Unleashing the Power of EDI Automation: Beyond the Basics

Electronic Data Interchange (EDI) may not be the most exciting topic, but its impact on retail and supply chain operations is transformative. This standardized digital language for business documents enables companies to exchange transaction information electronically, streamlining processes, improving accuracy, and reducing inventory issues. However, simply having an EDI solution doesn’t mean you’re maximizing its potential.

While EDI portals already reduce manual document processing time, without proper automation, staff may still spend considerable time transferring information between systems. When your EDI solution integrates with your WMS, IMS, ERP, accounting software, and carrier programs, you can dramatically reduce keystrokes and accelerate processes.

The key to success lies in prioritizing automation for the documents most critical to your business operations and the ones that obviate the most labor and reduce error potential with your retail trading partners. Here are seven essential EDI documents to integrate and automate:

Purchase Order – EDI 850

The purchase order communicates what items buyers request from sellers, including quantities, pricing, and shipping instructions. These documents secure products for shipment to distribution centers, warehouses, stores, or end consumers.

With integrated EDI, purchase orders flow directly into order management systems and route for picking. Without integration, staff must manually check for new orders and re-key information into ERP systems to initiate fulfillment processes.

Purchase Order Acknowledgment – EDI 855

After receiving a purchase order, sellers send acknowledgments to confirm receipt. With integrated EDI, supplier systems automatically generate these acknowledgments through workflows, eliminating manual review and response requirements.

The system can even compare inventory levels to inform buyers when insufficient stock exists to fulfill orders. This automation provides buyers with critical information to make informed decisions about how to proceed with their purchases.

(if you don’t use a 3PL, skip the next two)

Warehouse Shipping Order – EDI 940

The warehouse shipping order directs warehouse operations for order fulfillment and product shipment. This critical document instructs warehouse personnel about what to pick, pack, and ship to satisfy customer orders, including products, quantities, shipping methods, and special handling instructions.

When integrated, the EDI 940 automatically triggers warehouse management systems to create pick tickets and initiate the fulfillment process without manual intervention. This integration significantly reduces order processing time, minimizes errors from manual data entry, and improves warehouse throughput capacity. For businesses managing multiple distribution centers or using third-party logistics providers, automated 940 transactions ensure consistent execution across all locations.

Warehouse Shipping Advice – EDI 945

After warehouse personnel fulfill an order based on the 940, they respond with the warehouse shipping advice to confirm exactly what was shipped. The EDI 945 provides detailed information about what was actually picked, packed, and shipped, including any substitutions, short shipments, or other fulfillment variances.

When integrated with your systems, the 945 automatically updates inventory records, order status, and customer communications without manual reconciliation. This real-time visibility enables customer service teams to proactively address any discrepancies between what was ordered and what was shipped. For retailers and distributors, automated 945 processing ensures accurate inventory positions and improves order-to-cash cycle times by triggering invoicing processes based on actual shipments rather than orders.

Advance Shipping Notice – EDI 856

The advance shipping notice is sent from sellers after order shipment, containing crucial information like quantities, UPC codes, pallet counts, shipping addresses, and more. It also supports supply chain traceability with details on lot numbers, manufacturing locations, and expiration dates.

This document is particularly vital for businesses in drop shipping programs, where suppliers fulfill orders directly to consumers on behalf of retailers. The ASN relays delivery information to retailers, maintaining the illusion that orders came directly from them rather than third-party sellers.

Invoice – EDI 810

Invoices represent essential transactions between buyers and sellers, detailing item information, shipping requirements, and payment terms. Integrated EDI enables sellers to quickly request payment after product delivery, improving on-time payments and helping businesses capture available discounts.

Additionally, integrating both invoices and purchase orders automates the reconciliation process. The system automatically compares documents, flagging only mismatches for human review. This redirection of resources from processing accurate transactions allows focus on business growth initiatives.

Inventory Inquiry/Advice – EDI 846

This valuable document informs purchasers about the quantity of goods sellers have on hand and on order for future dates. Understanding available and pipeline inventory enables better forecasting and management of buying and selling needs.

The inventory inquiry document supports crucial modern retail processes including just-in-time inventory management, order-to-shelf systems, drop ship management, and omnichannel fulfillment models. Major marketplace and retail players like Amazon and Walmart now require sellers to regularly provide inventory information.

Accelerating Business Growth Through Integration

Implementing an EDI portal represents just the first step toward trading partner connectivity and compliance. Integrating EDI with your business systems and automating document management creates more efficient processes, faster fulfillment, better supplier scorecards, and reduced chargebacks.

The EDI documents highlighted here form the essential foundation for retail and supply chain businesses. By integrating and automating these EDI communications, you free valuable time, money, and resources that can be redirected toward business growth initiatives.

By moving beyond basic EDI implementation to full system integration and automation, your business can achieve the speed, accuracy, and efficiency required to thrive in today’s competitive retail environment. Ready to consider improving your business’ EDI operation? Schedule time with a Surpass EDI expert today to receive your free written assessment.