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The Bullwhip Effect in Supply Chains: What It Is and How to Keep It Under Control

What is the Bullwhip Effect in Supply Chains? Understanding Causes and Impacts on Inventory and Efficiency

If you’re in logistics and supply chain management, you’ve probably heard of the bullwhip effect, also known as the Forrester effect. It’s a common challenge that can create huge, costly headaches for businesses. Basically, it’s when small changes in customer demand end up creating much bigger waves in the supply chain—sometimes all the way up to raw material suppliers. So, something as small as a sudden spike in demand for a product can snowball into major inefficiencies, inaccurate inventories, and even excess stock no one ends up needing.

What Exactly Causes the Bullwhip Effect?

There are a few big drivers behind the bullwhip effect:

  1. Inaccurate Forecasting: Every player in the supply chain—from retailers to manufacturers—tries to predict demand. But forecasts are rarely perfect, so each party may over- or under-order to cover themselves.
  2. Order Batching: Many businesses order in bulk to cut costs. But this batch ordering can cause uneven spikes in demand, which don’t actually reflect what customers want right now.
  3. Price Changes and Promotions: Discounts or temporary deals can drive sudden surges in orders. Great for sales, but not so much for the supply chain—it often means that everyone upstream scrambles to keep up, which can lead to an oversupply later.
  4. Limited Visibility Across the Supply Chain: Without transparent, real-time data, every participant in the chain relies on their own (sometimes outdated) info. This leads to decisions that don’t always sync up with actual customer demand.

What Exactly Causes the Bullwhip Effect?

How Does the Bullwhip Effect Impact Your Business?

The bullwhip effect in the supply chain isn’t just a theoretical problem—it can have a real impact on profitability, efficiency, and customer satisfaction. When supply chains are reacting to outdated or inaccurate data, they’re prone to overstocking, understocking, and inaccurate inventories. This translates to wasted resources, higher carrying costs, and lost sales if products aren’t available when customers need them. And these inefficiencies affect nearly every part of the business, from supply chain management to the customer experience.

How to Prevent the Bullwhip Effect: Practical Solutions

Now, let’s talk solutions. With all the buzz around supply chain analytics and retail analytics platforms powered by AI, there’s good news: you don’t have to just put up with the bullwhip effect. Solution like Electronic Data Interchange (EDI) can help to smooth out these swings in demand and keep your supply chain running more predictably.

Expanding on Real-Time Data Accuracy with EDI Integration, let’s dive deeper into the EDI process and how specific EDI documents can help avoid or minimize the bullwhip effect in the supply chain.

Real-Time Data Accuracy with EDI Integration

EDI allows companies to seamlessly exchange business documents with their supply chain partners, so everyone is finally on the same page — whether retailers, suppliers, or manufacturers.

With EDI, real-time data flows throughout the supply chain, so everyone is working with the same numbers and the same information. This visibility is powerful because it helps everyone avoid the wild swings in ordering that often lead to the bullwhip effect.

Key EDI Documents That Help Keep the Bullwhip Effect in Check

To really understand how EDI can make a difference, let’s look at a few basic EDI documents that are crucial for keeping supply chain data accurate:

  1. EDI 850 (Purchase Order): This is where everything starts. When retailers place an order, they use the EDI 850 to tell suppliers exactly what they need and when they need it. This helps suppliers plan inventory and production right away, so there’s less scrambling to meet demand at the last minute.
  2. EDI 855 (Purchase Order Acknowledgment): After receiving the purchase order, suppliers respond with the EDI 855. This document confirms the order and lets the buyer know if there are any changes or adjustments. It’s a simple way to make sure both sides are on the same page from the start.
  3. EDI 856 (Advanced Shipping Notice): When an order is shipped, the supplier sends the EDI 856 to let the retailer know what’s on its way. This heads-up means the retailer can plan for incoming stock and avoid placing extra orders just because they’re unsure of inventory status.
  4. EDI 846 (Inventory Inquiry/Advice): This document is basically a real-time inventory update. By sharing up-to-date stock levels, both suppliers and retailers can adjust orders based on what’s actually available, helping everyone avoid over-ordering or under-ordering.
  5. EDI 860 (Purchase Order Change Request – Buyer Initiated): Sometimes retailers need to adjust an order after it’s been placed—maybe demand has changed, or forecasts were off. With the EDI 860, they can make those changes quickly without starting the order process over. This keeps things moving smoothly and helps both sides respond flexibly.

Integration price

How EDI Helps the Supply Chain Flow Smoother

So, here’s how it all plays out in a typical situation:

  • A retailer sends an EDI 850 Purchase Order to their supplier.
  • The supplier replies with an EDI 855 to confirm the details.
  • If stock levels change, the supplier shares an EDI 846 Inventory Update to keep everyone informed.
  • When the order is on its way, the EDI 856 Advanced Shipping Notice gives the retailer a clear picture of when to expect the inventory.
  • And if something shifts with demand, the retailer sends an EDI 860 Change Request, making it easy to adjust the original order.

All of this real-time data sharing cuts down on misunderstandings and delays. Everyone in the supply chain has what they need to act quickly and accurately, so there’s less overstocking, fewer surprises, and a much lower chance of reacting in ways that cause the bullwhip effect.

At EDI2XML, we make these EDI processes simple, fast, and effective, so you can keep your supply chain on track and avoid the typical headaches that come with demand fluctuations.

Benefits of Implementing EDI for Supply Chain Management

EDI Enhances Visibility and Transparency: When your supply chain has access to the same data on inventory, orders, and customer demand, there’s less room for costly surprises. Real-time transparency helps each player in the supply chain make better decisions based on accurate, up-to-date data.

Faster Reaction to Demand Changes: With EDI integration, demand changes get communicated instantly. So, if you’re running low on a popular item, suppliers get notified in real-time, allowing them to respond more efficiently. This kind of responsiveness is crucial to cutting down the exaggerated reactions that fuel the bullwhip effect.

Streamlined Communication Across the Supply Chain: Relying on manual processes—like emails or spreadsheets—to update inventory or demand data can be slow and prone to error. EDI ensures that critical data updates flow automatically between systems, improving response times and helping your business stay agile.

Seamless EDI Integration with ERP and CRM Systems

When it comes to effective supply chain management, ERP – Enterprise Resource Planning (like SAP or Microsoft Dynamics) and CRM – Customer Relationship Management (like Salesforce), play a huge role.

Integrating EDI with ERP and CRM systems is essential for a smooth supply chain. EDI links your systems to those of your partners to share real-time data across the entire chain.

At EDI2XML, we specialize in connecting EDI with ERP and CRM systems, so data moves instantly from one system to another.

Imagine you’re a retailer using Salesforce for customer orders and SAP for business operations, and EDI for communicating with suppliers. When a customer order comes in through Salesforce, it’s instantly visible in SAP, so inventory gets updated right away. Then, the EDI system can automatically send a purchase order to the supplier, ensuring there’s no delay. This real-time communication prevents issues like overstocking, missed orders, or lag in responding to demand changes.

How EDI2XML Can Help

At EDI2XML, we specialize in EDI and business system integration, with a focus on creating seamless data exchanges that improve supply chain management. Our EDI solutions like Fully Managed EDI or EDI Web Service are designed to make data sharing smooth and accurate, so your business can prevent the bullwhip effect and work with reliable data, every time.

Imagine not having to worry about inaccurate inventories or overcompensating for demand—just a more efficient, data-driven supply chain. Contact us today for a free consultation with our experts.

Contact EDI2XML today for a free consultation

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How EDI Streamlines Supply Chain Management

Companies are constantly looking for ways to optimize their supply chain, ensuring they can quickly adapt to market changes and meet customer demands on time.

In this blog post, let’s explore how EDI streamlines supply chain management and why it’s essential for businesses today, and the benefits it brings to modern businesses.

Introduction: Electronic Data Interchange (EDI) and Supply Chain Management

The evolution of technology, standards and protocols, revolutionized this field. Electronic Data Interchange (EDI) stands is one of the main facilitators at the level of supply chain innovation.

EDI (or Electronic Data Interchange) is a standard that allows the exchange of business documents between business partners. It is based on structured format and follows some EDI standards (i.e. X12, EDIFACT…). By automating EDI exchange, business partners will be able to transform most of the manual processes into efficient, real-time tasks, increasing efficiency and eliminating human errors.

What is EDI?

Electronic Data Interchange (EDI) is a technology that allows companies to exchange standard business documents—such as purchase orders, invoices, shipping notifications, and inventory updates—in a standardized electronic format.

I’m not going to go further on this topic, since we already published extensive articles about EDI and its use, which I recommend reading for more information about EDI.

For a more detailed guide on how EDI works and its common use cases, check out our articles:

What is Supply Chain Management?

Supply Chain Management (SCM) refers to complete coordination of the different elements and partners involved in the production flow of any good or service. This flow starts from its initial stages of purchasing and buying raw materials to its final delivery of the finished good to the end-consumer.

It SCM includes the phases of planning, executing, monitoring, and optimizing of all processes involved in transforming a product from being a raw material until it becomes a finished good, and delivered to the end-user.

The goal of SCM is to enhance the efficiency, reduce costs, improve quality, and deliver products faster.

SCM requires a major collaboration between suppliers, manufacturers, warehouses, transportation services, and retailers, ensuring that each step in the chain is executed on-time in a very optimal manner.

Useful: Download the Guide – EDI for Transportation and Logistics

Key Components of Supply Chain Management

For a successful supply chain management cycle, there are important key components that should be considered, planned and implemented.

  1. Planning: This is the strategic phase where companies do their research on how to meet the demand for their products or services.
  2. Sourcing: Sourcing involves selecting one or multiple suppliers who will provide the raw materials, components, or services necessary for production, for a certain product or service.
  3. Manufacturing: In this phase, raw materials are transformed into finished products.
  4. Logistics and Distribution: Once products are manufactured, they must be stored and distributed to consumers. This involves all logistical processes such as warehousing, inventory management, and transportation.
  5. Returns Management: Also known as reverse logistics, this component deals with the return of defective or excess products from consumers. Managing returns efficiently is important to minimize losses and maintaining customer satisfaction.
  6. Information Flow: Throughout the supply chain, there must be a seamless flow of information to ensure that all parties are aware of demand, inventory levels, production schedules, and shipping timelines. This helps to coordinate efforts across the supply chain, reducing delays and errors.

EDI and Logistics

Importance of Supply Chain Management

Supply chain management (SCM) is very important in today’s business landscape, to be able to deliver on-time, low-cost products and services and at a reduced risk. Here are some of the important elements:

  • Reduce Cost: SCM helps reduce costs by improving efficiencies in procurement, minimizing waste, and optimizing transportation.
  • Increase of Customer Satisfaction: Supply chain can enhance customer experience and promote loyalty. Being able to deliver to customers on time and in good condition, will improve customer loyalty.
  • Increase Company’s Agility: SCM helps companies respond to changes in demand or disruptions in the market quickly.
  • Improve of Collaboration: Better communication means better collaboration across suppliers, manufacturers, and distributors all working towards the same objective.
  • Disruption: Disruption of a Supply chain is a risk that is substantial. Such disruption can be due to different reasons (i.e. natural disasters, political instability, or other factors). Such disruptions can significantly impact a business. SCM helps mitigate risks by allowing companies to create and execute contingency plans based on maintaining relationships with multiple suppliers and monitoring global trends.

How EDI Works in the Supply Chain

As described in the above paragraph, Supply chain management (SCM), relies on several parameters to be as efficient as expected, and deliver as per business expectations. EDI has a role to play in every key component of a successful SCM.

a) Planning: during the planning phase, companies part of the SCM exchange their forecast and based on customer demands and historical sales data via EDI; as an example a distribution company will share via an EDI transaction 830 (Productions forecast and scheduling) its production planning.

b) Sourcing and manufacturing: during the sourcing and manufacturing phase within a SCM, companies will exchange via EDI all kinds of transactions to complete these cycles:

    1. Inventory feeds (EDI 846): Ral-time inventory feeds and updates, are sent periodically by suppliers and manufacturers, to their own customers, via EDI 846 transaction. This allows to update them with accurate inventory levels track stock movements.
    2. Orders (EDI 850): When a customer places an order it goes via EDI 850 transaction to the supplier, this process, would eliminate the need for manual order entry and speeds up the order processing time.
    3. Shipping and Receiving: this process in SCM uses a substantial number of EDI transactions, from EDI transactions that concerns the logistics and transportation companies (i.e. EDI 204, EDI 210, EDI 214…) to the actual shipping and receiving transaction (i.e. ASN 856).
    4. Invoicing: After the goods are delivered, the supplier sends an electronic invoice EDI 810 to the customer. The customer can then process the invoice and make the payment electronically, streamlining the entire billing and payment process.

c) Logistics, distribution and returns: again, EDI is present in all of these components in the supply chain:

  1. Logistics and distribution: lots of EDI transactions come to play, when it comes to logistics, and return, EDI 204, 210, 214…
  2. Returns: EDI 180, EDI 894 and EDI 895 are typical EDI transaction for merchandise return.

 

How EDI Works in the Supply Chain

Useful Reading: EDI for Third-Party Logistics providers (3PL)

How EDI Streamlines Supply Chain Management

Following are some EDI attributes, that have an impact on the Supply Chain management SCM:

Faster Communication

When exchanging EDI documents, companies part of the same SCM, are opting for a full automation which means, a real-time exchange of business documents, along with automated flows to process those documents.

Eliminating bottlenecks and human errors. Orders, confirmations, and invoices flow automatically between systems, reducing lead times and allowing businesses to respond faster to changes in demand, inventory levels, or production schedules.

Reduce human errors

Manual data entry is equivalent to human errors. Errors in purchase orders, inventory levels, or shipment details can lead to costly mistakes such as overstocking, missed shipments, or payment delays. Using EDI minimizes these risks by automating data transfers.

Improve data quality and integrity

Standardized formats of data, ensure that information is accurately communicated, which will certainly improve data integrity and quality. No more human errors.

Improve Efficiency

Automating supply chain transactions with EDI leads to significant cost savings, where the most important expense is labor. Typically, the labor cost of manually entering data and correcting errors is substantial.

Exchanging EDI reduces these costs by allowing businesses to process large volumes of transactions automatically.

Improve Inventory Management

Companies exchanging EDI transactions will have a much better inventory visibility to their supplier’s inventory. It will eventually enable JIT (Just-in-time) inventory strategies and control of costs.

Improve Data Security

By exchanging EDI transactions, based on standardized protocols and encrypting the data using EDI communication protocols such as AS2, sFTP, AS3 and other protocols, business partners enhance their compliance and security footprints, ensuring secured data exchange.

Can we help in your EDI integration and automation projects?

Our specialists with over 24 years of experience in EDI integration will be happy to hope on a FREE one-hour Teams meeting to listen to your challenges and offer you the best approach and recommendation.

Just book a time convenient for you in our calendar.

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EDI 211 Motor Carrier Bill of Lading Transaction Set

In this blog, we discuss about ANSI X12 EDI 211 Motor Carrier Bill of Lading Transaction Set. Whether you’re a manufacturer, retailer, or freight forwarder, understanding the nuances of this electronic document is vital for optimizing your logistics operations.

What is EDI 211?

EDI 211 Motor Carrier Bill of Lading is a standard electronic document used in the transportation and logistics industry. EDI stands for Electronic Data Interchange, which is the electronic exchange of business documents between different companies using a standardized format.

EDI 211 ANSI X12 Motor Carrier Bill of Lading Transaction Set is specifically used to exchange motor carrier bill of lading information between trading partners.

Understanding the Functionality of EDI 211 Motor Carrier Bill of Lading

In the exchange of the EDI 211 Motor Carrier Bill of Lading, there are typically two main parties involved: the shipper and the carrier.

Shipper: The shipper is the entity that is sending the goods or products. They generate the bill of lading document, which includes details about the shipment, such as the origin and destination of the goods, the quantity, weight, and description of the items being shipped, and any special instructions for the carrier.

The shipper may also include information about the consignee (the party receiving the goods) in the bill of lading.

Carrier: The carrier (such as FedEx, UPS, or other transportation company responsible for transporting the goods from the shipper to the consignee. The carrier receives the EDI 211 Motor Carrier Bill of Lading from the shipper.
Truck-Transportation EDI

Upon receiving the document, the carrier acknowledges receipt and may also provide updates on the status of the shipment, such as pickup, transit, and delivery information, using other EDI transaction sets like the EDI 214 Transportation Carrier Shipment Status Message.

Shipper Company and Motor Carrier Bill of Lading (EDI 211)

In the transportation and logistics industry a variety of entities can act as shippers and initiate electronic documents such as the EDI 211.

Here are some examples:

Manufacturers: Manufacturers often ship their own products to distributors, retailers, or end customers.

Wholesalers and Distributors: Wholesalers and distributors arrange shipments from manufacturers to retailers or other businesses.

Retailers: Retailers may act as shippers when sending goods from their distribution centers to individual stores.

E-commerce Sellers: Online sellers shipping products directly to customers are also considered shippers.

Freight Forwarders: These intermediaries coordinate shipments on behalf of other businesses.

Third-Party Logistics (3PL) Providers: 3PL providers offer a range of logistics services, including transportation, warehousing, and distribution, on behalf of their clients. They may act as intermediaries between shippers and carriers, coordinating the movement of goods and managing supply chain operations.

The shipper’s role involves preparing goods for transport, arranging carriers, and ensuring proper documentation.

What are the Essential Components of EDI 211?
  • Unique Shipment Identifier (ID number): Unique identifier for the shipment.
  • Contact information: Details of the shipper, carrier, and receiving parties.
  • Ship-to location address: Where the goods are to be delivered.
  • Product descriptions: Depending on the nature of the goods being shipped, product information could include details about quantities, weight, and size.
  • Load information: Details like the number of pallets, total weight, and freight class.
  • Expected delivery date: When the shipment should arrive.
  • Special instructions: Any specific handling requirements.
EDI- Price

Motor Carrier Bill of Lading Transaction Set (EDI 211) Format Example

The EDI 211 represents a Motor Carrier Bill of Lading, which contains essential information about a shipment.

ISA*00*          *00*          *02*CN             *ZZ*GENERIC        *170710*1339*U*00501*006298415*0*P*>~

GS*IM*XYZXYZAN*XYZBORNZ*20200709*1928*111170654*X*004010~

ST*211*2430002~

BOL*SCAC*PP*155000123*20200713*085414~

B2A*00*BL~

MS3*SCAC*B*CARLSTADT~

L11*127.16*XY*Bill Total~

L11*AMAZ*ZZ~

L11*155000123*CN~

L11*ECA5910167*BM~

L11*R2098-872304797*PO~

G62*35*20200713~

G62*54*20200713~

G62*86*20200711*8*1923~

AT5***RESIDENTIAL DELIVERY~

K1*ABF Measured Cube: 25.0000 CUF~

K1*// DO NOT REMOVE FROM PALLET O*BREAK SHRINK WRAP // ALL~

K1*LIFTGATE DELIVERIES ARE*PREAPPROVED~

N1*SH*AMAZON THRESHOLD~

N3*2001 HARRISBURG PIKE~

N4*CARLISLE*PA*17015*US~

N1*CN*SUSAN PARKS~

N3*361 S COLLINGWOOD AVE~

N4*SYRACUSE*NY*13206*US~

G61*RE*Consignee Phone*TE*555-555-5555~

AT1*1~

AT4*OF 2 PC BATH TUBS NOI NMFC 158260-4 CL 150 STL SKS~

AT4*NMFC 158290-5 CL 150 FRPLCS ITEM 158290-00V~

AT2*1*PLT*B*L*170~

SE*28*2430002~

GE*1*111170654~

IEA*1*006298415~

Keep in mind that EDI 211 may include additional segments and data specific to the shipment.

Dive into the world of EDI (Electronic Data Interchange) with our insightful video explanation. Explore the video

What is the Difference Between EDI 211 and EDI 214?

EDI 211 and EDI 214 transaction sets both serve different purposes in the context of electronic data interchange (EDI) for transportation and logistics:

EDI X12 (211) – Motor Carrier Bill of Lading:

Purpose: EDI 211 serves as a legal bill of lading for a shipment.

Sender: Shippers or other parties responsible for contracting with a motor carrier use the EDI 211.

Content:
  • Provides details about the shipment, including product descriptions, quantities, and delivery instructions.
  • Not used for load tender, pick-up manifest, or appointment scheduling.

Significance: Ensures accurate documentation for the shipment.

EDI X12 (214) – Transportation Carrier Shipment Status Message:

Purpose: EDI 214 provides status updates for shipments.

Sender: Transportation carriers (e.g., trucking companies) use the EDI 214.

Content:
  • Conveys information about dates, times, locations, route, and identifying numbers.
  • Accommodates multiple stops for less-than-truckload (LTL) shipments.

Significance: Allows shippers, consignees, and agents to track shipment progress.

In summary, while the EDI 211 focuses on providing a legal bill of lading, the EDI 214 focuses on conveying real-time shipment status information. Both play essential roles in efficient logistics and supply chain management.

Benefits of Using EDI 211

The exchange of EDI 211 Motor Carrier Bill of Lading streamlines the communication process between the shipper and the carrier, allowing for faster and more accurate transmission of shipment information. This helps both parties to efficiently manage the transportation of goods and ensures that all necessary documentation is in place for the shipment.

The Best EDI Provider to Integrate EDI 211

As part of our commitment to streamlining business processes, our company offers EDI Managed Services. As a fully managed EDI solution, we handle all aspects of Electronic Data Interchange (EDI) for businesses across various industries.

From initial project planning to designing custom file formats (such as XML, TXT, or CSV), our expert team ensures seamless communication with trading partners.

With no on-site installations required, our customers receive timely and budget-friendly EDI projects.

Seeking a cost-effective solution for your EDI needs? Look no further than our EDI web service. Whether you’re a small business or a large enterprise, our EDI Web Service is designed to meet your requirements without breaking the bank.

USEFUL: Choosing the Right EDI Solution: A Comprehensive Comparison

Interested in learning more about our comprehensive range of EDI solutions? Book a free consultation with one of our seasoned EDI experts today. Simply choose a convenient time for you, and our team will provide you with expert guidance tailored to your specific needs.

With over 24 years of experience in the EDI market, we are confident in our ability to deliver the best solution for your business.

Let us help you optimize your logistics processes and drive efficiency with our EDI services.
EDI for transportation free consultation
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How to Improve Collaboration in the Retail Supply Chain with EDI 852 Document

In the business world, especially in the retail industry, an EDI 852 transaction set plays a crucial role in transmitting product activity data between trading partners. In this article, we will explore the details of X12 EDI 852 document, providing you with a comprehensive understanding of its definition, document structure, data elements, and more.

What is EDI 852 Document?

The EDI 852 document, also known as Product Activity Data, is an electronic transaction set used in supply chain management and retail operations for exchanging product-related information between trading partners.

It contains detailed data on the activity of products, such as sales, inventory levels, pricing, and promotions. The EDI 852 document provides valuable insights into product performance and helps in the decision-making process.

Understanding the EDI 852 Document

The EDI 852 document follows the X12 standard format and consists of various segments and data elements that convey specific information. Each segment within the document serves a distinct purpose, such as identifying the product, sales quantities, pricing, and dates.

Typically, retailers provide their suppliers with EDI 852 every week. When automating the EDI 852, the problem is that each retailer may use slightly different formats, data descriptions, and code identifiers.

That is why it is essential to adhere to the EDI 852 specification so that trading partners can ensure uninterrupted data exchange.

What are the Key Components of EDI 852 Document?

The EDI 852 transaction set comprises essential data elements that provide valuable insights into product activity.

The essential components of an EDI 852 document include:

Header: Contains general information about the document, such as sender, receiver, document number, and date.

Line Items: Each line item represents a specific product and includes details like UPC/EAN codes, quantity sold/available, unit prices, dates of sales and promotions, store locations, and much more.

Summary: Provides aggregate information, such as total sales, units shipped, and average prices, at the end of the document.

These elements collectively form a comprehensive dataset that enables accurate analysis and decision-making.

How is an EDI 852 Product Activity Used?

The EDI 852 document serves multiple purposes, including:

Sales Analysis: Retailers can analyze sales patterns by geographical location, identify top-selling products, and measure the effectiveness of promotions.

Inventory Management: Suppliers can track product availability, monitor stock levels, and plan replenishments efficiently.

Demand Forecasting: By analyzing historical sales data, businesses can make accurate forecasts and adjust production and inventory strategies accordingly.

Pricing and Promotions: The EDI 852 document helps assess the impact of pricing changes and promotional activities on product performance.

Thus, by leveraging the rich insights derived from EDI 852, organizations can make data-driven decisions and adapt their strategies to achieve business growth.

How is an EDI X12 852 – Product Activity Data Processed?

The EDI X12 852 business flow between trading partners, such as a retailer and a supplier typically follows a standardized process. Here is a general overview of the EDI 852 business flow:

Purchase Order: The retailer generates a purchase order (EDI 850) to communicate their product requirements and submit it to the supplier.

Purchase Order Acknowledgment: The supplier receives the purchase order and responds with an EDI 855 Purchase Order Acknowledgment. This document confirms the receipt and acceptance of the purchase order.

Shipment: When the supplier ships the products, they generate an EDI 856 Advance Ship Notice (ASN) to notify the buyer of the coming shipment. The ASN contains information about the products, packaging, quantities, and carrier details.

Receipt of Goods: The retailer receives the shipment and records the receipt of goods in their internal systems like ERP or CRM.

Invoice Generation: After the retailer receives the shipment and records the receipt of goods, the supplier generates the Invoice (EDI 810) document. The invoice contains the billing details, including itemized charges, payment terms, etc.

Sales and Product Activity: The retailer captures sales and product activity data within their systems. This data includes information such as quantities sold, pricing, promotions, and inventory levels.

EDI 852 Generation: Based on the captured sales and product activity data, the retailer generates the EDI 852 document (Product Activity Data) and sends it to the supplier.

EDI 852 Transmission: Most often, a retailer will transmit an EDI 852 document to a supplier using the services of an EDI provider, such as a fully managed EDI service or an EDI web service.

Supplier Processing: Upon receiving the EDI 852, the supplier verifies, and processes the data. They utilize this information for various purposes, such as sales analysis, inventory management, and demand forecasting.

The retailer and the supplier can integrate the EDI 852 data into their respective internal systems, such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), or inventory management systems. This integration ensures seamless data flow, eliminates manual data entry, and enables real-time visibility into product activity.

It’s important to note that the generation of the EDI 852 document typically falls within the retailer’s responsibility. As they capture and analyze the sales and product activity data, they generate the EDI 852 to share that information with the supplier. The supplier then processes this data and utilizes it for their own business purposes.

Which Industries Typically use the EDI 852 Document?

The EDI 852 document is widely utilized in industries such as retail, consumer goods, manufacturing, and distribution. Retailers and suppliers, including e-commerce platforms, department stores, and wholesalers, rely on the EDI 852 to streamline their supply chain processes and optimize inventory management.

What is EDI 852 Message Format and Specification?

The EDI 852 message follows a specific format and specification based on the ANSI X12 standard.

The EDI 852 specification defines the structure, data elements, and guidelines for implementing the document. It outlines the mandatory and optional segments, their formats, and the specific usage requirements. The specification provides a common language for trading partners to exchange product activity data accurately.

The EDI transaction set contains various segments that organize the data into specific categories. Each segment serves a specific purpose and carries relevant data related to product activity.

Here are the key segments typically found in an EDI 852 transaction:
  • ST Transaction Set Header
  • XQ Reporting Data/Action
  • XPO Preassigned Purchase Order Numbers
  • N9 Reference Identification
  • PER Administrative Communications Contact
  • N1 Name
  • N2 Additional Name Information
  • N3 Address Information
  • N4 Geographic Location
  • FOB F.O.B. Related Instructions
  • TD5 Carrier Details (Routing Sequence/Transit Time)
  • DTM Date/Time Reference
  • LIN Item Identification
  • CTP Pricing Information
  • SAC Service, Promotion, Allowance, or Charge Information
  • PO4 Item Physical Details
  • AMT Monetary Amount
  • PAL Pallet Information
  • ZA Product Activity Reporting
  • QTY Quantity
  • CTP Pricing Information
  • SDQ Destination Quantity
  • G95 Performance Requirements
  • CTT Transaction Totals
  • SE Transaction Set Trailer

These are some of the common segments found in an EDI 852 transaction set. The specific segments and their usage may vary depending on the implementation and business requirements of the trading partners.

What is the Difference Between EDI 852 and EDI 867?

While both EDI 852 and EDI 867 documents are used for product activity data, they serve different purposes. The EDI 852 focuses on providing detailed information on sales, inventory, and pricing, while the EDI 867 – Product Transfer and Resale Report, is used for transmitting information related to inventory transfers and adjustments between locations or trading partners.

Thus, EDI 867 provides broader visibility into inter-store transfers and resale activities.

By combining the data from both transaction sets, organizations can gain a holistic view of their supply chain, optimize inventory management, and enhance demand planning.

What are the Benefits of EDI 852?

Implementing the EDI 852 document offers several advantages:

Enhanced Data Accuracy. Manual data entry errors are minimized, ensuring reliable and error-free information exchange.

Improved Efficiency. Automation of product-related processes saves time, reduces costs, and enables faster decision-making.

Better Inventory Management. Real-time visibility into product activity helps optimize stock levels, minimize out-of-stock situations, and avoid excess inventory.

Streamlined Collaboration. EDI 852 facilitates seamless communication and collaboration between retailers and suppliers, improving overall supply chain performance.

Thus, implementing EDI 852 streamlines the exchange of product-related information, reduces manual data entry, improves data accuracy, and enhances collaboration between suppliers and retailers.

What Other EDI Transaction Sets Related to EDI 852?

In addition to the EDI 852 transaction set, there are several other EDI documents commonly used in conjunction with or related to EDI 852. Let’s explore some of these transaction sets:
  • EDI 846 – Inventory Inquiry/Advice, is used to exchange inventory-related information between trading partners.
  • EDI 832 – Price/Sales Catalog, facilitates the exchange of pricing and product catalog information between trading partners.
  • EDI 810 – Invoice, is used for transmitting invoice information from suppliers to retailers.
  • EDI 850 – Purchase Order, is used to demand of delivery of goods and/or services.
  • EDI 855 – Purchase Order Acknowledgment, is used to confirm the receipt and acceptance of purchase orders.
  • EDI 867 – Product Transfer and Resale Report.

These are just a few examples of transaction sets related to EDI 852. Depending on specific business requirements and industry practices, there may be other transaction sets that are relevant and commonly used in conjunction with EDI 852 for seamless data interchange and comprehensive supply chain management.

Conclusion: EDI 852 Document for Supply Chain Management

EDI 852 Product Activity Data plays a key role in efficient supply chain management and collaboration between suppliers and retailers. Using EDI 852, organizations can simplify the exchange of product information, improve inventory management, and streamline decision-making. If you have any questions about EDI 852 or EDI in general, please contact our experts for a free consultation.
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The Importance of EDI 862 Shipping Schedule in Streamlining Supply Chain Management

Introduction: What is EDI X12 862 Shipping Schedule?

In today’s digital world, efficient communication and streamlined processes are paramount for successful supply chain management. One of the key tools that facilitate this seamless exchange of information is Electronic Data Interchange (EDI).

Among the various EDI transaction sets, the EDI 862 transaction, also known as the Shipping Schedule, plays a crucial role in coordinating shipments and ensuring timely delivery.

The Shipping Schedule (EDI 862) provides essential data related to the delivery of goods, allowing suppliers and customers to efficiently plan and manage their inventory and logistics operations.

Let’s explore the definition, structure, standards, processing, and benefits of the EDI 862 Shipping Schedule.

EDI 862 Shipping Schedule – Definition

The EDI 862 Shipping Schedule is a standardized electronic document sent from a supplier to a buyer; it contains specific details regarding the shipping requirements for a particular order or set of orders. It typically includes information such as:
  • shipment dates,
  • quantities,
  • packaging instructions,
  • carrier details, and other relevant logistics data.

EDI X12 862 (EDIFACT DELJIT) – Structure & Standards

The structure of an EDI 862 document follows the ANSI ASC X12 standard. In the UN/EDIFACT standards, the DELJIT (Delivery Just-In-Time) message performs a similar function. It consists of data segments, elements, and sub-elements arranged in a hierarchical format.

The structure defines the order and format in which the information is transmitted, ensuring compatibility and interoperability between different systems.

ANSI ASC X12 standard is prevalent in North America, while UN/EDIFACT is widely adopted globally.

These standards provide a common language for data exchange, ensuring consistency and compatibility between trading partners.

EDI 862 Shipping Schedule – Processing

The processing of the EDI 862 Shipping Schedule involves the exchange of structured electronic data between the sender and the receiver. Here’s a general overview of the processing steps:

Data Preparation: The shipping schedule data is collected and formatted according to the specific EDI standard, such as ANSI ASC X12 or UN/EDIFACT.

Translation: Data is translated into the appropriate EDI format, usually companies use the services of an EDI Provider. This can be either a Fully Managed EDI Service or an EDI Web Service.

This step ensures that the information is correctly encoded and compliant with the selected standard.

Learn more about how to choose the right EDI solution for you in this article: Business Automation: How to Choose the Right EDI Solution

Transmission: The translated EDI document is transmitted securely by the EDI Provider to the trading partner using a communication protocol such as AS2, FTP, or VAN (Value Added Network).

Receipt and Validation: The recipient’s system receives the EDI 862 document and performs validation checks to ensure the data integrity and compliance with the standard.

Processing and Integration: The received shipping schedule information is processed and integrated into the recipient’s internal systems, such as enterprise resource planning (ERP) or warehouse management systems (WMS).

Acknowledgment: A functional acknowledgment (e.g., EDI 997) is generated and sent back to the sender to confirm the successful receipt and processing of the EDI 862 document.

Sample EDI 862 Data for the Shipping Schedule Transaction Set

The EDI 862 document represents a Shipping Schedule, which provides information about scheduled shipments.

ISA*00*          *00*          *12*Sender         *ZZ*Receiver       *210429*0402*U*00401*000000003*0*P*>

GS*SS*Sender*Receiver*20210429*04024783*1*X*004010

ST*862*0001

BSS*00*2019-12-17 13:15:19*20191217*DL*20210429*20210429****P302289

N1*BT*JOHN BLUEINDUSTRIES INC.*92*59940

N3*ATTN: ACCOUNTS PAYABLE DEPARTMENT*PO BOX 47200

N4*HAMEL*MN*55340*US

N1*ST*JOHN BLUEINDUSTRIES INC.*92*WXY5L559

N3*ATTN: RECEIVING*989 Q AVE.

N4*MILFORD*IA*12345*US

N1*SU**92*744551A

LIN*1*BP*MISC

UIT*EA

REF*RE*0**YN>5>ZY>PSS001

PER*EX*Company’s Help Team*EM*email@lcopany.com*TE*1-800-123-123

FST*2*C*D*20210429****RE*0

DTM*017*20200108*0500*CS

DTM*150**1600*CS

DTM*151**1700*CS

DTM*118*20210429

DTM*011*20200107

SHP*38*2*112*20210429

TD3***SHIP DIRECT******1783662

TD5**US*734870*P*17836671780792**59*766736

SE*23*0001

GE*1*1

IEA*1*000000003

Let’s break down the segments and elements within the provided EDI 862 file:

ISA: Interchange Control Header segment. It contains information about the sender and receiver of the interchange, along with control information such as the date and version of the EDI standards used.

GS: Functional Group Header segment. It provides information about the sender and receiver. The segment also includes a group control number and the version of the EDI standards used.

ST: Transaction Set Header segment. It indicates the start of a specific transaction set, in this case, the Shipping Schedule (862).

BSS: Beginning Segment for Shipment Schedule. It contains general information about the shipment, such as the scheduled shipment date, the delivery date, and other relevant details.

N1: Name segment. It provides information about the entities involved in the transaction.

LIN: Item Identification segment. It identifies a specific line item or product being shipped, including details like the item number and item type.

UIT: Unit Detail segment. It provides information about the unit of measure for the item being shipped.

REF: Reference Identification segment. It includes additional references related to the shipment.

PER: Administrative Communications Contact segment. It specifies the contact person or department responsible for communication-related to the transaction, including their name, email, and phone number.

FST: Forecast Schedule segment. It contains forecast information related to the shipment.

DTM: Date/Time Reference segment. It provides date and time information associated with the shipment, such as order dates, delivery dates, and ship dates.

SHP: Shipped/Received Information segment. It includes details about the shipment, such as the number of units shipped, the packaging code, and the shipment date.

TD3: Carrier Details (Equipment) segment. It provides information about the transportation equipment used for the shipment, including any special handling requirements.

TD5: Carrier Details (Routing Sequence/Transit Time) segment. It specifies details about the carrier, such as the carrier code, routing information, and transit time.

SE: Transaction Set Trailer segment. It marks the end of the transaction set (Shipping Schedule in this case) and includes a control number and the number of segments in the set.

GE: Functional Group Trailer segment. It marks the end of the functional group and includes a control number and the number of transaction sets within the group.

IEA: Interchange Control Trailer segment. It marks the end of the interchange and includes a control number and the number of functional groups within the interchange.

Each segment is composed of elements separated by asterisks (*). The elements

What is the Difference Between EDI 830 and EDI 862? (EDI 862 vs EDI 830)

The EDI 830 and EDI 862 are both important EDI documents used in supply chain management, but they serve different purposes and convey different types of information. Here’s a breakdown of the differences between the two:

EDI 830 – Planning Schedule with Release Capability

The EDI 830, also known as the Planning Schedule with Release Capability, is used by the customer (buyer) to communicate their long-term production to the supplier. It provides a forecast of the customer’s anticipated demand for goods over a specific period, typically weeks or months in advance. The EDI 830 includes information such as item quantities, delivery schedules, and any changes or updates to the forecasted demand.

The main purpose of the EDI 830 is to help suppliers plan their production schedules, capacity requirements, and raw material procurement based on the anticipated demand from the customer. It allows suppliers to align their resources and inventory levels to meet the customer’s needs efficiently.

EDI 862 – Shipping Schedule Transactions

On the other hand, the EDI 862, also known as the Shipping Schedule, is used to communicate detailed shipping information to the supplier. It provides specific instructions regarding the shipment of goods. Thus, the purpose of the EDI 862 Shipping Schedule is to convey specific shipping instructions (delivery date, carrier info, destination facility…). It’s important to note that the 862 does not replace the 830; rather, it complements it.

The primary purpose of EDI 862 is to inform the supplier about the planned shipping activities and enable the customer to efficiently plan their inventory and logistics operations. It helps the customer prepare for the receipt of goods, allocate warehouse space, and coordinate their internal processes accordingly.

In summary, the key differences between the EDI 830 and EDI 862 are:

Content: The EDI 830 focuses on providing forecasted demand and long-term production requirements, while the EDI 862 provides detailed shipping information and instructions.

It is important to note that the specific roles and responsibilities for sending and receiving EDI 862 can vary depending on the business relationship and agreement between trading partners. It is ultimately determined by the specific arrangement and practices between the buyer and supplier.

Planning vs. Execution: The EDI 830 is more related to production planning and demand forecasting, whereas the EDI 862 is more focused on the execution and coordination of shipments and deliveries.

Both documents play crucial roles in supply chain management, helping trading partners effectively plan, communicate, and coordinate their production and logistics activities.

EDI 862 Shipping Schedule Benefits

The EDI 862 Shipping Schedule offers several benefits to trading partners in the supply chain:

Improved Efficiency

By automating the exchange of shipping information, the EDI 862 reduces manual data entry and paperwork, resulting in faster and more accurate processing of shipping schedules.

Enhanced Visibility

The shipping schedule provides real-time visibility into upcoming deliveries, enabling better planning and coordination of resources.

Reduced Errors

With standardized data formats and automated validation, the EDI 862 helps eliminate errors and discrepancies that can occur during manual data entry or paper-based processes.

Streamlined Logistics

The timely and accurate transmission of shipping information allows suppliers and customers to optimize their logistics operations, reducing lead times and improving order fulfillment.

Inventory Optimization

By having access to precise shipping schedules, organizations can manage their inventory levels more effectively, minimizing stockouts and excess inventory.

Stronger Trading Partner Relationships

EDI 862 promotes collaboration and trust between trading partners by enabling seamless information exchange, leading to improved business relationships.

Overall, the EDI 862 Shipping Schedule plays a vital role in supply chain management by facilitating efficient communication of shipping requirements, reducing errors, and enhancing operational effectiveness for businesses involved in the movement of goods.

Automate 862 Shipping Schedule with EDI Services from EDI2XML

We have been offering EDI services for more than 22 years, making us highly experienced in implementing EDI projects. Our services cover a wide range of options, including fully managed EDI, EDI web service, and EDI on-premises solutions.

Whether you need comprehensive support or specific EDI services, we have the expertise to meet your requirements.

Contact us today for a free initial consultation to discuss how our EDI solutions can streamline your operations.

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All You Need to Know about EDI for Suppliers

Suppliers can offer a retailer a broad selection of products that can range from 10 to 300 or more different items. Considering that a large retailer (as well as a supplier) can have dozens or even hundreds of different trading partners. Exchanging such a volume of information by fax or e-mail, and manually entering an order, invoice, and other related information into the ERP system becomes completely inefficient.

The need to transfer and enter data manually has been eliminated by EDI technology. EDI saves staff time and greatly improves supply chain management.

NOTE: EDI is the exchange of electronically structured messages in accordance with agreed standards (X12, EDIFACT) between the information systems of trading partners. The message refers to the business documentation which was traditionally exchanged in paper form. Invoice, Purchase Order, Inventory Inquiry/Advice, and so on.

What is a Supplier in Business?

A supplier is a company (manufacturer, vendor, wholesaler, distributor) that provides goods and services to another organization. The supplier is part of the supply chain. Recently, more and more common suppliers are engaged in dropshipping, that is, they deliver goods directly to the buyer’s customers.
EDI for Supplier

Benefits of EDI for Trading Partner

EDI integration has many benefits for both the supplier and the buyer and allows you to automate operations related to external data.

Through the use of EDI, companies can:

– ensure the security of commercial data transmission;

– guarantee fast and timely transfer of information;

– increase productivity through fast transmission and processing of information;

– minimize errors that occur during manual data entry, which often lead to additional costs;

– reduce operational costs;

– significantly increase the trade turnover between business partners, increase the profitability and competitiveness of the company in the market.

EDI Order Processing

EDI serves as a “link” between suppliers and buyers. In the retail industry, the retailer defines the format (X12/EDIFACT) and the list of required EDI documents and sets strict rules for exchanging EDI documents with all of its suppliers. Supplier companies that want to work with retailers are required to follow the established rules.

The scheme of EDI interaction on the example of the EDI order processing between a retailer (buyer) and a product supplier is shown in the figure below.

The buyer creates an order for the goods, which is converted into an electronic data interchange (EDI) format (i.e. X12, EDIFACT), encoded, and sent in encrypted format over an FTP, sFTP, AS2, API, or VPN to the supplier.

At the supplier side, this EDI transaction set is decoded and converted into the supplier application format (XML, CSV, TXT, JSON) and the incoming EDI message could be integrated into the ERP/CRM system of the supplier.
EDI order process

The simplest and most common business process looks like this:

– Buyer: prepare and send the order (EDI X12 850) to the supplier.

– Supplier: sends to the buyer a Purchase Order Acknowledgment (EDI X12 855) to confirm the supplier’s intention to fulfill the order.

– Supplier: Once the products are shipped, the supplier sends an Advanced Ship Notice (EDI X12 856) to the buyer.

– Supplier: send the buyer an invoice (EDI X12 810) to get paid.

The Most Used EDI Documents by Suppliers

Below is a list of the most used EDI documents between a supplier and a buyer.

Documents in X12 Standard (Common in North America)
  • EDI 810 – Invoice
  • EDI 812 – Credit/Debit Adjustment
  • EDI 832 – Price/Sales Catalog
  • EDI 846 – Inventory Inquiry/Advice
  • EDI 850 – Purchase Order
  • EDI 855 – Purchase Order Acknowledgment
  • EDI 856 – Advanced Ship Notice (ASN) /Manifest

Documents in the EDIFACT Standard Used in Europe
  • ORDERS Purchase order (order for delivery of goods or services
  • ORDRSP Purchase Order Response (order confirmation
  • DESADV Despatch advice (notice of shipment)
  • RECADV Receiving advice (delivery notice)
  • INVOIC Invoice
  • PRICAT Price/sales catalog message (product catalog
  • PROINQ Product inquiry (price list request)
  • COACSU Commercial account summary (the act of review of mutual accounts

In addition to those listed above, trading partners can exchange other types of documents that depend on the industry in which the company operates and its business processes.

You can find the full list of EDI documents with their codes at the links below:

EDI 810 Invoice Example

The following example of EDI Transaction Set details X12 810 invoice.

ISA*00*          *00*          *12*5141231234     *12*5034564567     

*181122*1220*U*00501*000000001*0*T*> GS*IN*5141231234*504564567*20181122*122047*1*X*005010

ST*810*0001

BIG*20181122*I-0042537

N1*RI**92*10055500

N1*ST**92*00262

ITD*05*1*****100

DTM*011*20190120

IT1**2*EA*5.45**UP*888077648572

SDQ*EA*92*00682*1*70674*1

IT1**2*EA*5.45**UP*888077650123

SDQ*EA*92*00111*1*11356*1

IT1**3*EA*4.85**UP*888077648954

SDQ*EA*92*00682*1*11356*1*70674*1

IT1**3*EA*5.15**UP*888077649105

SDQ*EA*92*00011*2*00111*1

IT1**1*EA*5.9**UP*888077648867

SDQ*EA*92*00682*1

TDS*5770

CAD*A***FDEG

CTT*5

SE*20*0001

GE*1*1

IEA*1*000000001

Benefits of Using Fully Managed EDI Services for Suppliers

The use of EDI by businesses, in particular by suppliers has many benefits. However, it should be noted that there are many EDI service providers, and they all provide different services at different prices. Therefore, the benefits of using EDI may differ.

We, as  EDI service provider with more than 21 years of experience, offer suppliers to take advantage of our Fully Managed EDI Service, which can bring the following business benefits:
  • Increase productivity and performance of administrative and sales departments.
  • No manual data entry and no lost documents.
  • Reducing administrative costs.
  • Improve the quality of incoming and outgoing business data.
  • Flexible and adaptive pricing plan. Depending on the amount of transmitted information, EDI prices can both increase and decrease monthly. (Request Fully Managed EDI Service Pricing Plans)
  • The ease of use of our EDI service – you don’t need any IT or EDI skills.
  • Support from our EDI and business experts.

USEFUL: If you want to know how to change your EDI provider (or choose a new one), read this article.

EDI Solution for Suppliers

We offer affordable EDI solutions for suppliers.

Web EDI

Fully Managed EDI

On-Premises EDI

These proven EDI solutions improve the efficiency of our customers by making it easy to manage transactions, shipments and improve efficiency across the entire supply chain.

To get more out of EDI, we can integrate your EDI with any ERP, CRM, accounting application, shipping service, eCommerce solution, WMS, and more.

Contact us for an initial free consultation.
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EDI for Specific Industries

EDI – Electronic Data Interchange is a well-established protocol of business data exchange, which has become more and more widespread in recent years among businesses of all sizes and various industries.

Through EDI, companies can exchange business documents that were traditionally communicated on paper or by e-mail.

By replacing the exchange of paper or e-mail documents with EDI, companies save time and eliminate manual data processing, which often leads to errors and costly delays in all business processes.

Companies today use EDI to send all kinds of documents, from orders, and invoices to motor carrier load tender, customs manifest, and more.

The exchange of EDI takes place between business partners who exchange goods or services.

All EDI transactions comply with standards developed and maintained by several organizations including UN/CEFACT, X12, ODETTE, GS1, Peppol, and others.

However, despite uniform standards, each industry can use a certain set of specific EDI transactions. Below we provide some examples of EDI documents for specific industries.

USEFUL: A complete list of documents that can be exchanged via EDI

EDI for Transportation and Logistics Industries

The Transportation industry actively uses EDI and, in addition to standard transactions, this industry use sets of specific EDI documents.

The transport industry includes a huge variety of different types of transportation. It includes marine, air, rail, and motor freight. Accordingly, the EDI transactions used for example in rail transportation will differ from those used by motor freight.

The Most Used EDI Transactions for Transportation and Logistics

USEFUL: You can find a complete list of EDI transportation codes in our article “EDI Integration for Transportation and Logistics”

EDI for the Supply Chain Industry

The supply chain industry includes many processes such as distribution, inventory, purchasing, production planning, sales, supply chain planning, interaction with trading partners and warehouses.

The use of EDI in the supply chain allows the company to quickly exchange documents electronically with all suppliers, exchange prices and catalogs, track information on shipments and acceptance of goods. EDI allows to make the supply chain as transparent and efficient as possible, receiving up-to-date data on the movement of goods and funds in real-time.

EDI Transactions for Supply Chain

Here are some of the most common EDI documents in the supply chain:

  • EDI 810 – Invoice
  • EDI 846 – Inventory Status
  • EDI 850 – Purchase Order
  • EDI 856 – Ship Notice/Manifest
  • EDI 855 – Purchase Order Acknowledgment
  • EDI 820 – Payment Order/Remittance Advice
  • EDI 753 – Request For Routing Instructions
  • EDI 754 – Routing Instructions
  • EDI 816 – Organizational Relationships
  • EDI 830 – Planning Schedule With Release Capability

To learn more about the use of EDI in the supply chain, read our article: Electronic Data Interchange (EDI) in the Supply Chain

It covers the following questions:

– What is EDI?

– Why use EDI in the supply chain?

– How does EDI work?

– Typical EDI workflow process

– Additional and specific types of EDI messages

– Benefits of EDI for Supply Chain Management

– Effective EDI Solution for Supply Chain

USEFUL: EDI for Third-Party Logistics providers (3PL)

EDI for HealthCare and Insurance Industries

EDI is of great value to healthcare organizations because it provides a secure way to electronically exchange sensitive information.

The healthcare industry includes health insurance activities, which are carried out by both commercial and public health organizations.

Most common EDI Transaction Sets in HealthCare

  • HIPAA / X12 270 – Eligibility, Coverage, or Benefit Inquiry
  • HIPAA / X12 271 – Eligibility, Coverage, or Benefit Response
  • HIPAA / X12 276 – Healthcare Claim Status Request
  • HIPAA / X12 277 – Health Care Claim Status Response
  • HIPAA / X12 837 – Health Care Claim (Professional, Institutional, and Dental)
  • HIPAA / X12 999 – Implementation Acknowledgment
  • EDI 273 – Insurance/Annuity Application Status
  • EDI 274 – Healthcare Provider Information
  • EDI 275 – Patient Information
  • EDI 834 – Benefit Enrollment And Maintenance
  • EDI 835 – Health Care Claim Payment/Advice
  • EDI 852 – Product Activity Data (to exchange information between Manufacturers and Pharmacies)
  • EDI 999 – Implementation Acknowledgment (for Health Care Insurance)

To learn more about EDI in healthcare, please read this article: All you need to know about HIPAA EDI compliance in Healthcare

EDI for the Retail Industry

The Retail Industry is a pioneer in the implementation of EDI. Large retailers are actively automating business processes and introducing new information technology solutions to reduce costs and increase sales.

Thus, the use of EDI in retail is a must. Since large retail companies have a huge number of suppliers, they have to exchange thousands of documents every month. It is simply impossible to go through so much documentation manually.

The Most Used EDI Documents in the Retail

  • EDI 810 – Invoice
  • EDI 820 – Payment Order/Remittance Advice
  • EDI 832 – Price/Sales Catalog
  • EDI 846 – Inventory Inquiry/ Advice
  • EDI 850 – Purchase Order
  • EDI 852 – Product Activity Data
  • EDI 855 – Purchase Order Acknowledgment
  • EDI 856 – Ship Notice/Manifest
  • EDI 861 – Receiving Advice/Acceptance Certificate

The use of EDI in retail offers many benefits, ranging from savings in paperwork and avoiding manual data entry errors, to reducing transport and logistics costs and increasing company profits.

If you want to learn more about the use of EDI in retail, please read this article: The Top 6 EDI Documents for Retail Suppliers

Conclusion: EDI for Specific Industries

In this article, we explored the use of electronic data interchange in some industries, however, if you have any questions regarding EDI, you can always contact us for a free initial consultation.

Our more than 21 years of experience in the implementation of EDI for various industries allows us to offer our customers the most profitable and effective EDI solutions.

Free EDI Consultation
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All You Need to Know About EDI 210 – Motor Carrier Freight Details and Invoice

What is an EDI 210 Transaction Set?

EDI Transaction Set X12 210 Motor Carrier Freight Details and Invoice is an EDI document used in logistics by motor carrier companies. EDI 210 is usually sent by the carrier to the shipper (it could be a 3PL warehouse, distributor center, manufacturer, etc.) in order to provide detailed information about the fees for transportation services.

210 EDI Document Type

The formal name of this X12 transaction set is X12 210 Motor Carrier Freight Details and Invoice. 

EDI 210 transaction set, is maintained by a subcommittee “X12I – Transportation” operating within X12’s Accredited Standards Committee.

How is EDI 210 – Motor Carrier Freight Details and Invoice Used?

EDI for transportation

EDI 210 can be used by motor carriers in one of the following two scenarios:

1. as an invoice to request payment, or

2. to provide information about the cost of motor freight transportation.

Typically, the carrier sends the EDI 210 transaction, after the shipment has been delivered to the destination. The EDI 210 document, will indicate the full amount required for a shipment, as well as the terms of payment. The shipper can use the EDI 997 (functional acknowledgment) transaction, to confirm receipt of an EDI 210 transaction.

Benefits of Using EDI 210

Exchange of business documents via EDI is much more efficient and secure than using paper documents or emails. Electronic data interchange helps business partners to improve communication and optimize processes. By exchanging EDI business documents, companies have the following benefits:

– Eliminate the costs associated with the use of paper documents.

– Minimize the labor cost performing daily redundant data entry operations.

– Save time and increase of employee’s productivity.

– Reduce errors due to manual data entry.

– For motor carrier companies, using EDI 210 can speed up the billing process, allowing them to get paid much faster by their business partners.

– For shippers, EDI 210 provides a clear and accurate view of costs, helping to effectively plan a company’s finances.

What Information Does EDI 210 Contains?

The EDI Motor Carrier Freight Details and Invoice Transaction Set contains motor carrier expense details, billing information, and other information that a standard invoice should contain:

– Number and date of the invoice.

– The name and address of the consignee.

– Name and address of the shipper.

– Detailed information about the cargo:

  • name,
  • quantity,
  •  type of cargo,
  •  weight and size

– Delivery methods and route information.

– The total amounts to be paid.

EDI 210 – Motor Carrier Freight Details and Invoice Structure

ANSI ASC X12 Version 4010 of a 210 Motor Carrier Freight Details and Invoice, can have the following structure:

  • ISA – Interchange Control Header
  • GS – Functional Group Header
  • ST – Transaction Set Header
  • B3 – Beginning Segment for Carriers Invoice
  • C3 – Currency
  • M7 – Seal Numbers
  • S5 – Stop Off Details
  • N9 – Reference Number
  • G62 – Date / Time
  • R3 – Route Information
  • H3 – Special Handling Instructions
  • N1 – Name
  • N3 – Address Information
  • N4 – Geographic Location
  • N7 – Equipment Details
  • LX – Assigned Number
  • POD – Proof of Delivery
  • L5 – Description, Marks, and Numbers
  • L0 – Line Item – Quantity and Weight
  • L1 – Rate and Charges
  • L7 – Tariff Reference
  • K1 – Remarks
  • L3 – Total Weight and Charges
  • SE – Transaction Set Trailer
  • GE – Functional Group Trailer
  • IEA Interchange Control Trailer

EDI 210 and EDI 214

What is the difference between EDI 210 and EDI 214? Both of these documents are actively used by logistics and transportation companies, but they have completely two different purposes.

As stated previously in this post, the EDI 210 document, in most cases acts as an invoice for trucking companies. So often, trucking companies call EDI X12 210 Motor Carrier Freight Details and Invoice simply as EDI 210 Invoice.

EDI 214 is a Transportation Carrier Shipment Status Message used by the carrier to notify the shipper and consignee about the status of their cargo.

For complete information on the EDI 214 transaction set read this article: EDI for transportation – EDI 214 Transportation Carrier Shipment Status Message

Automate Logistics and Business Process with EDI2XML Integration Platform

To fully automate data exchange with their business partners, many companies integrate EDI 210 and other important EDI transactions into their internal business systems. Our EDI2XML integration platform provides secure and efficient EDI integration with most ERP, CRM, business, and accounting applications from leading vendors such as SAP, Oracle JD Edwards, Salesforce, Microsoft Dynamics, etc.

Fully managed EDI Service

Our robust and powerful EDI integration platform support different EDI standard (X12, EDIFACT, RosettaNet, etc.) and various communication protocols (e.g. AS2, VAN, FTP/SFTP, HTTP/HTTPS), thus we can connect business partners anywhere they are in the world, regardless of their industries.

Connecting business partners through EDI for over 21 years, our company has accumulated vast experience to carry out your EDI integration project quickly and efficiently.

Contact us for your first free consultation.

EDI in transportation and 3PL

You may also be interested in reading about:
– Electronic Data Interchange (EDI) in the Supply Chain
– How EDI can speed the receiving of goods in a warehouse
– EDI for Third-Party Logistics providers (3PL)
– DELFOR, DELJIT, DESADV – key EDI messages in supply chain management for manufacturing

Electronic Data Interchange (EDI) in the Supply Chain

This post was updated to reflect current trends and information.


What is EDI?

EDI or Electronic data interchange is a technology for exchanging information in real-time between business partners, based on standard and structured electronic messages.

EDI has particularly gained popularity in logistics and retail. This is a recognized standard in business because this protocol helps accelerate the entire supply chain – from procurement to payment.

With a large volume of transactions, large stocks, and numerous suppliers, retailers have a high return on investment when adopting EDI for business documents exchange.

Complete List of EDI Codes

Why use EDI in the supply chain?

Disadvantages of paper workflow faxing or email:
  • Considerable labor cos for working with orders and shipments.
  • The slowness of the processes.
  • Frequently occurring human errors.
  • Difficulties in relations with large buyers-clients.
  • Delays and disruptions of supplies.
  • Discrepancies between order and delivery.
  • Repeated manual entry of all data into various systems (accounting, CRM, ERP, etc.)

EDI avoids problems by providing complete control over supplies and accelerating the flow of funds.

Thanks to EDI, trading partners can send and receive messages instantly. Each party (retailer, supplier, logistics company) onboarded on EDI once, will immediately get the opportunity to exchange information with their business partners without thinking about the features and capabilities of partner accounting systems, their workflow, or the required document format.

How does EDI work?
EDI for logistics

EDI exchange protocol is based on standards (i.e. X12, EDIFACT…) that govern the formats of messages transmitted between business partners electronically.
The necessary data from one company is extracted, formatted, checked, and sent to the necessary business partners, either directly or via EDI service providers…

During the transfer, the EDI service provider translates and maps the information into the required EDI standard, preserving its content.

The receiving party immediately receives the message in a convenient and understandable format. It can be X12, EDIFACT, Json, XML, etc.

Without an EDI service provider, electronic data exchange is very difficult to manage internally with the company’s workforce. It will take many IT professionals who have experience in EDI, the company will need to deploy a large-scale infrastructure to ensure the smooth operation of the EDI service. In addition, many business partners can have a huge variety of IT systems and formats, so you must be able to adapt to each of partner requirements individually. Such financial, labor, and time costs are irrational. That is why, more companies are outsourcing their Integration especially EDI mapping and integration, to outside service providers, to reduce the burden from their internal staff.

Do you need the right advice on how to choose the right EDI service provider or you are thinking about changing the current EDI provider?

Read this article: How to change your EDI Service Provider

Typical EDI workflow process

Purchase Order – ORDERS (EDI 850 Document)

The buyer company sends the supplier a message with the list of goods that she plans to purchase. PO contains date and time of delivery, address, reference to the contract, prices, quantity of goods, and other necessary information.

Useful reading: All you need to know about EDI ANSI X12 Transaction Set 850 Purchase Order

Purchase Order Response – ORDRSP (EDI 855 Purchase Order Acknowledgement)

The supplier sends the buyer a response to his order, noting his consent to the transaction and indicating how accurately the order can be executed. It may also indicate the change in prices for the product selected by the buyer. The buyer receives advance confirmation of prices and quantity of goods from the supplier, can plan the state of their inventory. The supplier at this time reserves goods in his warehouse for delivery.

Despatch advice – DESADV (EDI 856 Advanced Ship Notice in the X12 standard).

At the same time as shipment, the supplier sends a notice to the buyer. It helps simplify and speed up the process of goods acceptance, as EDI 856 (DESADV) contains detailed information about the cargo. For example, container numbers, the hierarchy of packages indicating their types, barcodes, and contents, as well as the physical characteristics of the goods, etc. The purchasing company can use RFID scanners and the Serial Shipping Container Code (SSCC) when receiving. This helps speed up the receipt and get rid of mistakes.

Receiving advice RECADV (EDI 861 – Receiving Advice/Acceptance Certificate)

When the buyer accepts the goods from the supplier, he sends him a RECADV message on the actually received and delivered goods. Thus, the Receiving advice is a report from the buyer to the shipper to indicate that the order arrived intact at its final destination. Moreover, rapid notification of the supplier allows him to generate invoices quickly.

Additional and specific types of EDI messages

UN/EDIFACT Price/sales catalog message (PRICAT)

PRICAT is also known as EDI 832 Price/Sales Catalog in ANSI X12 standard. Companies use the Price/sales catalog message to transmit commercial information to business partners about products, especially about current prices.

EDIFACT RETANN – Announcement for returns message | EDI 180 – Return Merchandise Authorization and Notification

RETANN or EDI 180 in X12 standard sent by the buyer when returning the goods to the supplier for any reason. The message contains the characteristics of the goods planned for return, as well as the terms and reasons – defective, non-standard, expiration, re-grading, etc.

EDIFACT COACSU Commercial Account Summary

Exchange EDI messages between the accounting departments of the supplier and the buyer, which contain the calculations of companies for a certain period.

EDIFACT INVRPT Inventory Report Message | EDI 846 Inventory Inquiry/Advice

INVRPT or EDI 846 transaction set reports the quantity of goods available. Often used to report on the availability and movement of goods.

Useful reading:
What is UN/EDIFACT INVRPT Inventory report message?

What is EDI 846 document?

How EDI can speed the receiving of goods in a warehouse

Benefits of EDI for Supply Chain Management

EDI has the following advantages:

– Reducing Cost: Automation of processes that were previously performed by employees manually using paper documents and / or email, will certainly reduce costs.

– Improving efficiency and productivity: Processing more business documents in less time.

– Reducing errors: The standardization of EDI ensures that the transmitted data is formed into a standard document before it is transmitted.

– Optimization of tracking and reporting: EDI can be integrated with a variety of business systems (ERP, CRM, Warehouse Management, accounting, etc.) This allows enterprises to improve business processes and provide data collection and analysis.

– Building loyalty with business partners: EDI provides the instant transfer of necessary documents, which makes the delivery of goods faster and more reliable.

Effective EDI Solution for Supply Chain

For over 21 years, EDI2XML has been helping companies solve complex integration issues and providing complete EDI communication between business partners.

Improve your business process and maximize your supply chain performance with our EDI solutions. Contact us for a free consultation.

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