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Unlocking Efficiency: How Small Businesses Benefit from EDI and API Integration

Small businesses, regardless of the industry they operate in, are constantly looking for ways to improve efficiency and remain competitive. This article explores how Electronic Data Interchange (EDI), and Application Programming Interface (API) can transform operations, offering insights into their benefits, key differences, and practical implementation tips.

EDI and API Integration Intro

In today’s fast-paced digital world, small businesses are constantly seeking ways to streamline their operations and boost efficiency.

Two key integration solutions have gained significant popularity in recent years: Electronic Data Interchange (EDI) and Application Programming Interface (API).

By harnessing the power of these technologies, small businesses can unlock a whole new level of operational efficiency and seamlessly integrate their systems for improved workflow.

Let’s start with a refresher on what are these two technologies, and how they differ;

What is EDI ?

EDI (or Electronic Data Interchange) allows for the automated exchange of business documents, such as orders, invoices, and shipping notices, between trading partners. This eliminates the need for manual data entry and reduces errors, saving small businesses valuable time and resources.

EDI is also known as ANSI X12, or Electronic Data interchange; EDI as a protocol, existed for long time, and it has been standardized. For example, X12, is the standard that is most popular in North America, while UN/EDIFACT is the standard managed and maintained by the United Nations, and it is very popular in Europe and outside of North America. There are several EDI standards today, commonly used in different industries, however the most commonly known and used today are X12 and EDIFACT.

Useful reading: What Are the Differences Between ANSI X12 and UN/EDIFACT

What is API ?

API (or Application programming Interface) enables different systems to communicate and share data in real-time enhancing collaboration and eliminating the need for manual data transfers.

API communication between the source and destination application, happens via internet, using https protocol, in a very secured and controlled manner, regardless of the geography and distance between sender and receiver of the data.

API, is a protocol to send formatted data from a sender to a receiver application, via a web server that would parse the received data and give it to the the application for processing and integration.

The format of the data exchanged, is structured and mostly based on json or xml, over the REST or SOAP that is also used but in a more moderate frequency.

Useful Reading: SOAP or REST Web Services: what you should use for EDI implementation?

EDI integration: Understanding the Benefits for Small Businesses

In the fast-paced world of modern business, small enterprises are constantly seeking ways to streamline their operations and enhance efficiency. One of the most powerful solutions in this regard is Electronic Data Interchange (EDI).

EDI is a technology that enables the automated exchange of business documents, such as purchase orders, invoices, and shipping notifications, between trading partners.

EDI

By adopting EDI, small businesses can unlock a myriad of benefits that can significantly improve their overall operational efficiency:

  • EDI eliminates the need for manual data entry, reducing the risk of errors and ensuring accuracy in the exchange of critical business information. This, in turn, leads to faster processing times, improved customer service, and enhanced decision-making capabilities.
  • EDI integration allows small businesses to seamlessly integrate their systems with those of their trading partners, fostering stronger, more collaborative relationships. This seamless integration facilitates the real-time exchange of data, enabling small businesses to respond quickly to changing market conditions and customer demands.
  • Additionally, the automation of document exchange through EDI reduces the administrative burden on small business owners, freeing up valuable time and resources that can be redirected towards other strategic initiatives.

API integration: Exploring the advantages for small businesses

Let’s explore the advantage of integration via API; By adopting an integration strategy based on API, a small business can also harness the power of Application Programming Interface (API) integration to streamline their operations and enhance efficiency:

  • An API acts as the digital bridges that enable different software systems to communicate and share data in real-time, eliminating the need for manual data transfers and improving collaboration across the organization.
  • One of the primary advantages of API integration for small businesses is the ability to connect disparate systems and automate data flows. By integrating their various software applications, such as accounting, inventory management, and customer relationship management (CRM) systems, small businesses can create a seamless, interconnected ecosystem that enhances visibility, reduces errors, and improves overall productivity.
  • Furthermore, API integration empowers small businesses to access and leverage a wealth of data from external sources, such as market intelligence, weather forecasts, and social media analytics. This data can be seamlessly integrated into the company’s decision-making processes, enabling small business owners to make more informed, data-driven decisions that drive growth and competitive advantage.

API

Key Differences Between EDI and API Integration

While both EDI and API integration serve to streamline business operations and enhance efficiency, there are some key differences between the two technologies that small businesses should be aware of:

  • The primary distinction lies in the underlying technology and the way data is exchanged. EDI is a more traditional, standardized approach to data exchange, typically involving the transmission of structured, formatted documents between trading partners. This format ensures compatibility and facilitates the automated processing of the exchanged data.
  • In contrast, API integration is a more modern, flexible approach that allows for the real-time exchange of data between different software systems. APIs enable the seamless transfer of data in various formats, including JSON, XML, and even unstructured data, making them more adaptable to the evolving needs of small businesses.
  • Another key difference is the level of integration complexity. EDI typically requires a more robust and specialized infrastructure, including the use of specific communication protocols and software. API integration, on the other hand, is generally more straightforward and can often be implemented using web-based tools and cloud-based services, making it more accessible for small businesses with limited IT resources.

Implementing Integration in a Small Business

Implementing integration based on EDI or API, in a small business can be a transformative process, but it requires careful planning and execution to ensure a successful outcome.

The first step is to conduct a comprehensive assessment of the business’s existing systems, processes, and data flows to identify areas where EDI and API integration can provide the greatest impact.

Once the areas of focus have been identified, small businesses should work closely with their trading partners and software providers to establish the necessary technical infrastructure and protocols. This may involve the deployment of specialized EDI solutions or services, the establishment of secure data exchange channels, and the integration of APIs with the company’s existing software systems.

Throughout the implementation process, it is crucial for small businesses to maintain clear communication with all stakeholders, including employees, customers, and service provides or integrators. This helps to ensure that everyone understands the benefits of the integration and is prepared to adapt to the new processes and workflows.

Book your Free Consultation with Integration expert

Common Challenges to Overcome During the Integration Process

While the benefits of integration for small businesses are numerous, the implementation and ongoing management of these technologies can also present some common challenges that must be addressed;

  • One of the primary challenges is the potential for resistance to change within the organization. Employees may be hesitant to adapt to new processes and technologies, which can slow down the integration process and limit the overall effectiveness of the solutions. To overcome this, small businesses should prioritize change management, providing clear communication, training, and support to ensure a smooth transition.
  • Another challenge is the need for seamless integration with existing systems and trading partner requirements. Small businesses must ensure that their EDI and/or API solutions are compatible with the systems and protocols used by their partners, which can be a complex and time-consuming process. To mitigate this, small businesses should work closely with their technology service providers and trading partners to establish clear standards and protocols, ensuring a streamlined integration process.
  • Additionally, small businesses may face challenges related to data security and compliance. The exchange of sensitive business information through EDI or APIs requires robust security measures to protect against cyber threats and ensure compliance with relevant regulations. To address this, small businesses should invest in comprehensive security protocols, such as encryption, access controls, and regular data backups, as well as staying up-to-date with industry best practices and regulatory requirements.

EDI or API Integration, What is the Best Choice?

Based on my long time experience in systems integration, the choice for EDI or API integration is not up to the business owners as per say. It is the full business context and use case that would “dictate” what integration path should be adopted in a small business, rather than a choice and selection.

As an example, a business won’t be able to decide to go with EDI X12 integration, knowing that his business partner (i.e. his customer) does not support EDI. He might be able to support API but not EDI. That is why such a decision is really based on the capability and the readiness of the different partners to support any of the integration options (EDI or API).

Can We Work with EDI via API?

Lots of times, we receive this question from partners and clients. And the answer is yes. Thanks to the EDI2XML REST API that is able to convert EDI X12, EDIFACT messages to XML via straight and simple xml structured format.

The need arose a few years back where the new generation of developers invested their time and efforts in building expertise around API only, ignoring the fact that EDI even though a legacy protocol, it is still engrained deeply into the major systems of big retailers and corporations, and it is mostly impossible to get rid of it.

This is when we at www.edi2xml.com took the initiative to provide a very intelligent Rest API that would receive and X12 message for example, and turn into xml, and vice versa;

Such an API allowed the end integrators to seamlessly work with EDI via an API interface, knowing that most of the developers in today’s technology space are experts in API development and integration. 

Useful Reading: API Web Service for EDI X12 exchange – Discover the advantages

How to Evaluate Your Integration Project

If you are looking to review your integration strategy or project, and you are not sure what is best for your business, it is recommended to consult with a professional team with lots of years of EDI and API integration.

Our specialists with over 24 years of experience in EDI and API integration will be happy to help 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.

Or click on this image to book your FREE consultation.

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All You Need to Know About Value-Added Network (VAN)

What is a Value-Added Network (VAN)?

A Value-Added Network (VAN) is a third-party service provider that enables companies to exchange business-to-business (B2B) electronic transactions (EDI), such as purchase orders and invoices, with their trading partners.

In simple terms, a VAN acts as a middleman between businesses and ensures that the data exchanged between the parties, is transmitted securely and accurately.

In addition to basic transmission services, VANs may also offer value-added services, such as translation between different data formats, data mapping, and data validation. Moreover, VANs often provide security features, such as encryption and digital signatures, to ensure the confidentiality and integrity of the data being transmitted.

VANs are particularly useful for businesses that have numerous trading partners and need to exchange a large volume of electronic documents. By using a VAN, businesses can reduce the complexity of managing multiple connections to their trading partners, as well as reduce the costs associated with setting up and maintaining their own EDI infrastructure.

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

Explore the video now

The History of VAN

VANs have been around since the early 1970s, when they were first used to connect large corporations with their suppliers and customers. These early VANs were typically owned and operated by telecommunication companies, such as AT&T and MCI.

Over time, the industry evolved to include third-party VAN providers, which offered a wider range of value-added services to businesses. Today, VANs are an essential part of the global supply chain, facilitating the exchange of electronic documents between companies in different industries and countries.

How VANs Work

VANs allow companies to exchange EDI documents and other data electronically.

Here’s a simplified step-by-step breakdown of how a business partner exchanges EDI via a VAN:

Let’s look at a simple example: Two business partners – partner A and partner B – want to exchange EDI messages via a value-added network (VAN).

– Partner A needs to purchase something from Partner B, so he will send a Purchase Order (PO) to Partner B and Partner B will send back an Invoice.

– Partner A has an ISA Qualifier/ID: 12/123456789 and owns a mailbox at VAN Provider “X”, which is their chosen VAN. Within their mailbox, there can be two sub-folders: “in” and “out”.

– Partner B has an ISA Qualifier/ID of 12/987654321 and they own a mailbox at VAN Provider “Y”. Within their mailbox, there are also two sub-folders: “in” and “out”.

– When partner A needs to place an order, he creates an electronic document in X12 format (such as purchase order P/O – EDI 850) that needs to be sent to Partner B.

– Partner A connects to the VAN using a secure login, and uploads the EDI X12 document into their own mailbox at VAN Provider “X”, in the “out” sub-folder. The PO message will contain the ISA segment, which looks like the following:

ISA*00*          *00*          *12*123456789   *12*987654321     *170526*1121*|*00403*100000000*0*P*>~

– The VAN “X” processes the document, checking it for errors and ensuring that it meets the agreed-upon data formatting standards.

– The VAN reads the EDI message envelop (ISA segment above), and finds to whom it is destined to (in this example to *12*987654321). They have a conversion table where they will lookup this address, to find out it is at VAN “Y”. They will connect to VAN “Y” either via a direct connection or through a partner VAN network, then connect to Partner B’s mailbox at the address specified and drop the message in the “in” sub-folder.

– Partner B can then connect to their own mailbox, navigate to the “in” sub-folder, and pick up the P/O to process it.

The same process works in the opposite direction for an incoming message. In this scenario, the envelop looks like:

ISA*00*          *00*          12*987654321    **12*123456789   *170526*1121*|*00403*100000000*0*P*>~

It’s important to note that regardless of how many clients each business Partner has or whether they use different VANs, each partner only needs to connect to their own mailbox to pick up or deliver any EDI message.

The VAN will handle the delivery to the destination mailbox. Interconnectivity between VANs is standard practice, so partners generally do not need to have mailboxes on multiple VANs. Partners should inquire with their VAN to determine if there are any VANs they cannot connect to, but this is a rare occurrence.

The VAN that a partner joins will connect to other VANs where their suppliers are located to deliver/pick up messages.

Throughout this process, the VAN may provide additional services such as message tracking, error handling, and notification of message delivery. These additional services help to ensure that messages are transmitted securely and accurately, and that any issues are resolved quickly.

What Are the Types of Value-Added Networks (VANs)?

Value-Added Networks (VANs) come in different types, with the most common being one-to-one, many-to-many, and one-to-many. Businesses choose the type of VAN that integrates best with their trading partners, data requirements, transaction volumes, and industry.

A one-to-one VAN (Value-Added Network)

A one-to-one VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where two trading partners or businesses use a single VAN to exchange EDI messages and documents directly with each other.

In a one-to-one VAN, the VAN acts as a facilitator, providing a secure and reliable platform for businesses to transmit their EDI transactions without the need for establishing and maintaining multiple individual connections. This simplifies the EDI process, reducing the complexity and cost associated with managing multiple connections and data transfer protocols.

One-to-one VANs are often used by companies with high transaction volumes and a need for frequent and rapid exchange of information, such as those in the retail, healthcare, and manufacturing industries. By using a one-to-one VAN, these companies can streamline their supply chain operations, improve efficiency, and reduce errors and delays in the order fulfillment process

Many-to-Many VAN (Value-Added Network)

A many-to-many VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where multiple trading partners or businesses can exchange EDI messages and documents with each other through a shared VAN.

In a many-to-many VAN, the VAN acts as a central hub or intermediary, allowing businesses to connect with each other and exchange EDI transactions in a secure and standardized way.

Many-to-many VANs are particularly useful for businesses with complex supply chains involving multiple trading partners, as they allow for seamless integration and communication between different systems and platforms. They are also widely used in industries such as healthcare, retail, and finance, where data privacy and security are critical considerations.

Overall, many-to-many VANs provide a scalable and flexible solution for businesses to manage their EDI transactions, enabling them to streamline their supply chain operations, reduce costs, and improve their overall efficiency and competitiveness.

One-to-Many VAN

A one-to-many VAN (Value-Added Network) is a type of electronic data interchange (EDI) network where a single business or trading partner uses a VAN to communicate with multiple other trading partners.

One-to-many VANs are particularly useful for businesses that need to communicate with multiple suppliers or customers, as they provide a standardized and secure platform for exchanging data and messages. They are also widely used in industries such as retail, manufacturing, and healthcare, where frequent and rapid communication with trading partners is critical to the supply chain.

One-to-many VANs provide a cost-effective and efficient solution for businesses to manage their EDI transactions, enabling them to streamline their supply chain operations, reduce errors and delays, and improve their overall competitiveness.

Which Companies Use the Value Added Network (VAN)?

Many companies across different industries still use Value Added Networks (VANs) to exchange business-to-business (B2B) electronic transactions (EDI X12/EDIFACT) with their trading partners. Here are some examples of companies that use VANs:

General Motors: The automobile manufacturer uses a VAN to exchange electronic transactions with its suppliers.

Kaiser Permanente: The healthcare provider uses a VAN to exchange electronic healthcare transactions with its partners.

Procter & Gamble: The consumer goods company uses a VAN to exchange electronic transactions with its suppliers.

FedEx: The logistics company uses a VAN to exchange electronic transactions with its partners.

These are just a few examples, but many other companies in various industries use VANs to exchange EDI with their trading partners.

Choosing a VAN Provider

When choosing a VAN provider, businesses should consider a variety of factors, including the provider’s experience, pricing, reliability, and range of value-added services. It’s also important to choose a provider that offers a high level of security for data exchange, including encryption and digital signatures. Businesses should also consider the provider’s ability to integrate with their existing systems and processes, as well as their customer support and training resources.

How EDI2XML Can Help

Understanding the importance of a Value Added Network (VAN) is crucial for businesses looking to streamline their EDI processes. Choosing the right VAN provider is essential to ensure that your EDI transactions are secure, reliable, and efficient.

As a trusted EDI supplier for over 20 years, we have the expertise and experience to help you navigate any EDI issues you may face. We are committed to providing the highest level of service to our clients and offer a free 1st consultation to help you get started.

Contact us today to learn more about how we can help your business succeed in the world of EDI.
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Business Automation: How to Choose the Right EDI Solution

Business Automation through EDI Solution

Most entrepreneurs who have never experienced EDI before, feel overwhelmed when it comes to selecting an EDI provider or solution, to start exchanging business documents with their trading partner.

There are multiple EDI solutions from different big and small EDI Providers. At first blush, each EDI solution looks better than the other, but how do you choose the best EDI solution for your business?

The Electronic Data Interchange (EDI) is the exchange of business documents electronically between business partners.

In this article, I will review the main EDI solutions on the market, using the solutions from EDI2XML as an example, additionally, I will give you useful tips on how to choose an EDI provider without losing sight of key points that will affect the long-term success of EDI.

Why You Should Be Careful When Choosing an EDI Solution?

For many organizations, EDI is a mission-critical application whose failure can lead to a complete stoppage of activity, therefore, the choice of an EDI solution, as well as EDI provider, must be approached carefully.

EDI is responsible for supporting a wide variety of business processes – inventory management, orders, purchasing, logistics, tenders, etc.

Perhaps there is no such field of activity where you can run, without the exchange of documents at all, which means that EDI solutions can be needed everywhere.

Choosing the Right EDI Solution to Automate Your Business

EDI is used for B2B communication in all industries by both large corporations and the smallest companies. That is why there are different EDI solutions designed for different markets and companies.

EDI allows businesses to exchange documents quickly since it eliminates the need to prepare and process mail or to make phone calls, faxes, or paperwork when ordering or selling.

By choosing the right EDI solution, you will make it easier to communicate with your business partners and bring value to your business.
EDI automation

For example, if you are a small company that has only one trading partner that requires EDI exchange, you need a simple EDI solution that does not require a large initial investment, which will allow you to quickly start exchanging EDI documents with your business partner.

Continuing on the topic of EDI solutions, let’s take a look at the different options of EDI solutions on the market, using the example of EDI2XML as EDI service provider.

It should be remembered that the details of EDI solutions from different EDI providers always differ. However, the description below will give you a general idea of the existing EDI solutions.

Fully Managed EDI Services

EDI fully managed service refers to a service where the EDI provider takes full responsibility for managing EDI operations and integrating them on behalf of the client.

With Fully Managed EDI Service, there is no need for the customers to install any software or hardware on their computers. The EDI provider will take care of the implementation and configuration of the process flows. He will be in charge of handling the data routing and will be responsible for the data format conversion and integration.

Through the fully managed EDI service, an EDI provider will take on a wide range of responsibilities that are usually handled by an internal IT department. With a fully managed EDI solution, EDI2XML delivers a turnkey project to connect your business partners.

Which Companies Can Benefit From a Fully Managed EDI Service?

Companies that need to use EDI but don’t want to spend the time and effort on the EDI implementation themselves, or who don’t have the necessary EDI skills and specialists who can do it, need an EDI service provider to handle all the configuration and integration of EDI. In this case, a fully managed EDI service is the ideal solution.

Find out more about Fully Managed EDI Services its process flow, features, technical details and pricing.

EDI Web Service

The EDI Web Service is an HTTP service from EDI2XML that works over the internet on the private platform. This HTTP EDI Web Service (REST API) can receive HTTP requests to convert EDI messages to XML and XML messages to EDI (based on EDI2XML’s proprietary format).

There are many reasons why EDI2XML Web Service is the right choice:

1. Solution based on self-service

2. An affordable price

3. Our free trial period lasts for 15 days without any obligation, so you have nothing to lose.

4. Getting started will take you less than an hour

5. There is no contract with us, and no commitment.

6. We charge on a month-to-month basis; you can cancel at any time with 30 days’ notice.

7. There is a very simple and dynamic pricing scheme that is easy to understand and use

8. The availability and reliability of the service

9. Using proven technologies that are backed by a wealth of experience 

10. Support from a highly skilled technical team is outstanding

It is very simple and quick to get started with the EDI2XML Web Service. Within less than an hour, you can make the first Call to the Web Service and see the response. 

We offer a well-documented HTTP EDI Web service, and each subscription includes instructions.  
Cloud Services EDI

Who is the EDI Web Service For?

The EDI web service is intended for developers and enterprises who want to create their own EDI (Electronic Data Interchange) integrations.

Typically, these users can interact with external APIs and web services to convert EDI to XML and XML to EDI. Additionally, they have the expertise and resources to work with web services and HTTP requests.

EDI2XML Web Service is a reliable service for IT professionals who need to perform such integration projects.

We suggest EDI Web Service to companies that have their own technical resources to work with REST APIs (calls and consumptions of HTTP Rest Web services).

Request EDI2XML Web Service Price List

On-Premises EDI Solution

On-premises EDI refers to the implementation of EDI software that is installed and operated through the customer’s own server and computing infrastructure.

On-premises EDI deployment from EDI2XML involves two components that will be deployed on-premises:

1. EDI2XML translation and transformation engine to convert X12/EDIFACT messages to XML and vice versa.

2. A license of Magic xpi a third-party integration and automation platform.

Read more about Magic xpi integration platform as the best fit for enterprise data integration

Features of the EDI2XML service “on premises”

1. The application is deployed on the customer’s server

2. Service that is based on a subscription

3. There is a standard XML format for incoming EDI messages

4. Standard XML format for Outgoing X12

5. XML schemas (.xsd) are also provided

6. SMTP/FTP/sFTP protocols are included in the package
EDI-On-Premises solution

When On-Premises EDI is is Right for You?

On-premises EDI is suitable for companies that have strict IT management rules and procedures that they can only deploy software solutions on their own premises.

You should also consider how much EDI data you want to exchange with your business partner. If you expect a very large volume of data, you might consider an on-premises EDI solution. A company’s IT architecture and its team play a vital role in implementing EDI on-premises. Make sure the company has the proper hardware infrastructure, and that the IT department is ready to tackle this project.

Request EDI On-Premises Pricing Plans

Choosing an EDI Provider: What to Look For

Now that we’ve discussed the main types of EDI solutions, let’s talk about what to look for in an EDI provider. There are several different kinds of EDI service providers available.

In developed markets, as a rule, a large service provider gets almost everything – the vast majority of customers start using its product because they do not bother with in-depth analysis of technologies and services, but use the same thing that other companies or business partners utilize.

It is for this reason that demonstrations of a large number of customers are one of the most popular marketing techniques. Of course, a large customer base may indicate the reliability of the EDI provider (which does not always correlate with the quality of the EDI solution, price flexibility, service, and technical support) that you can get from smaller EDI providers.

The following are some basic recommendations about what you should look for when choosing an EDI provider for your company.

– Exclude sales and market share statistics from your list of EDI provider criteria.

– Rely on relatively new projects that are comparable in scope to your organization as references.

– It is critical to pay attention to how quickly the company responds to your requests when you contact them.

– A provider of EDI services should be able to connect you with technical experts for a personalized consultation.

– If you need a customized quote, how quickly will they be able to provide it to you?

– How does an EDI provider support its customers? When it comes to technical issues, how quickly can they resolve them?

– Check if the prices of the company can be adjusted based on your needs.

Remember that a big EDI provider doesn’t always mean the best.

Conclusion: How to Choose the Right EDI Solution

The use of EDI has become a necessity for most companies today. Meanwhile, the choice of an EDI solution has become very difficult for companies. This is because the market for EDI solutions is currently quite large, in addition, EDI solutions in terms of technical characteristics and functionality have become quite similar to each other.

Therefore, factors such as the reliability, experience, and flexibility of the EDI provider often become the last argument when choosing an EDI solution.

If you are not completely satisfied with your EDI provider, then read this helpful article How to Change Your EDI Service Provider

Are you looking for ways to improve your business processes? Then look no further! Our EDI services are here to help! Our EDI experts are available to give you a free consultation if you are still unsure which EDI solution is right for you.
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What is EDI 940 Warehouse Shipping Order?

When a company decides to outsource warehouse functionalities such as shipping and fulfillment operations to a 3PL (a third-party logistics provider), it is faced with the fact that 3PL providers require the exchange of documents in electronic format – EDI (Electronic Data Interchange). The most exchanged EDI documents in this industry are: EDI 940, EDI 945, and EDI 856. Although companies already using EDI, are familiar with the common EDI transactions like EDI 810 (invoice) and EDI 850 (Purchase Order), the transactions used by the 3PL industry, might create confusion for them.


In this article, we will look closer at what EDI X12 940 is, why and who uses it, what information a Warehouse Shipping Order contains, and other important information.

EDI 940 definition

The EDI 940 (X12 940 Warehouse Shipping Order) is an electronic document that is used to notify a third-party warehouse or third-party logistics provider (3PL) that a shipment is required. Companies also use EDI 940 to confirm a shipment change or a cancellation of a previously submitted shipping order.

Who uses the EDI 940 – Warehouse Shipping Order?

Warehouse Shipping Order (or the ANSI X12 940 Transaction set) is used by the supplier/depositor (i.e. manufacturer or wholesaler) to notify the third-party logistics warehouse of the need to ship the goods to the buyer (i.e. retailer, distributor); this 940 transaction set, provides detailed information about the goods, the required timing to ship, and the recipient.
Companies use EDI 940 as instructions for shipping goods from a third-party warehouse in two different ways: either to instruct the 3PL partner to send one type of products to several different destinations, or, to send instructions to shipping various items to one location or destination.

Why do warehouses and 3PL providers use EDI?

The main business process of any warehouse or third-party logistics company is to optimize the procedure to store goods, improve efficiency when preparing shipment for delivery to its destination.

To provide uninterrupted service on time and with the least errors, warehouses and 3PL providers need to automate their business processes, which is the main reason to use EDI (Electronic Data Interchange).

Using EDI, logistics companies, 3PL providers, and warehouses can get important benefits in their operations such as:
  • Improved shipping and receiving planning
  • increase order-processing speed
  • eliminates errors associated with manual data entry
  • Reduced storage costs
  • Reduced inventory cost and accurate inventory forecasts
  • Reduced transport costs
  • Better use of staff and labor force
  • Avoid of out-of-stock situations

Key information included in an EDI 940 Warehouse Shipping Order

The 940 document is a kind of shipping instruction for warehouse; it provides the receiver with necessary information to be to prepare a shipment. At a minimum an EDI 940 transaction must include:
  • Seller’s order number
  • Buyer’s order number
  • Date of shipment
  • Buyer’s pick-up location (address, contact, etc.)
  • Products and quantities to be shipped

Depending on the type of goods and preliminary agreements with the warehouse, the Warehouse Shipping Order may contain the following:
  • Type of pallet configuration (standard and non-standard).
  • Requirements for transportation such as temperature or other special conditions for transportation.
  • Information about the carrier or third party involved in the delivery (for example, a broker).
  • Other product information (batch numbers and production codes).

Warehouse Shipping Order Transaction Set (EDI 940) Sample File

ISA*00*          *00*          *01*051950838  *ZX*901234572111  *191016*0845*U*00300*000000001*0*T*:!

GS*OW*051950838*901234572111*20191016*0845*1*T*004010!

ST*940*0001!

W05*N*0060100015****30!

N1*BT*Unicorn Systems Inc.*82*0001002290!

N3*PO Box #796044*178 WEST 56TH STREET!

N4*Austin*TX*78169*US!

N1*ABG*City Inc.*82*1200!

N3*1290 Cordeaux Street!

N4* Cupertino *CA*94129*US!

N1*SF*Golfing Inc.*82*6201!

N3*Unit 205, 8/F,Full Centre!

N4*Siu Leak Yuen, Tatin**999097*HK*93*1000!

N1*ST*Unicorn Systems Inc.*82*0004008088!

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Warehouse Shipping Order Transaction Set (EDI 940) Specification

EDI 940 Warehouse Shipping Order is a transaction set of the X12 Standard that is widely used in North America.

A three-code number – 940, identifies the warehouse Shipping Order Transaction Set. The document consists of the following segments:

Message Envelop / Group:
• ISA Interchange Control Header
• GS Functional Group Header

Heading:
• ST Transaction Set Header
• W05 Shipping Order Identification (N = Original Order)
• N1 Name (‘SF’ – Ship-from, ‘SF’ – Ship-from)
• N3 Address Information
• N4 Geographic Location
• G62 Date/Time (‘02’ – Requested Arrival ‘10’ – Pick-Up Date)
• NTE – Notes/Special Instructions (‘WHI’ Warehouse Instruction)
• W66 Warehouse Carrier Information

Detail (Begins detail loop):
• LX – Assigned Number
• W01 – Line Item Detail – Warehouse
• G69 Line Item Detail – Description
• N9 Reference Identification
• W20 – Line-Item Detail (Miscellaneous)
• AMT – Monetary Amount

Summary:
• W76 Total Shipping Order
• SE Transaction Set Trailer (the last segment of each transaction set)

Message Envelop / Group Footer:
• GE Functional Group Trailer
• IEA Interchange Control Trailer

Workflow to Exchange EDI 940 Warehouse Shipping Order

Let’s look at one of the possible and simplest scenarios in which the exchange of an EDI 940 document is involved. It should be considered that the manufactured or ordered products, are delivered in advance to the 3PL warehouse (your fulfillment partner) and the inventory of your store in your CRM is synchronized with the inventory of the 3PL warehouse. The standard workflow for exchanging a warehouse shipping order can be described as follows:

1. The customer (or buyer) sends a Purchase Order (EDI 850) to the supplying company (or seller).

2. The seller responds to the customer by EDI, transmitting an 855 Purchase Order Acknowledgment to accept / reject / modify the Purchase Order.

3. Based on the EDI 850 order, the supplier than sends the warehouse shipping order (EDI 940) to the 3PL warehouse, describing the order details.

4. The warehouse picks, packs, and ship the order

5. The warehouse sends back a warehouse shipment notification (EDI 945) to the vendor to confirm the shipment that was transmitted to the buyer.

6. Upon receipt of the EDI 945 transaction, the supplier (or seller) generates an EDI 856 – Advance Ship Notice to notify the buyer of an upcoming delivery.

7. The supplier than sends an Invoice (EDI 810) to the buyer upon receipt of the goods; sometimes the invoice is sent just about the same time when the merchandise is dispatched to the buyer.
Workflow to Exchange EDI 940 Warehouse Shipping Order

The above workflow is for a general understanding of the process, so keep in mind that there can be a much more complex relationship between buyer, seller, and third-party warehouse. In addition to the transactions mentioned above, the 3PL provider and supplier can exchange other documents such as:

• Warehouse Stock Transfer Shipment Advice ( EDI 943)
• Warehouse Stock Transfer Receipt Advice (EDI 944)
• Inventory Inquiry/Advice (EDI 846)
• Warehouse Inventory Adjustment Advice (EDI 947)

EDI 940 and EDI 945

The Warehouse Shipping Advice (EDI 945) is playing a special role in the partnership between the 3PL provider and supplier. The function of Warehouse Shipping Advice is like an EDI 856 (Advance Ship Notice).
Using the EDI 945 warehouse notifies the seller of the shipment. Moreover, by EDI 945, the 3PL provider notifies the seller whether a full order has been shipped or has been shipped with exceptions.
EDI 945 usually contains the following information:
• buyer’s order number
• the actual date of shipment
• used carrier
• bill of lading number
• Item and quantity
The warehouse can also explain why the shipment date was changed, why the products were excluded from the batch and information about the replacement of the product.

Benefits of using an EDI 940 Warehouse Shipping Order

The advantages of using EDI in general and EDI 940 transaction, over traditional methods of communications such as e-mail, paper or fax, are undeniable:

1. Reduced time of order processing.

2. Reduced expenses related to office supplies and delivery of documents, as well as for staff salaries.

3. Reduced manual data entry, making it easier for both sellers and warehouses

4. Elimination of loss of documents and human errors.

5. Instant delivery and receipt of documents.

6. Speed up payments

3PL Warehouse EDI Integration

You can start exchanging EDI 940 messages in less than an hour using our EDI2XML REST web service. You do not need to commit to any contracts; We provide a free 15-days trial period.

You can also take advantage of our over 21 years of EDI integration experience by choosing a fully managed EDI service.

Contact us for a free consultation with one of our EDI experts to choose what works best for your business.

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

Our EDI2XML Blog was selected by Feedspot as one of the Top 10 EDI (Electronic Data Interchange) Blogs on the web.

What Are the Differences Between ANSI X12 and UN/EDIFACT

X12 vs. EDIFACT

Doing business and interacting with trading partners is associated with the need to prepare, send, receive and process a large number of documents. Today, around the world, almost all enterprises from small businesses to large corporations use EDI (Electronic Data Interchanges) to communicate with business partners.

The most common standards that are used in all Industries are ANSI ASC X12 (X12) and UN/EDIFACT (EDIFACT). Both standards serve to exchange documents electronically and execute business processes between trading partners. The two standards are quite similar, however, there are numerous ways in which ANSI X12 and EDIFACT are different. In this article, we will compare the two most popular standards.

EDIFACT:
  • EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) is an international standard for electronic data interchange that was developed by the United Nations.
  • It uses UN/EDIFACT syntax and is widely used in Europe and other regions.
  • EDIFACT allows for flexible message definition and supports a wide range of business processes, including e-commerce, procurement, transportation, and healthcare.

EDI X12:
  • X12 (also known as ANSI X12) is a standard for electronic data interchange in the United States.
  • X12 was developed by the Accredited Standards Committee X12 and is maintained by the ASC X12 Standards Development Organization.
  • X12 is used in a variety of industries, including healthcare, finance, and logistics, and is considered a robust and reliable format for data interchange.

EDI Standards in Europe and North America

The first difference between the two EDI standards is the geographic location of users.

– X12 is mainly used in the United States and North America in general.

– EDIFACT is mostly used by companies based in Europe and Asia.

ANSI X12 and EDIFACT Standards Developers

ANSI ASC X12 Standard is developed and maintained by the Accredited Standards Committee X12 (also known as ASC X12) chartered by the American National Standards Institute (ANSI) in 1979.

EDIFACT – Electronic Data Interchange for Administration, Commerce and Transport. This standard is developed and supported by two international organizations: The United Nations Economic Commission for Europe (UNECE) and the International Organization for Standardization (ISO).

ANSI X12 and EDIFACT Document Structure

Basically, the structures of X12 and EDIFACT are similar. Both standards have principally the same structure but use different terminologies.

The figure below shows the structure of X12 and EDIFACT documents that contain Interchange, Functional Group, Transaction set.
x12 vs EDIFACT

For more information on the structure of EDI documents, please read these articles:


– EDI ANSI ASC X12 Standards – Technical Overview

– What is EDIFACT? | UN / EDIFACT standard overview

 EDI Terminologies

Understanding the terminology used in EDI is essential to successfully implementing and utilizing this technology. Some of the key EDI terminologies include EDI standards such as ANSI X12 and EDIFACT, which define the structure and content of EDI messages.

As was mentioned above, ANSI X12 and EDIFACT have different terminologies. The table below demonstrates the difference between both standards.
Terminologies EquivalenceEDI X12 EDIFACT
…………………………………………………………………………………………………………………………………………………….
An electronic business document, such as an Invoice, Purchase Order, etc.Transaction SetMessage
………………………………………………………………………………………………………………….………………………………….
The blocks of multiple segments of the same type grouped together.LoopsGroups
………………………………………………………………………………………………………………….………………………………….
Special characters to differentiate segments and elementsTerminatorSeparators
………………………………………………………………………………………………………………….………………………………….
Interchange Control. Header/TrailerISA/IEAUNB/UNZ
………………………………………………………………………………………………………………….………………………………….
Functional Group. Header/TrailerGS/GEUNG/UNE (optional)
………………………………………………………………………………………………………………….………………………………….
Transaction Set, (Message). Header/TrailerST/SEUNH/UNT

Terminators/Separators

X12 and EDIFACT use special characters to separate segments and elements in the document.

– ANSI X12 to separate segments generally uses a tilde ( ~ ) and to terminate elements asterisk ( * )
– EDIFACT normally uses a period ( . ) between segments and a plus ( + ) within elements.

However, both EDI standards allow customization, and different characters can be used, depending on the implementation.

Composite

A Composite Element is a group (two or more) simple elements separated by a Composite Separator symbol. Composite Element is used in both standards; however, Composite Element is very commonly used in EDIFACT.

– X12 uses a symbol Greater Than ( > )

– EDIFACT separates composite elements with a colon symbol ( : )

Acknowledgments

Both EDI standards use Acknowledgments.

– X12 uses a Functional Acknowledgment or 997 transaction set. An EDI 997 serves as a response, to acknowledge that an EDI transaction was received. TA1 served for describes errors at the ISA level.

– EDIFACT uses CONTRL acknowledgments, which is like the X12 997 Acknowledgments.

X12 Transaction Number and EDIFACT ID

In the ANSI X12 standard, all documents have 3-digit numbers, for example, 810 for an Invoice, 846 for an Inventory Inquiry and Advice, 856 for Advanced Ship Notice.

According to the EDIFACT rule, the name of the document must be limited to 6 letters, for example, INVOIC derived from the word Invoice, INVRPT for Inventory report, DESADV is the abbreviation for Despatch Advice.
  • Syntax: EDIFACT uses UN/EDIFACT syntax while X12 uses an ASCII-based syntax.
  • Message structure: EDIFACT messages have a more flexible structure than X12 messages, which have a more rigid structure.

Different Types of EDI Documents: ANSI X12 vs EDIFACT

The following table lists some of the key EDI X12 Transaction Sets with the corresponding EDIFACT messages.
X12 NoEDIFACT IDNameUsage
………..…………………………………………………………………………..………………………………………………………………………………….
 810INVOICInvoice.Used to receive payment for goods or services provided
………..…………………………………………………………………………..………………………………………………………………………………….
820REMADVPayment Order/Remittance Advice.Used to transmit information relating to payments
………..…………………………………………………………………………..………………………………………………………………………………….
830DELFORPlanning Schedule.Used to share with the supplier’s forecast purchase plans
………..…………………………………………………………………………..………………………………………………………………………………….
832PRICATPrice/Sales Catalog.Used to request or provide prices and product information.
………..…………………………………………………………………………..………………………………………………………………………………….
846INVRPTInventory Inquiry/Advice.Used to communicate inventory levels.
………..…………………………………………………………………………..………………………………………………………………………………….
850ORDERSPurchase Order.Used to place an order for goods or services. 
………..…………………………………………………………………………..………………………………………………………………………………….
852SLSRPTProduct Activity Data.Used to provide inventory, sales, and other product activity information.
………..…………………………………………………………………………..………………………………………………………………………………….
855ORDRSPPO AcknowledgementUsed as an acknowledgment of the purchase order
………..…………………………………………………………………………..………………………………………………………………………………….
856DESADVAdvance Ship Notice (or Dispatch Advice in EDIFACT)Used to inform the recipient in advance, about the contents of the shipment.
………..…………………………………………………………………………..………………………………………………………………………………….
860ORDCHGPO Change (Customer triggered)Used to communicate order changes to the supplier.
………..…………………………………………………………………………..………………………………………………………………………………….
865ORDRSPPO Change (Supplier triggered)Used for acceptance or rejection of changes to a previously submitted purchase order
………..…………………………………………………………………………..………………………………………………………………………………….
997CONTRLFunctional AcknowledgmentUsed to acknowledge that an EDI transaction, was received.

EDI Standards for Special Industry

In addition to EDIFACT and X12 discussed above, there are many other EDI standards that were developed as a result of specialized business requirements in various industries. For example:

RosettaNet is used mostly in the electronic chip and technology Industry.

HIPAA and HL7 for Healthcare and Health Insurance.

ODETTE for the automotive industry in Europe.

SWIFT for exchanges messages between banks and financial institutions.

EDI Integration

For clients who do not have the resources to do X12 or EDIFACT in-house, we, at EDI2XML offer Fully managed EDI Services.

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EDI2XML is an EDI service provider with 20+ years of expertise in EDI and integration projects. We have clients located in North America, Europe, and the Middle East and work with all EDI standards including ANSI X12 and EDIFACT. Contact us if you have any questions or EDI integration needs.
Free EDI consultation

Electronic Data Interchange: Key Information You Need to Know

 

This post was updated to reflect current trends and information.


EDI (or Electronic Data Interchange), has been part of business for long time; However, questions about its functioning, pros and cons are still not clear for new EDI users and those who have been using EDI for years in their business.

To help better understand EDI, we created this e-book “Electronic Data Interchange: Key Information You Need to Know”, where you find answers to most of the frequent questions like What is EDI? Benefits of EDI, EDI communication (EDI-VAN) and (EDI -INT) and much more.

It was built for beginners and those who have strong EDI technical knowledge. We are certain you will get important information out of this eBook, that is certainly useful to your EDI projects.

We invite you to download this e-book from EDI2XML Resource Page

Free EDI eBookFree EDI consultation

 

ANSI ASC X12 Standards Overview

This post was updated to reflect current trends and information.

To exchange business documents and transactions between business partners via EDI (electronic data interchange), most companies in North America use the EDI ANSI ASC X12 Standards. This overview provides some basic information about the X12 standards for electronic data interchange (EDI).

What do ANSI, ASC, X12, and RSC mean?

The American National Standards Institute (ANSI) is a non-profit organization that controls the development of standards for processes, services, and products in the United States. ANSI also synchronizes U.S. standards with international standards so that American products can be used all over the world.

X12 Overview

Chartered by the ANSI for over 40 years, X12 develops and maintains EDI standards and XML schemas that govern business processes around the world.
X12 is comprised of thousands of experts representing over 600 companies from various industries. X12 Membership is open to any organization, company, or even individual, who directly and materially affected by X12 activities.
To facilitate the exchange of business transactions, X12 members regularly optimize the EDI standard.
X12 consists of two committees:
– Accredited Standards Committee (ASC)
– Registered Standards Committee (RSC).

Useful: What is EDI? (A technical introduction to EDI)

Accredited Standards Committee ACS

Since 1979, the Accredited Standards Committee X12 (ASC) has been developing and maintaining the X12 standard, which can be represented as US national standards or UN / EDIFACT international electronic data interchange standards.

The ASC is composed of different subcommittees:
– X12C – Communications and Controls
– X12F – Finance
– X12I – Transportation
– X12J – Technical Assessment
– X12M – Supply Chain
– X12N – Insurance

Registered Standards Committee (RSC)

The RSC is responsible for the development and support of X12 work products for various industries but is not intended to be presented as US national standards.

What is EDI ANSI ASC X12 Standards?

The ANSI ASC X12 Standards is sometimes called the EDI ASC X12, ANSI X12, ASC X12, or simply the X12 Standard. X12 is a set of standards and rules that determine a specific syntax for structuring and transferring electronically business documents between partners. There are different types of business documents in EDI, which often are called “Transaction Sets”.

ASC X12 Transaction Set

The Transaction Set – is a single business document such as a Purchase Order, Invoice, Student Educational Record (Transcript), Healthcare claim, Ship Notice (ASN). There are hundreds of Transaction Sets available in the ANSI ASC X12 standards. Each set of transaction data is identified by a 3 digits code number:

ASC X12 Transaction Set

X12 Transaction Set Structure

Many X12 transaction sets have 3 parts. The segments that can be used in each of these parts in a particular document (such as an invoice) are listed in the related tables defined in the X12 standards document. For example:

X12 Transaction Set Structure

ASC X12 Segments and Sequence

The following Purchase Order example, shows which segments can be used in the transaction set and the desired sequence of segments:

ID            TITLE

ST           Transaction Set Header

BEG        Beginning Segment for Purchase Order

CUR       Currency

REF         Reference Identification

PER        Administrative Communications Contract

TAX        Tax Reference

FOB        F.O.B. Related Information

CTP        Pricing Information

PAM      Period Amount

CSH        Sales Requirements

TC2         Commodity

Beginning and Ending ASC X12 Transaction Sets:

• A transaction in an X12 document, always begins with the Transaction Set Header (ST) segment

• A transaction in an X12 document always ends with the Transaction Set Trailer (SE) segment

X12 Structure

If you want to learn more about the structure of EDI ANSI ASC X12, please read this article: EDI ANSI ASC X12 – Technical Overview

ANSI X12 EDI document types

Since a uniform standard of EDI (electronic data interchange) ANSI X12 was developed, a huge number of companies use it in its business-to-business (B2B) operations. Although ANSI X12 standard was developed to support companies in different types of industries in North America, these days, businesses worldwide are using X12 EDI standard.

As mentioned above, there is a huge amount of ANSI X12 document types available for use. ANSI X12 standard is used in finance, transportation, healthcare, insurance, government, supply chain and other industries for performing diverse operations. The example below shows some of those EDI documents:

Communications and Control:

  • EDI 864 Text Messages
  • EDI 997 Functional Acknowledgment
  • EDI 999 Implementation Acknowledgment
  • EDI 993 Secured Receipt or Acknowledgment

Finance:

  • EDI 130 Student Educational Record (Transcript)
  • EDI 262 Real Estate Information Report
  • EDI 810 Invoice
  • EDI 812 Credit/Debit Adjustment
  • EDI 131 Student Educational Record (Transcript) Acknowledgment
  • EDI 149 Notice of Tax Adjustment or Assessment
  • EDI 150 Tax Rate Notification
  • EDI 821 Financial Information Reporting

Transportation:

  • EDI 120 Vehicle Shipping Order
  • EDI 106 Motor Carrier Rate Proposal
  • EDI 419 Advance Car Disposition
  • EDI 216 Motor Carrier Shipment Pickup Notification
  • EDI 309 Customs Manifest

Supply Chain:

Insurance:

  • EDI 270 Health Care Eligibility/Benefit Inquiry
  • EDI 271 Health Care Eligibility/Benefit Response
  • EDI 111 Individual Insurance Policy and Client Information
  • 837 Health Care Claim

EDI Outsourcing

We support all EDI standards including ANSI(ASC) X12, EDIFACT, RosettaNet, HIPAA / X12. We provide a cloud-based, fully managed EDI integration solution under our program EDI2XML Managed Services which allows our clients to interact with their business partners without implementing a complex EDI infrastructure.

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• Cost: Improved inventory management and minimized use of paper and physical storage

• Quality: Enhanced business relationships with your business partners, and accuracy of information

• Profit: Reduce costs

• Efficiency: Increased productivity

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What is EDI 846 document?

,

This post was updated to reflect current trends and information.

What is EDI 846 Document?

One of the most important electronic EDI documents heavily exchanged between trading partners is the 846 X12 document. It is important mainly due to the evolution of the drop-shipping business that saw a great advancement in the last few years, because of eCommerce and online sales.

The EDI 846 document, also known as the Inventory Inquiry/Advice transaction set, is used in Electronic Data Interchange (EDI) to provide inventory information between trading partners in the context of e-commerce. This transaction set is commonly employed in the retail industry to facilitate the exchange of inventory details.

What is EDI 846

This EDI document originates from the paper-based “inventory inquiry and advice”. Basically, it is a notification sent by the manufacturer to the seller, advising about stock status and availability. It can also include pricing information. In other words, this EDI message is to exchange information about stock levels and the availability of goods.

For e-commerce, it is very important to have up-to-date information about the availability of goods. That is why one of the major EDI requirements for Amazon, is the capability of the supplier to transmit an EDI 846 Inventory Inquiry message. This is not only a requirement for Amazon exclusively; Other leading retailers such as Cabela’s, Wal-Mart, Costco … all have the same EDI requirement, to be able to feed their e-commerce platform with quality inventory status information.

The EDI 846 document can be sent to business partners, as many times as necessary. It can be 2-3 times a week, up to several times a day; each retailer has his own requirements. EDI 846 Inventory Inquiry/Advice permits suppliers to provide trading partners with information about their products without forcing them to make a purchase. In addition, the EDI 846 transaction is often used to notify business partners about the availability of goods at discounted prices.

EDI 846 Inventory Inquiry and Advice Usage

The other obvious question about 846: who uses this EDI 846 message other than Amazon and the major eCommerce retailers?
The truth is that not only eCommerce retailers can use this EDI transaction and exchange 846 documents. All trading partners can agree to use it to exchange inventory availability and stock level. Some examples:

  • sellers to provide inventory information to a potential customer
  • seller’s representatives to supply the seller with inventory information
  • one seller’s location to give another location inventory information
  • seller to demand the availability of inventory

Diverse Applications of the EDI 846 Transaction Set in Varied Industries and Business Scenarios

The EDI 846 Inventory Inquiry/Advice transaction, has varied usage across different industries and business scenarios. Its primary purpose is to provide detailed information about the current inventory levels of a product at a specific location, typically a warehouse or distribution center. This information is crucial for effective supply chain management and helps trading partners optimize their inventory levels and order fulfillment processes.

Here are some of the varied uses of EDI 846:

  1. Inventory Replenishment: Retailers and suppliers use the EDI 846 to communicate current inventory levels and forecast demand. This helps in making timely decisions regarding inventory replenishment and avoiding stockouts.
  2. Order Planning: The information exchanged through EDI 846 aids in order planning by providing insights into product availability. Retailers can adjust their order quantities based on the actual inventory levels at the supplier’s end.
  3. Demand Forecasting: By analyzing historical inventory data provided through EDI 846, businesses can better forecast future demand for products. This can lead to more accurate production and procurement planning.
  4. Vendor-Managed Inventory (VMI): In VMI arrangements, suppliers use EDI 846 to monitor and manage the inventory levels at their customers’ locations. This collaborative approach helps in maintaining optimal stock levels and reducing carrying costs.
  5. Supply Chain Optimization: The use of EDI 846 contributes to overall supply chain optimization by enhancing communication and collaboration between trading partners. It streamlines the flow of information related to inventory, reducing manual processes and improving efficiency.
  6. E-commerce Integration: In the context of e-commerce, EDI 846 plays a role in updating online product availability and supporting real-time inventory visibility for customers. This is important for online retailers and marketplaces to provide accurate information to customers about product availability.

Overall, the varied usage of EDI 846 reflects its importance in facilitating efficient inventory management, enhancing collaboration between trading partners, and improving the overall supply chain performance.

What Information Does the EDI 846 Document Transmit?

In the EDI 846 transmission, inventory location identification, item, and part description, and quantity are the basic information included in almost any EDI 846 document; however, additional information can be added such as:

  • Quantity forecasted
  • Quantity sold already
  • Quantity available in stock
  • Pricing information
sample-edi-846

With EDI 846 online stores optimize their deliveries. They do not need to enter data manually into their internal systems, such as ERP  or back-office of their stores. It gives an accurate information to online shoppers about the availability of stock, in a real-time mode. Moreover, it does reduce the administration fees and expenses to process orders and items bought by consumers, while having no stock.

What are the Benefits of Using the EDI X12 846 Inventory Inquiry/Advice?

The EDI X12 846 Inventory Inquiry/Advice transaction set provides several benefits for businesses that use it. Here are some of the key benefits:

1. Improved inventory management: The 846 transaction set provides real-time updates on inventory levels and enables businesses to quickly identify inventory shortages or excesses. This helps businesses to optimize their inventory levels, reduce carrying costs, and avoid stockouts.

2. Increased efficiency: The use of EDI eliminates the need for manual data entry and reduces the risk of errors. This can result in faster order processing times, reduced labor costs, and improved accuracy.

3. Enhanced collaboration: The 846 transaction set allows for seamless communication between trading partners and provides a standardized format for inventory information. This makes it easier for businesses to collaborate with their partners and share inventory data consistently and efficiently.

4. Better decision-making: By having access to real-time inventory data, businesses can make better decisions about when to reorder products, how much to order, and where to allocate inventory. This can help businesses to reduce inventory holding costs, improve customer satisfaction, and increase profitability.

5. Competitive advantage: By using the 846 transaction set, businesses can differentiate themselves from their competitors by offering faster, more accurate inventory information to their customers. This can help businesses to attract and retain customers, increase customer loyalty, and gain a competitive edge in the marketplace.

For more information about how edi2xml fully managed services or web service can help you set up your EDI 846 Inventory Inquiry/Advice with your trading partners, please contact us.

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EDI X12, EDIFACT, CSV, XML – Why is a conversion necessary?

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This post was updated to reflect current trends and information.
x12-to-xmlcsv

EDI formats are not understood or easily read by just anyone. It requires an EDI expert to be able to read the files and dissect them. Many large Trading Partners impose their own rules and requirements on top of those outlined by the standards, which is why, in many cases of translation, it is not always as straightforward as hoped. Most business executives are hesitant to begin trading via EDI because of these complexities.

However, if you find the right EDI Provider, who can handle all translations, all EDI mapping, all Partner configurations and all outbound and inbound communication with your partners, then you have nothing to worry about.

Our very own EDI2XML translation and integration services eliminate all of these complexities for you and you can begin trading electronically in no time. If you have your own in-house EDI and IT integration expert(s), then they can simply use our EDI2XML Web Service.

If you’re looking to meet your Trading Partner’s requirements but also keep your business processes streamlined and integrated internally, then check out EDI2XML. Our team of EDI experts are experienced and flexible enough to work with any EDI format, where specs are readily available, and convert to a format your team or system can work with. It’s about keeping costs low and simplifying the whole EDI communication process. Contact us today!

 

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EDI Communication Over The Years

This article went on to describe the beginnings of EDI in the business world and how far we’ve advanced with technology to simplify these B2B transactions with EDI2XML.  Read more

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