The EDI 856 is a prime example of how businesses can improve operational efficiency by adopting EDI systems. Thanks to EDI 856 messages, trading partners can easily communicate their needs with each other and enhance the speed and reliability of their business transactions.
What is an EDI 856 document?
Also referred to as an advance shipping notice (ASN), an EDI 856 is one of the most frequently implemented electronic data interchange (EDI) documents. The main goal of advance shipping notice EDI is to notify the receiving party of a shipment.
An EDI 856 file must be sent in a specific timeframe before the arrival of a product at a distribution center or store. Due to this, it can be used by trading partners to effectively manage their labor and transportation equipment before receiving a shipment. EDI 856 files are typically used in the retail, manufacturing, and automotive industries to respond to an EDI 850, EDI 830, or EDI 862 document.
What is included in an EDI 856?
An EDI 856 transaction set includes comprehensive details of shipments, such as carrier information, the contents of shipping containers, and the type of packaging in use.
The documentation found in EDI 856 documentation includes:
- The shipment number
- The shipping date
- The expected delivery date
- The shipping addresses of the sending and receiving parties and relevant information about them
- The purchase order number
- Item details and quantities
- Shipment tracking details like the PRO Number, BOL Number, or tracking number
- Item tracking details, such as serial number or lot numbers
- Packaging details, including items per carton and carton per pallet
- UCC128/GS1 Numbers
How does the exchange work?
An EDI 856 document is issued when a seller prepares a buyer’s shipment. An EDI 856 notifies the buying partner of the movement of the product and includes essential shipping details. In today’s globalized markets, the implementation of EDI 856 has become a vital shipment requirement.
One of two outcomes may happen depending on the seller’s supply chain operations:
- A warehouse order is generated if the product is located at a warehouse. Usually, the warehouse will send two EDI documents: an EDI 945 containing the shipment details to the seller and an EDI 856 to the buyer. The EDI 856 file will provide the buyer with product information, order details, and shipping information.
- If there is no warehouse, the seller will generate an EDI 856 and send it to the buyer directly. The manufacturer must understand the buyer’s specific shipment requirements before sending the shipment.
Upon receipt of the EDI inbound advanced ship notice, the buyer typically sends the seller an EDI 997 to acknowledge that it has been notified of the incoming physical shipment. The EDI 856 document type is widely used among suppliers, distributors, manufacturers, and retailers across many industries.
EDI documentation related to an EDI 856 file includes:
- EDI 810 – Invoice: This document is a replacement for paper-based invoices
- EDI 830 – Planning Schedule with Release Capability: This is a planning schedule presented in an electronic format and is commonly sent by customers to suppliers
- EDI 850 – Purchase order: Buyers can use an EDI 850 to notify a seller of the items they wish to order
- EDI 855 – Purchase Order Acknowledgment: Sellers use an EDI 855 to confirm they can fulfill the requirements of a purchase order
- EDI 860 – Purchase Order Change Request: Buyers can use this EDI document to request an update to the details of an existing purchase order
- EDI 862 – Shipping Schedule: This includes the actual shipment requirements forecasted by an EDI 830 document
- EDI 875 – Grocery Products Purchase Order: Grocery retailers and wholesalers can use this document to specify which items they wish to order
- EDI 880 – Grocery Products Invoice: Grocery retailers and wholesalers use this EDI document instead of EDI 810 when issuing electronic invoices
- EDI 940 – Warehouse Shipping Order: This document authorizes a shipment of items from a warehouse.
- EDI 945 – Warehouse Shipping Advice: This notifies a trading partner of a shipment
- EDI 997 – Functional Acknowledgment: This EDI document confirms the receipt of an EDI 856 message
What are the benefits of EDI 856?
The implementation of EDI 856 messages is beneficial to both sellers and buyers. EDI 856 allows trading partners to have a quick and reliable communication method, increasing the speed at which business is made. For buyers, EDI 856 provides an efficient way to track inbound inventory. By leveraging EDI 856 information, they can plan their operations with substantial knowledge about upcoming deliveries. Advances shipping notices also help buyers automate the logistics of the receiving process, allowing for faster business deals.
The cost-effectiveness of EDI
Every aspect of the document exchange can be optimized via EDI, from checking the barcoding of shipments to storing business-critical information. From a financial viewpoint, EDI improves transaction speed and visibility while decreasing the number of manual processes a business must undergo to trade.
All expenses associated with paper, including printing, copying, storage, postage, and document retrieval, are made obsolete by EDI. In addition, errors caused by incorrect information or lost orders are eliminated, making business more effective and lucrative.
Improving speed and accuracy
The implementation of EDI messages can drastically speed up business cycles. Exchange transactions that could take days or weeks to accomplish can be done in mere minutes. Thanks to EDI solutions, inspection processes, and optimization analysis operations are considerably simplified. An analysis made at the item level, the pack level, or the shipment level becomes much more straightforward by leveraging EDI 856 data.
Likewise, the data quality found in EDI 856 documents is vastly superior to paper documents, faxes, and emails. While the contents of other communication methods are prone to human error and easy to tamper with, EDI is automatically filled by computers and encrypted, providing an extra layer of safety and efficiency.
EDI messages automate the data exchange between applications across the supply chain. Not only does this mean that business-critical data is always delivered on time, but it also gives businesses complete visibility of their data. This includes less reworking of orders, fewer stockouts, and more occasional canceled orders.
Moreover, EDI allows businesses to do more with less. By having an integrated view of their available and incoming stock plus access to a shorter order processing and delivery process, companies can reduce their inventory levels to the most convenient numbers.
Drawbacks of using EDI 856
EDI 856 documentation offers many benefits to retailers and suppliers but has shortcomings. While it is highly advantageous to work with a trading partner who already manages their trading operations using EDI, the same can’t be said when trying to communicate with the business system of a company that doesn’t.
If a potential trading partner doesn’t have an EDI software solution implemented in their systems, EDI 856 files will have no utility. The information found in EDI documents is encrypted to make them safe, but at the same time, that makes it so they can’t be sent or received via email or similar communication methods.
If you’re looking forward to doing business with a new brand yet to implement EDI, you’ll have to wait until they start using it. However, EDI is standard in the retail industry, giving all companies an incentive to push forward with its implementation.
Another potential drawback of EDI is the time and money it takes to get it running smoothly. The EDI developer market is substantially limited, making it hard for new businesses to find an accomplished EDI developer at affordable prices.
Nonetheless, a Web EDI solution provides companies big and small with a quick and cost-effective method of implementing EDI. Instead of dealing with a lengthy and costly initial deployment, Web EDI allows organizations to access EDI services using the same tools they would use to view their email inbox.
How is an EDI 856 used?
An EDI 856 document provides a detailed description of the contents and configuration of an upcoming shipment. This document offers suppliers and their partners an efficient method to transfer information.
EDI 856 format
An EDI 856 document consists of standardized sequences of data known as segments. In contrast to other EDI files, such as EDI 850, EDI 856 files have a hierarchical structure. An EDI 856 file is a complicated document but can become easier to understand once the hierarchy it obeys is understood.
A transaction set identifier code can distinguish EDI 856 files. This code can be found in the first element of the ST segment. While this is common in several other EDI files, EDI 856 documents also possess Hierarchical Level segments, denoted by an HL segment header. Every Hierarchical Level loop has its own segment identifier, which can be found in the first line of the loop. HL loops influence the hierarchy you see in the file.
The contents of HL loops include:
- Shipment Information (S): This segment contains the shipment’s routing information. Here one can find its destination as well as associated carrier information.
- Order (O): An Order HL loop displays the order associated with the shipment. A PRF identifier can be found in this loop. The purpose of the PRF identifier is to refer to the purchase order number the order is associated with.
- Pack (P): This HL loop denotes the package in the shipment containing the items. The Carrier Package ID can be recognized by the CP identifier. This information is helpful to cross-reference packages in orders upon receipt by a trading partner.
- Item (I): The Item HL loop can be used to identify the products present in every package. For example, products could be determined by a UPC code. A brief description of products can be found on the Product Description/Item Description segment identifier, referred to as PID.
EDI 856 specification
The EDI 856 specification is regulated by the American National Standards Institute (ANSI). The ANSI Accredited Standards Committee (ASC) X12 is North America’s industry standard for EDI documentation. X12 members represent businesses, non-profit organizations, and government organizations.
The ANSI X12 EDI format allows trading partners to share electronic documents seamlessly in the North American continent. Outside North America, the United Nations rules for Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT) is the standard. Nonetheless, both systems use the same message structure and are only differentiated by their terminologies.
Leveraging an effective EDI system can be simple, inexpensive, and simple. With Vantree’s Web EDI, companies of all types and sizes can be empowered to improve their business operations with a practical and easy-to-use EDI solution.
Vantree’s Web EDI allows businesses to send and receive any type of EDI document regardless of the industry they operate in. This way, companies can use automation to increase efficiency and gain access to new business opportunities.