What is Electronic Data Interchange (EDI)?
For those already a bit familiar, skip ahead. Electronic Data Interchange, or EDI for short, is like a special language that helps businesses talk to each other through computers. Instead of sending paper forms or emails, companies use EDI to share important information quickly and without mistakes. Despite predictions of its demise for many years, the market is expected to grow, because businesses get a lot of value out of it. But that’s a story for another post.
Understanding EDI 846: The Digital Inventory Helper
EDI 846 is a special type of message that helps stores and suppliers share information about their products. Think of it as a digital way to check what items are in stock. When stores need to know if they can get more products, they use EDI 846 to ask their suppliers. The suppliers can then quickly tell them what’s available.
How EDI 846 Works
When you use EDI 846, you get important details like:
The exact date and time someone checked the inventory
Special numbers that identify the store and supplier
Product codes (like SKUs) that tell you exactly which items are being tracked
How many items are available
How the items are measured (like pieces, pounds, or boxes)
In food, beverage and medical products, it can also contain lot numbers
What Suppliers Share Back
Suppliers use EDI 846 to tell stores:
When they’ll get more items in stock
If they won’t sell certain items anymore
How many items they have in different warehouses
Real-World Uses of EDI 846
Online Stores
Online stores need to know if they have enough products to sell to customers. EDI 846 helps them check their stock and order more items before they run out. Drop shipping depends on knowing that you have stock, otherwise the store runs the risk of taking an order for something they can’t fill.
Regular Stores
Stores with physical locations use EDI 846 to keep their shelves full. When items start running low, they can quickly ask suppliers for more.
Warehouse Management
Big companies with many warehouses use EDI 846 to share information between different locations. If one warehouse is low on items, they can check if another warehouse has extra. They can then choose to balance stock across these to avoid higher shipping costs from one location.
Finding Good Suppliers
When stores look for new suppliers, they use EDI 846 to see if the suppliers usually have enough items in stock to meet their needs. Naturally, finding a supplier that even knows what an 846 is, sends the right signal to the store.
Why EDI 846 Makes Business Better
Better Accuracy
Since computers handle the information, there are fewer mistakes than when people write things down by hand. Rule of thumb: if Excel or Google Sheets is involved, you can almost be sure there was some manual data entry, which exposes the potential for human error.
Quick Updates
You can see right away how many items are available, across your supply chain, which helps make smart decisions fast.
Stronger Business Relationships
When stores and suppliers can share information quickly, they work better together.
Save Time and Money
No more counting items by hand or filling out paper forms – EDI 846 does the work automatically, and dovetails with warehouse best practices like periodic cycle counts.
Make Smart Choices
Take Mom’s advice and, “Make good decisions.” The information from EDI 846 helps businesses decide which suppliers to work with and when to order more items. Feeding your inventory data into other systems can help predict optimal stocking quantities and avoid running out of stock.
Important Things to Remember
Quick Responses Matter
When someone sends you an EDI 846 message, you should answer quickly. This might mean changing how you do some things in your business. The more you can automate the process, the better. Supply chain collaboration drives costs out for everyone.
Keep Good Records
For EDI 846 to work well, you need to know exactly how many items you have. It’s important to count carefully and keep good records. Where possible, use a warehouse management system (WMS) or an ERP with integrated WMS capabilities.
Technical Standards
EDI 846 follows special rules that make sure everyone uses it the same way. These rules:
Come from experts who know what businesses need
Work with different types of computer systems
Help different EDI messages work together properly
Expert Tips for Success with EDI 846
As someone who has helped many growing businesses use EDI, here are my top tips:
Start by using EDI 846 for your most important products first
Make sure your inventory counts are accurate before sending updates
Set up automatic alerts when stock gets low
Train your team to understand the advantages for everyone when using the EDI 846
Keep track of how EDI helps your business save time and money. This is a useful habit when asking for justifying additional investment operational efficiency
Remember, EDI 846 is more than just a way to check inventory – it’s a tool that can help your whole business run better. When used correctly, it makes everyone’s job easier, up and down the supply chain, and helps your business grow while containing costs.
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