Today's highly globalized supply chain ecosystem has made it critical for trading partners to maintain advanced levels of communication throughout the product lifecycle. Seamless information flow from suppliers to distributors and retailers is essential to optimize supply chain visibility and manage inventory levels efficiently without compromising customer satisfaction.
Effective communication in the supply chain requires suppliers and buyers to exchange several documents, often via EDI. However, none is as essential as the advance shipping notice.
This post discusses the purpose, usage, benefits, and common issues of using EDI 856 advance ship notice in logistics.
What is an Advance Ship Notice?
An advance shipping notice (ASN) is a document sent from the supplier to the customer that provides details about an upcoming shipment. For example, the notice describes the shipped items, the carrier handling the order, the shipping date, and in some cases, the estimated time of arrival. The receiver can plan for incoming shipments and automate receiving workflows with this information.
Many major distributors and retailers require suppliers to send ASNs before the shipment arrives at their premises. Sellers can also utilize ASNs for drop-shipping programs to give their eCommerce partners timely information on when customers will receive the products.
As the most prevalent mode of exchanging data and documents in logistics, EDI (Electronic Data Interchange) is the top choice for conveying ASNs. The EDI transaction for ASN is EDI 856, which follows the x12 format defined by the American National Standards Institute (ANSI). Enterprises using the EDIFACT standard utilize the DESADV (Dispatch Advice Message), an EDI 856 equivalent.
The Benefits of using ASN 856
All trading partners benefit from implementing EDI 856 Advance Ship Notice. By using ASNs to inform buyers of their incoming consignment, suppliers help accelerate product delivery, resulting in shorter order-to-cash cycles.
Meanwhile, retailers and distributors benefit from increased visibility into the goods delivery process. As a result, they can optimize resources in advance and reduce receiving costs.
Below are some of the most compelling EDI 856 benefits to the stakeholders involved.
Benefits for Retailers and Distributors
- Lower costs of receiving goods: By providing information on upcoming shipments, ASNs enable businesses to forecast their workload better, resulting in lower labor costs.
- Reduced inventory holding: With advanced knowledge of upcoming shipments, businesses can better manage their inventory levels and reduce the need for safety stock.
- Faster, more accurate receiving of goods: ASNs provide accurate and up-to-date information on what products to expect, when they will arrive, and the quantities to expect. As a result, businesses can process shipments more efficiently and minimize errors.
- Enhanced customer service: ASN information reduces delays in receiving and processing inbound shipments. Therefore, inventory is availed faster, resulting in quicker order fulfillment and better customer service.
- Increased visibility into the supply chain: Businesses can gain insights into their suppliers' shipping patterns and performance by tracking ASN information. They can then use this data to optimize the supply chain and improve relationships with suppliers.
Benefits for Suppliers
- Shorter order to cash cycles: ASNs provide buyers with the information needed to expedite the receiving process. Therefore, suppliers fulfill and invoice orders sooner, resulting in shorter order-to-cash cycles.
- Faster product delivery: ASNs enable suppliers to plan their production and shipping schedules accurately, accelerating delivery.
- Improved customer service: By providing advanced information on shipments, suppliers keep their customers informed of the status of their orders and expected delivery times, resulting in higher satisfaction levels.
- Effective claims management: Advance shipping notices help reduce errors in the receiving process, resulting in fewer claims. ASN 856 can also serve as evidence supporting a supplier in the event of a dispute.
What Data is Included in the Advance Shipping Notice?
ASN 856 contains all the information needed by the buyer to prepare for the arrival of goods.
General ASN Data
ASNs typically include general data, such as the supplier's name and address, receiver's name and address, shipping and delivery dates, purchase order number, and specific information on the shipped products, such as SKU numbers, descriptions, quantities, and units of measure.
An ASN may also have additional information such as freight terms, tracking numbers, service levels, and other identifiers specific to the consignment.
ASN Data by Fulfillment Model
Besides general data, ASN 856 also carries data specific to the fulfillment model utilized: cross-dock, direct-to-store, or drop-shipping.
ASN for cross-dock shipments
In the cross-dock fulfillment model, the ASN 856 contains the end-point locations for shipments to a distribution center. Barcode labels are typically utilized to assist with product flows through the distribution center, eliminating the need for manual picking and put-away operations.
The specific data elements for distribution center ASN are:
- Mark for locations:
- Packaging structure (SOTI, SOPI, or SOTPI)
- GSI-128 numbers corresponding to the physical barcode labels
ASN for direct-to-store delivery
The direct-to-store ASN provides retailers with a reliable means for automating their warehouse receiving processes. The primary data elements for this ASN include:
- Packaging structure (SOTI, SOPI, or SOTPI)
- GSI-128 numbers corresponding to the physical barcode labels
ASN for drop-shipping
Drop-shipping operations can leverage EDI 856 ASN to facilitate the confirmation of items shipped to the end customer. The ASN provides visibility to the order's shipping status and tracking information, enabling the merchant to manage customer expectations proactively.
The data elements specific to drop-ship ASN include:
- Customer order number
- Small package carrier tracking number
Common issues when using EDI 856
Implementing ASN can help your business improve efficiencies and optimize the supply chain in unprecedented ways. However, EDI 856 also comes with several potential hurdles, which you must address effectively to ensure a smooth process.
Some of these issues include:
- Barcode-ASN mismatch: Discrepancies between barcodes and the ASN can cause issues with receiving inventory, forcing the receiver to sort packages manually. Manual receiving increases labor costs and the potential for chargebacks or penalties due to inaccuracies.
- ASN data accuracy: Inaccurate ASN data often leads to delays, lost productivity, and poor customer service. It is critical to validate data accuracy to avoid misalignment and subsequent penalties.
- Late ASN arrival: Trading partners typically require an ASN to precede the shipment. ASNs that arrive too close to the load may not allow enough time for the receiving process, resulting in delays. Understanding your partners' ASN requirements will help avoid delays in receiving goods and protect your business relationships.
- Staff training: Implementing ASN 856 can be challenging, and proper staff training is essential to ensure a smooth transition. Employees need to understand how to read an ASN, identify discrepancies, and know when to escalate issues.
Remedi Can Help You Automate ASN 856 with Modernized EDI
As one of the most crucial EDI transactions, EDI 856 ASN plays a critical role in streamlining supply chain operations. So, as a business, it is essential to have the systems required to send and receive ASN documents. A modern EDI solution can automate EDI 856 ASN document processing, dramatically improving speed, efficiency, and accuracy.
Remedi has been at the forefront of the EDI services market for years, providing advanced solutions that enable businesses to automate B2B transactions and improve end-to-end visibility. We work with top EDI systems providers, including Cleo, IBM, and Microsoft, to deploy solutions that streamline the creation, sending, and receiving of ASNs for optimum visibility and integration.
Contact a Remedi expert today, and let's help you automate ASN with modernized EDI.
