/delete quantities on an order or to change dates.
EDI 810 Invoice
EDI 810 Invoice is an electronic invoice transaction sent by the supplier to the buyer.
Learn more about x12 810 Invoice in this article: What is an ANSI ASC X12 EDI 810 invoice?
Becoming EDI Compliant
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Contact us today for more information and for pricing.
What is EDIFACT? | UN / EDIFACT standard overview
Electronic Data Interchange: Key Information You Need to Know