2.18 EDI Codes and Processes Explained 

 

[00:00:00] Danielle: We are really excited to have you all on this webinar today. today we're going to discuss EDI codes and processes. So let's get right into it. We got a lot of content to cover today. Before we start, we always like to introduce ourselves. My name is Danielle Gloy. I will be monitoring the chat today. 
 

And then leading our content is the awesome Peter Spaulding. just a little bit about us here at SupplierWiki. We create free educational content with the main goal of setting suppliers like you up for success. so just moving into the agenda, we are going to start off the webinar with a brief introduction to EDI. 
 

Then we will discuss some EDI setup in major retailers. so we're going to have a look at in house versus outsourced. What that looks like and what the benefits are and then we'll move into a more practical section on how to avoid common EDI errors and then ended off with EDI best practices at the way at the end of the webinar. 
 

We will be doing a live Q&A with Peter and myself. So send in your questions early. All right. So here are a few FAQs that we typically get during webinars. The first being, will we be getting a copy of the slide deck? Yes, we always send a copy of the slide deck in PDF, in PDF format, as well as the recording of this webinar. 
 

So that should appear in your email inbox in about three to four business days. If you go to our website, you can also find all of our past webinar recordings and a PDF of those slide decks available to download. And then the second question that we often get is, what is the best way to ask a question? 
 

So at the bottom of your screen, you'll see a chat tab, and then you're going to see a Q&A tab. So the chat tab is a great place to engage with the group or share any insights that you may have. and then the best way to submit a question is through that Q&A tab, as I'll be able to monitor them and then tee them up for Peter for the Q&A time at the end. 
 

Okay, so last thing second last thing before we get into the content Here at SupplierWiki we create free educational content with the main goal of setting suppliers like you up for success So we do this in a couple of different ways For example through webinars like this one that you're on today We have free ebooks that you can download and articles that you can read All of this is available on our website We also have a weekly newsletter that goes out so we usually put retailer updates So if you're looking for a quick read and just want to stay updated on the industry, I will send that link in the chat for you to sign up. 
 

Now, moving on to really just the last thing before we get into the content for today. I introduced you to SupplierWiki earlier. We are just a part within SupplyPike, SupplyPike is our platform, that helps suppliers get paid and get better. So this is done with a software that identifies, recovers, and prevents deductions and compliance issues. 
 

So we do this with a couple of different retailers like Walmart, Lowe's, Amazon. Broga, Target, Home Depot and CVS. This is just a list that keeps on growing. so if this is something you want to hear more of or explore for your company, I'll also go ahead and send a link in the chat. You can expect a lot of links coming your way. 
 

but in the meantime, I'm going to hand it over to Peter to talk about EDI. 
 

[00:03:36] Peter: Thanks so much, Danielle. I don't normally go by the amazing Peter Spaulding in the office. That's a new one. but we'll have to spread it around, make sure that everyone keeps calling me that I'll have to add it to my email signature, the amazing Peter Spaulding. 
 

wanted to shout out to, I think that this is actually a billion. Now we hit a billion dollars. I'm not sure if that's official, yet, or if this is a little bit, kind of old data. But yeah, I think we hit a billion. A lot of that is, a lot of that is our Walmart product, which is our, first kind of flagship product. 
 

But, but yeah, as Danielle mentioned, we're growing the number of retailers that we are in all of the time. We have a new team that is, looking into making a kind of more holistic deduction solution across, Tons of retailers. So that's a, a pretty exciting development that we're, looking into as well. 
 

But these are some of our partners. if you're on the call, then the odds are somewhat high that you might be, one of these. so welcome and if you're not, then hopefully you will be someday. and we're so glad you're here. So, we're gonna start with a very high level, EDI kind of. introduction, just in case, you know, you're, you're not in the EDI weeds every day, or if you're new to the industry, you're new to being a supplier, you've never really, read that much about EDI, you haven't looked into it too much, we'll cover the basics, and then we'll get into some of the more industry specific stuff. 
 

I mentioned Walmart already, I believe that this is a This is a, what we call like a retailer agnostic webinar where we'll be talking about really high level things across a bunch of different retailers, but there might be a little bit of a Walmart bias. like there isn't a lot of our stuff. So, just watch out for that. 
 

We'll be using Walmart as an example, for a number of, the conversations in here. So if you're in Walmart, hopefully it'll be extra helpful for you as well. So EDI, electronic data interchange, this is a very old. form of code essentially, from, I believe it was the seventies. and now it exists in a bunch of industries. 
 

It's not just a retail thing. but it is essential in retail and in supply chain. It really is the way that we, track data, the way that we track real physical shipments. across the supply chain. So, but yeah, it stands for electronic data interchange. and it's a cross company exchange of business transactions. 
 

it is a standard kind of document format for things like purchase orders, invoices, we'll get into all of that, but basically it's a way of making sure that our, that all of these companies are speaking the same language to each other as they go about the process of. of doing business. so it's a very kind of fundamental thing. 
 

It's like the fish swimming in water who don't know what water is. EDI is kind of the water of the supply chain industry. It's, it's the way that you do a lot of things, which is why I mentioned, you know, you could have been in the industry for a while and you've just never read anything about EDI. if you're not really in the weeds of it, you may be doing stuff with EDI and not even aware that it's EDI. 
 

If you have a really good provider who is, who is updating your EDI constantly for you or on your behalf. so, but either way, it's really good to educate yourself and to, to learn a little bit more about the, some of the mechanics of this process. Because they are connected to, the big things that we at SupplyPike. 
 

talk about and do the revenue loss and, and accounting as well. So, it is connected to the money just like everything else. so yeah, it's important to learn about that as well. but it's helpful to think of EDI as really just the facilitator of, the exchange of electronic documents. So anytime you're passing data, From one party to the next, most of the time, it's going to take the form of these standardized, document code types. 
 

so we'll get into what some of those are, I already mentioned some of these, but purchase orders, ASNs, and invoices, these I would say nine times out of 10, but it's probably more like 98 times out of 100 now, they're going to be, in EDI format. in some ways, well, we'll get into that later. 
 

I'm getting ahead of myself. I always get ahead of myself. Stick to the slides, Peter. okay. So, I mentioned, you know, 98 out of 100 times, we're going to be using EDI to do things like send invoices to a retailer, stuff like that. That's a, that's a newer development where really, if you want to be doing business in a major retailer, you have to have an EDI provider. 
 

That's basically. it's basically standard. It's basically required, for a lot of these retailers. There are some smaller suppliers. So we work with, one of the cool things about SupplyPike is that we get to work with a ton of different kinds of suppliers across a bunch of different categories. 
 

so we work with the smallest and we work with the biggest suppliers, which is helpful for me because that helps me get a, a really kind of broad range of the spectrum of, of suppliers. So I can be, we can work on creating content that is empathetic to a wide variety of people. so some smaller suppliers don't use EDI. 
 

They still don't. and that's, that's kind of, if you're below a certain threshold, then the major retailers will sometimes let you get away with it. but more and more what we're seeing, especially as things become automated. as technology is taking over the industry, we will see EDI probably become a requirement for major retailers like Walmart and Amazon in years to come if they aren't already. 
 

so some people might be sneaking by without it doing a somewhat more manual process. but most people are doing EDI, for all of these really essential business functions. So, It's a way of streamlining your process, especially for CPGs and major retailers. EDI is also in like hospitals. 
 

There are other industries that use it as well. but those codes are, they'll use different EDI codes, different documents. and it'll be a pretty different process from industry to industry. but yeah, we'll cover the main documents that you'll be using as a supplier and a major retailer. and, again, we've mentioned here that you can use it, to, reduce the manual re keying of data. 
 

I want to say reduce instead of eliminate, because one of our main talking points, one of my main talking points today is going to be that E. D. I. Is not a set it and quit it thing. It's something that you need to be working on pretty constantly. one of the things I've been working on lately is talking about, EDI versus APIs, which are, you know, basically apples and oranges. 
 

but there is a certain, extent to which EDI is now a more manual process than it was in the past. So what that means basically is like, as opposed to an API where a lot of data is moving around automatically without manual intervention, EDI does require, updating. so we'll talk a little bit about items, item setup. 
 

it's a heavily EDI to process. so, but it is less manual for sure. EDI is less manual than not having EDI. with EDI, you have a lot of the information kind of already, you have the structure filled out and you just have to fill in your specific data. data that is specific to your item, data that is specific to this purchase order or to this invoice. 
 

so it does reduce, manual, re keying in of data for sure, as opposed to the opposite, but it is not a completely automated process. Nothing is a completely automated process. Everything requires checking up and the best suppliers, best in class suppliers will, be really on top of that. it cuts, order processing costs. 
 

So, EDI, is, not very expensive. there aren't alternatives that are much cheaper, that remain as efficient. it ideally EDI, well, EDI compared to just going manually. a lot of the times we'll talk about this a little bit down the road too, but most of the time, whenever there's problems that are related to EDI, it's not the EDI itself, the codes are perfect. 
 

The code is not, is not the, is not the problem. Most of the time, it's the way that data was entered and, and the like, that's kind of what, where we see a lot of the like finds and stuff come from that are related to EDI. you can definitely improve cycle time. EDI is about. tracking the movement of goods, from one place to another, from one, seller to a different buyer, stuff like that. 
 

so, it definitely helps make that a much smoother process. and then you can help notify customers of shipping changes, much more efficiently than you would with a more manual process as well. So, EDI capability, again, we're talking about having an EDI provider or doing it in house. we'll also cover this in greater detail later as well. 
 

but basically, you know, a lot of major retailers are going to want to test your EDI capability before taking you on as a sales partner as kind of a contingency. So, basically, you know. What they want to know is can we send you an order in a really easy way where you can where you can scan it and your software can read what, what the, retailer is ordering, when they're ordering it in a really timely way. 
 

that's what EDI is for. So, and then, and then it kind of, adheres to certain standards as well, most of the time. And all of the biggest, all the big EDI providers out there, will be, experts on these standards. They will have very, elaborate and detailed, processes that they're constantly updating. 
 

but those, those, document codes themselves, won't change too much. So what most, suppliers do is they will outsource EDI. That's a very common practice, mostly because. EDI is a very developed technology. It's a really old code. so they, people will need, someone who's an expert in EDI to do that for them. 
 

Some retailers have partnered with EDI providers, which means basically that they'll be like, we don't just want you to have EDI. We want you to use this particular provider. and then what suppliers do is they choose to accept that provider or they'll say, we already have a partner that we're working with. 
 

Can you just make sure that they are, up to snuff up to your standards? and so the retailers, can be, somewhat flexible with that as well. But we're breaking it down here in terms of, in house and outsourced EDI management. some people do their own EDI. If you're, if you're a more kind of, tech friendly environment, if you have. 
 

people who have that experience, some suppliers have their own EDI management. and that's what we mean here by, in house. You've purchased software and you're operating it internally. so, again, some suppliers, especially big ones will have their partners that they want to be doing business with, and then, but what what we see most of the time is that there are large third party, outsourced E.D. I. Management programs and softwares, companies that have partnered with the retailer. or, companies that have partnered with a bunch of different suppliers. and, and then it's just a matter of making sure that that EDI is aligned with the retailer's expectations. so yeah, there's a bunch of different ways that it can happen. 
 

Again, one of the more common ways is, is a retailer will have a particular partner in mind, and they'll say, do you want to work with them or do you want to do something else entirely? And then we've got a little source down here for, creating an in house, EDI system. you can visit the Uniform Code Council, GS1 for resources. 
 

that will be, a helpful resource if that's something that you're planning on doing in house. So. we're gonna talk about some high level pros and cons for in house EDI. a lot of this I've kind of been touching on a little bit already. but the benefits of doing your own in house EDI is that you do have complete control over your, processes. 
 

and, the way that you're communicating with your trading partners. if you are a larger organization and you're in a bunch of different retailers, and all of those different retailers have different, EDI providers that they want you to work with, That could create a little bit of, rework if you want to think of it in those ways. 
 

You'll have individual teams for the retailers, and those teams have to learn how to work with each of those different EDI providers. whereas if you have your own, thing going on, then that's something that you could train everyone in your organization on kind of, collectively, to work together, for. 
 

You have the ability to add customizations. and this is, again, I would, I would think of this more in terms of like, it could be good to have everyone in your organization on the same page, as opposed to customizing the EDI itself, EDI is code. And the, and the point of EDI is to make sure that everyone's speaking the same language. 
 

So you won't be able to, send an invoice in your own code, in your own language to a retailer. The point is to make sure that it is, is, is the coded language that the retailer is expecting if you want to think of it in those terms. So, but you can customize things on your own side whenever you're doing in house EDI, you can also respond quickly to trading partner requests. 
 

if you're doing, your own, in house EDI as well. Now there's a caveat with that, which I've already mentioned, which is that. Just as long as the expectation from whoever is making those requests, is, is the, is aligned with your in house EDI. So, some of the cons is that, EDI is pretty difficult. 
 

it's kind of complicated. It's a difficult thing to learn how to do if what you're really just trying to do is to be a consumer packaged goods provider. You might not want to spend time, dealing with that. So it is complicated, and you will need a team of people to support an in house solution more often than not. 
 

Again, sometimes that team can be spread across a bunch of different teams. Where you've got an EDI person for each of the major retailers that you're working with, excuse me, but, for the most part, yeah, that's money that you're going to be spending, for that in house, EDI solution again, if you outsource it, you're going to be spending money there too, but so, whichever one's cheaper, I guess, staff, needs to stay up to date on EDI requirements and changes now again, the EDI code itself won't change that much, but a lot of things are changing. 
 

So. the, the document types themselves won't change the, document code numbers won't change to those have been the same since the eighties, since the seventies when it started, but there will be tiny updates, little things that will, that will have a ripple effect where you will need to kind of make sure everyone's up to date on those things as well. 
 

And then, your EDI solution needs to be constantly monitored and maintained. Right. Whereas if you're outsourcing it, you just need to make sure that you're communicating with them changes like. item setup or item maintenance changes. Those just have to be communicated with an outsourced partner. 
 

but, if you're doing it in house, then you've got to make those updates on your end as well, as you're going. So again, pretty high level, pretty straightforward, pros and cons stuff. but, yeah, let's get into the, outsourced, EDI here as well. So one of the benefits is, with outsourcing, anything is that you don't have to be as worried. 
 

You don't have to be monitoring things as much. so there's, there's something that you can. have someone else do instead of yourself so that you can focus on your business. that's a big plus. You don't want to have, a bunch of, time spent on, on technology if you don't have to. another one is that your EDI provider can handle, your trading partner's special requests. 
 

So basically you're having a third party there who's, who's filling you in on whenever their order changes, stuff like that. And then, EDI providers have teams of experts, so you don't need to know the ins and outs of all the, the, the technicalities behind EDI. Again, you're saving time by having someone else, who's dealt with, EDI for a long time, come in and, and, And make those more agile adjustments. 
 

Some of the cons, are that you need to be able to trust your provider with control over your EDI compliance. So. again, you know, some, some suppliers have their preferred partners. Some retailers have their preferred partners. if they've been working with people for a long time and they're just like, you know, these people really know what they're doing. 
 

We want to, we want to stick with them. so. we're, we're mentioning it as a con here, but it can be a, it can be a positive as well too, depending on, on who that partner is and how proactive they are, in communication. there's a cost of outsourcing, that can grow a lot, especially as your business is growing. 
 

so you are always going to want to pay attention to that and always have a finger on the pulse of the market to figure out, you know, can we save money by. doing this in house again, you know, is it cheaper to do it in house or to outsource it? I would say generally speaking right now, in the market, it's, it's cheaper to outsource. 
 

again, you're, you're, you're, you're handing it over to the experts, people who really know what they're doing. and so some of those people have made their pricing very competitive, and then you don't have to pay salaries, basically, or you're doing it in a different way. So, but, again, as a, as a, as a con for outsourcing EDI, we do want to mention that. 
 

as your business is growing, those EDI processes are going to become more complicated and you may see a price increases too. and then there's a managed service versus full service. so the extent of the service provided, that could be a con as well. and negotiating that with a partner too or a retailer. 
 

Okay. So when it comes to choosing an EDI provider, we just wanted to list out a couple of, helpful questions that you can ask just to make sure that you guys are all aligned on what you're actually looking for. So do they have a, a customer focused and responsive, customer service? Platform. So when it comes to EDI customer service is very important to these providers. 
 

So, they're going to be competing with each other to make sure that they are as. Proactive as possible and responsive as possible to whatever the needs are. So learning a lot about that before you sign off on an EDI provider is really important. If you're entering a new retailer and they have a, they have a provider that they want you to go with, that's a big thing to look into, you know, are, is this a provider going to have our best interests in mind? 
 

are they going to be responsive whenever we have questions, whenever we have to update an item or, or whatever it is? so, again, that's the first thing I think the most important thing. how are there, how are they ranked for that? How are they scored for that? How do other customers, talk about them? 
 

Another kind of related question to ask is what are the other partners that they're working with? do those companies trust them with their EDI operations? So, again, with a major retailer, if you're entering, into a partnership with them and they have a preferred partner, That's usually a pretty good sign. 
 

You know, the, the retailer is happy with, with what they're getting from the EDI team. so that's, that functions basically as a recommendation. You've got a customer who wants to buy your stuff, the retailer, and they really like a certain provider. Well, that's basically, yeah, that's basically a recommendation. 
 

now those aren't always, it's not always the best way to go. Again, you may have a partner of your own that you don't want to, you, you want to work on that relationship. You want to give them more of your business. again, your mileage will vary a lot with that. How quickly can they onboard new partners? 
 

That's a huge, part of the question. You know, with EDI, it's about creating efficiency. It's about documenting processes, but mostly it's about making the, the, ordering and invoicing process really smooth and painless. So can you get on board with us really quickly? or is that something that's going to take a long time? 
 

So, being aware of that as well is really important. Again, whenever you're considering a new partner, that's going to be a really important question. Can, their solution grow my business? Can it really? Can it really, help me focus on what I want to focus on? Again, it's fundamental to what EDI is and then what other tools can their software integrate with to help streamline your processes? 
 

So to use the example again of a retailer's preferred partner, you know, maybe that'll help save you a lot of time and, and streamline everything that you've got going with that retailer. And so maybe it's something to consider, for that particular retailer team, that particular branch of your organization, or your whole organization. 
 

So we mentioned this a little bit already, whenever we were talking about in house solutions, one of the barriers to doing your own in house solution potentially. is certification. If you're going to be selling, if you're going to be partnering with a major retailer, selling your products in them, they're going to want to make sure that your EDI is certified with AS2, or, you know, whatever, whatever the other kind of certification processes may be. 
 

AS2 stands for application standard two. and it's just a very, it's a really broad way of making sure that. Again, these EDIs are speaking the same language, they're updating things properly, and that it is efficient. So it's another way of, we could, we could, rephrase this as, it's another way of making sure that the EDI partner that you want to work with, is up to snuff, right? 
 

Are they AS2 certified? most of the major EDI providers, have AS2 certification. It would be kind of Unique if they didn't and you would really want to press into that. and, they head up the retailer, integration for suppliers as well. So, most of these, major retailers that we've listed out here, Walmart, Target, and Amazon, will require that. 
 

So, if they don't, that's curious as well. It's something else to kind of look into. Okay, let's get into the meat and potatoes. That's it for our introduction. now we're going to be focusing on, what are the actual document codes themselves? I've, I've mentioned a bunch of these already, but we'll do some deep dives into these specific document, types, these specific, code types. 
 

what they're for, and to try to understand better kind of the whole cycle. So big ones, POs are EDI 850 and we've listed 875 as well. I believe that's the grocery purchase order option. again, if you're in grocery as opposed to a CPG, you're going to have a bunch of processes that are really different. 
 

And, and with grocery as well, you know. efficiency and timing is everything, right? You have to make sure that it's in the store at the right time and that it's getting out of the store at the right time as well. Invoices, are EDI 810s. Again, there's different types of invoices as well. That is so fundamental to the whole process. 
 

It's, it's, the most important or one of the most important EDI codes that you would be, Working with as a supplier in a major retailer, there's application advice, which is basically editing a, I believe that is a, an ASN, which is a separate one over there that EDI 856. So we'll talk a lot about application advice and we'll look at an example in Walmart, or a few examples of, of how ASNs can go wrong, basically. 
 

and then functional acknowledgement, EDI 997, that's very important for. just making sure that these, that ASNs are received correctly. That's the, the main example that we'll use, but functional acknowledgement, I believe applies to a bunch of different, EDI codes as well. That's why it's such a high number up there. 
 

It's a late development. It's important to know, has this, has this ASN been received by the retailer? That's your proof document there, EDI 997. So I remember for a while at Walmart, there was a. A, squab defect, essentially a fine that you could get. that was titled ASN not downloaded, which was a very confusing way of for Walmart to say there's something wrong with this, the structure or the content of this particular ASN. 
 

And for that, you would use functional acknowledgement as a proof document that actually it was received. and it was readable, at least on some level. Now, Walmart has developed a much more elaborate ASN receiving process that has a bunch of different, application advice, EDI 824, subcodes, basically, that will tell you what exactly, does Walmart not like about this ASN. 
 

We'll, we'll cover that in, in great detail later on. But the functional acknowledgement is really important for stuff like that. We need to prove that this was actually received. We need to know that this was actually received. Well, that's what your EDI 997 is for. 
 

Advanced ship notices. We haven't bolded on this slide, but I believe we're going to do a whole slide on those. Those are essential to the supplier, situation. You need to not just be able to receive orders and send invoices, you have to also send notifications about the shipments as they're coming. it's a very helpful. 
 

Part of the process of making sure that the retailer is, is expectant of the shipment. so that's super important. You have debit and credit memos, remittance advice, pricing information, inventory inquiry. These are all done through EDI as well. So really. Whatever it is that you're communicating with a retailer, unless it's email that you're sending to a buyer or something like that, most of the time it's helpful if it's coded, it's helpful if it, if it is adhering to the EDI standards, then everything is documented. 
 

You're disputing can go a lot smoother too. there's a lot more that's kind of, Again, you know, beneficial with having a more EDI to process. I'm using EDI as a verb now, EDI, as certified English major moment. but I like it as a term to, to think, you know, how EDI does our system, how EDI does our business with this retailer? 
 

are there things that we could, use EDI for that? We're not already, or are there things that. The retailer is communicating to us through EDI, that we are not listening to. so that's another thing, another way of kind of thinking about it. pricing information is huge. Okay. purchase order, 850. 
 

These are, so fundamental to the whole industry. So these are the materials that are requested by the buyer. That's what your PO is. everyone knows this. We've got a lot of stuff on POs on SupplierWiki. you can check out as well. in this context, it's usually, the merchant at the retailer who is receiving the PO. 
 

Now, POs are, they can go both ways. POs do a lot. they're, they're lifting a lot of weight in the industry. But yeah, it's helpful to think of this as, you know, the retailer wants something. The retailer is wanting to replenish a certain item or a certain, thing. The retailer has an idea for how you can maximize sales in this quarter. 
 

we're gonna boost our order, quantity. or, or whatever it is you have, you have seasonal stuff, you have regular stuff. that's how the retailer is communicating that we've sold X amount. We want to replenish it. We're going to make a purchase order. so some of the stuff that is, is, that the purchase order contains. 
 

Again, this is, it looks really simple on the slide deck. We want it to look really simple, but these are really elaborate and complex documents. they contain the item description. So what is the, what is the item description for the thing that we're trying to replenish or the thing that we want to, buy more of or that we want to start buying? 
 

your UPC, your item or your case codes. Again, so, your item numbers. Sometimes there will be a retailer specific item number that they will want in there as well. but yeah, your universal code, they'll definitely want as well. Unit prices is huge. You know, if, if those aren't updated, in the purchase order, that's something that needs to be communicated to the retailer as well. 
 

This is the retailer's idea of what these prices are, right? So, make sure that your supplier agreement, you know, that, you guys are all aligned on that. That is huge. Pricing deductions are a huge, you know, devastating cost to, to, excuse me, larger providers. Larger suppliers and major retailers, your payment terms, discounts. 
 

Again, these are all kind of the same thing. These will all live in the supplier agreement. And so you want to make sure that those are updated and then the requested delivery dates are going to be in the purchase order too. Those are so important. We'll talk about timing. Making sure that you're staying compliant. 
 

all of that is, is super important as well. EDI is timing. It's, it's basically they're synonymous with each other. so, like the EDI 997, I mentioned functional acknowledgement. There's a bunch of different EDI codes for acknowledgement. EDI 997 will lift a lot of weight, not just for ASNs, but for other things as well, when it comes to purchase orders, though, there's the, EDI has its own code document for purchase order acknowledgement. 
 

And that again, just goes to show how important, how fundamental purchase orders are, how essential, they are in the whole EDI kind of cosmos. So, this is a transaction document that communicates the seller's acknowledgement of a buyer's purchase order. Now that doesn't necessarily mean that like. 
 

Everything is 100%. We're signing off on it. You will, you will have purchase orders that are edited on the supplier side, on the retailer side. But what you are saying with an EDI 855 is just, we got it, right? We, we, we accept that you have sent us a purchase order. so in the case of, vendor generated orders, this document can also be used as a notification of an order creation, which is, Somewhat confusing but again, it depends on how Developed your edi process is and it depends on how developed your your business processes with the retailer are Maybe you have this understanding amongst yourselves. 
 

But again, if that is the case, you're going to want to watch out for other kinds of miscommunication that could also result in fees or fines. so the outbound benefit of the EDI 855 is that the customer is more likely to buy knowing they will receive the correct quantity on time. Excuse me. So 
 

again, the centrality of EDI for understanding timing is, is super important. The inbound benefit is knowing promptly about short and late shipments. this allows for time, to demand better performance or find another vendor, right? So, if, again, if you have a supplier who is not EDI capable, And, you're sending a purchase order and not receiving EDI 855s.

What does that mean? Does that mean that they haven't received it? Does that mean that we should go with someone else? I'm not trying to make people paranoid. It kind of sounds like that a little bit. But again, how EDI does your process? Are you, are you sending these out whenever you get? 
 

You're sending them out automatically or are you wanting to have some kind of review process before sending them out. It's, it's just helpful for, for maintaining a healthy relationship with your customer, in this case, the retailer. Okay, EDI This is the fun stuff. This is where all of the money is actually moving around. 
 

So After you get a purchase order, you'll send the 855 confirming it, confirming that you've received it. And then from there you will send out an invoice. Now, one thing, we've got payment terms listed here as the bottom bullet point down there. What you're going to want is for complete, congruence in terms of pricing from the 8. 
 

50, the 8. 55, and the 8. 10, right? All along the way, you guys are going to want to be completely aligned on how much this stuff is actually worth. Is there an allowance that you're taking out of it? If so, you're going to want to get that in the invoice, otherwise you'll just be hit with the deductions and your bottom line will be smaller than what was expected. 
 

So it comes back to the supplier agreement. how much is, is this, is this, order actually going to cost the retailer? are you guys aligned on that? Is that all clear? So that's what the invoice the EDI 810 is really helpful for. EDI 810 is essential for understanding things like shortage deductions, which are so devastating to suppliers, just very costly over time. 
 

You're going to want to have access, through the EDI 810, and you're going to want to be able to find that essential information really easily, in the EDI document itself. So, again, having that EDI process is, is really beneficial. so the data in these documents varies widely depending on the goods and services being purchased. 
 

Again, EDI, we're talking about it in the context of one industry, but an EDI 810 is going to be used all over the place. Everywhere across a bunch of different industries, there are very specific things for, when you're selling to a, to a major retailer that you, that the EDI 810 is going to include. 
 

And that's what we've listed out here, but invoices are big. They're everywhere. And sometimes they're EDI sometimes they're not. so it's important to understand your industry's, 810s, your industry's invoices. So, in our particular context here, again, I'm going to list these out. We've got a couple of them bolded, but again, there's a ton of information in these, the invoice number that's super important for doing disputes. 
 

That's why we've bolded it here. you've got to have all of those, Numbered so that you can go back and you can find them whenever you're doing a dispute or whenever you and the retailer are just trying to get on the same page about, when an invoice was sent, what it was for, et cetera. so that's the, the identifier there for individual invoices. 
 

The date of the invoice, the invoice create date is super important as well. 
 

The services and items rendered is again, fundamental, depending on what you're selling. Yeah, you're going to need to know what you're selling. That's going to need to be enumerated there on the invoice in the 810. The date that the item is shipped out on, so again, this is assuming that your, 810 is Is, is working within the, the kind of proper timeline for the retailer. 
 

Now, retailers will react differently to this. We've put this here because, we believe that it's an essential part of the 810 sort of process that you would ship them out and that you would include that date in the invoice just so that the retailer knows you're not, jumping ahead there with that to say. 
 

Oh, you've ordered this. All right. We'll hit you with the invoice for it right away. No, they want, they want you to be, very regimented with your timing for all of that. So including that there is really helpful. And then the payment terms again, you know, with the supplier agreement, do you guys know how much, this stuff is worth is worth, by item or by order, et cetera. 
 

Okay, so the ASN. I'm glad that we have this. I was a little worried there, when it wasn't bolded on the last slide that, that we didn't have a slide on ASNs, but ASNs are so big in this industry. so we talked about, on the last slide, right, that you want to have a date shipment, a date of the shipment on your invoice that you're sending out to. 
 

So whenever you're sending, Shipments out as well. You're also going to want to send an eight, an eight 56, your ASN, just so that the retailer knows everything that's included in the, in a particular shipment, you know, it's helpful, for coming up with examples to think of purchase orders as being one for one with the actual shipments, but that's not always the case. 
 

So again, that's why we have EDI. That's why we have a way of, of communicating this. We've got, an order for a ton of stuff. It's all, it's going to go all over the country. those ASNs are going to be more specific with this particular shipment. What's on it? What's the manifest? when is it arriving again? 
 

That's key for OTIF, and for compliance, in major retailers. so this transaction document is, is very commonly used. you see it all over the industry. And so it's right there at the heart of all of those compliance policies and protocols. it's very helpful for, making a case for yourself if you're getting hit with OTIF fines that are not, that you believe are not, valid, right? 
 

These are essentially, these are essential to successfully communicating the contents of a shipment to a buyer, right? That's what this is really all about. So 
 

what's on these? Again, we bolded some of the things that we think are very important. carrier information. So. ASNs are very different whether you're collect or prepaid or, or, I'm forgetting what it's called, SLC. if you have another kind of special way of doing this, if you have a 3PL that you're working with, whatever, that carrier information needs to be in the ASN. 
 

Obviously, it's super important. One little kind of caveat. We talk about ASNs a lot. When are you supposed to send it out, right? The invoice is assuming the 810s. Again, we're assuming that you're sending that out after you have a date of shipment either in mind or it's already happened. That would be kind of ideal. 
 

Again, with the ASN, it's pretty tricky. Timing is essential. timing of the ASN, not just of the shipment, right? Obviously, you know, logistics needs to make sure that everything is arriving on the MABD, but your, the timing of your ASN is so big as well. We see a lot of shortages that are based on ASN timing. 
 

When are you sending it out? So it's very tricky. We always recommend to send it to send out the ASN as you're sending out the shipment. So if you were shipping the stuff yourself, right, you know, whenever it's going out, you can send the ASN then. If you're shipping collect and the retailer is coming to pick it up, we recommend, sending out the ASN then as well at the pickup time. 
 

Now, again, that's tricky. Your mileage is going to vary. Some people will have, strong opinions about this. if you send it too early, there's a chance that the retailer will, will hit you with a bunch of different fines for, you know, maybe you're overshipping, they'll say, because they haven't received the ASN. 
 

or it's a, a shortage in one place and an overage somewhere else. They'll give you a fine for not sending an ASN. Maybe you did, but it's just the timing wasn't up to the retailer standards, right? So, this is why, large CPG companies, organizations have teams of separate retailers. we don't like for teams to be siloed at SupplyPike, we like for everyone to be communicating with each other as much as they want. 
 

But again, you know, something like an ASN, the process for it could differ, it could change a little bit from retailer to retailer depending on what they're looking for. And that's why it is good to have those teams there, in place too. So, little bit of a caveat there. ASNs are huge. I love to talk about ASNs. 
 

and we have, some, some stuff on. Wow, Danielle has really been blowing up the chat. that's great. I didn't even ask her to. Normally I'll be just, you know, haranguing Danielle about, post this in the chat, post this in the chat. But, so I won't now. She's, she's way ahead of, she's way ahead of me. 
 

Thank you, Danielle. So check out those resources that she's put there. If you're interested in learning more about, about all of that, on the ASN as well, you're, you're also going to have a description of products and their respective quantities. That's huge. are you shipping in cases or each is and stuff like that? 
 

tracking numbers is really big, as well. Purchase order numbers is important for tying the shipment to the PO. again, you're not always going to have a one for one shipment to PO. it's pretty rare, especially as you get, larger and as you get, as you have a more kind of, sophisticated business with a particular retailer. 
 

so that's super important. which order is this actually, a response to? so that's, that's, essential information there as well. Barcodes for each container and carton, very helpful for compliance and then types of packaging used again. That's related to compliance as well at, At Walmart, we're talking about SQEP here. 
 

We're talking about the Supplier Quality Excellence Program. they have a bunch of rules and regulations around barcodes. they have a very long document that they update every year, around this time actually. alright, ASNs. talking a little bit about SQEP and, how important the 856 is for, compliance again in those, with those more sophisticated compliance programs, all of your different EDI processes are going to be more important. 
 

So there's that. Functional acknowledgement, another one of my favorites. You know, if you're, if you're in the business long enough, you'll start having favorite EDI code, document codes. that's what's happened to me, unfortunately, is I now have a little kind of, quirky interests in these documents. so EDI 997s are very kind of niche. 
 

they're, we developed them a lot in the, in our supplier quality excellence program, product that we developed for our Walmart customers. because again, it'll, it'll prove that the ASN has been received, which I think we're covering here next in a little bit. we're going to use that as an example, of how the EDI 997 is so important. 
 

but it's, it's helpful to think of this as a meta transaction and data interchange. You're acknowledging the acceptance of a different code. So again, that's why we have a really high code number here, 997. It's the highest one that I'm aware of. so that means it's kind of added on later. It's not something that was huge in the, in the 80s, let's just say. 
 

so. It's important for making sure that everything is tied up really nicely, with your ASNs. So here we go. Here's our example of ASN validation at Walmart. a great little graphic here that, that lives in retail link, which is the supplier hub. for Walmart, 
 

this flowchart is, is showing you the difference essentially between EDI 997s. Your functional acknowledgement and then your, eight 20 fours, which, I can't remember the actual name for it. It's like validation or something like that. So what is the difference between 9, 9 7 and 8 2 4 at Walmart? 
 

Basically it's about, the format of the A SN and the content of the a SN. That's a helpful way of really breaking it down. So what will happen is, the a SN is sent for all pos. That's the way, that's the language that they're using there. I would, I think it's more helpful for us and, for our purposes here to just think of the, this, on an individual ASN, basis, the, the supplier checks for 997 functional acknowledgment. 
 

That's Walmart saying, yep, we got it. 
 

Excuse me. 
 

So you can see ideally. You get that 997 acknowledgement, and then it will pass it on to the next phase. if it is, rejected, if you're not getting that, then there, there's issues with the formatting of the ASN. this is what the ASN not downloaded was trying to communicate back in the day. now it's a more, it's a more direct, there's more direct language about, the structure of this ASN is incorrect. 
 

So, The supplier would need to make, corrections to that ASN, based on the, the FA, based on the functional acknowledgement, and then you would resend that, hoping for that 997. Once that 997 comes through, however, you're not out of the woods, you still have to make sure that there aren't any 824 error messages. 
 

So on our next slide, we'll look at what some of those are. there's not just one that's saying, Hey, the content of this as SN isn't correct. there's a bunch , some, as with anything, right? Some are used more than others, just like with EDI. so, we'll look at some of those as well. But again, you know, in this case, hey, you didn't get one of these. 
 

You don't need to make corrections to your ASN and then re send it. we love it. We love everything about this ASN. We accept. so the ASN loads to a DC system with no errors. That's what we're looking for. And you've got, we've got our source listed up there. basically it lives in the Retail Link Academy. 
 

Which, excuse me, shout out, is, is just a really great, helpful, resource for suppliers. some articles are more helpful than others, but this is, is very helpful, I think, for, for imaging that whole process, this flowchart. Okay, we're gonna talk a little bit about, common EDI errors. I'm really long winded today, so I'm gonna try to wrap this up, before the top of the hour.

so, basically, EDI, because it's so fundamental to everything that's going on, If you're not doing it right, you can have a bunch of different fines and fees that are kind of associated with it, too. I already mentioned these, but it bears repeating that you can have missed orders. If you're not receiving those POs correctly, you could have a delayed payment, which could be costly. 
 

And of course, you know, damaged relationships with your customers and trading partners. Communication is key in all kinds of relationships. We know this, right? Communication is what makes the world go round. It's helpful to think of EDI as your business version of that. It is your, it is your couples counseling, therapy for, for the retail industry. 
 

That's, my, metaphor came up that off the top of the head. okay. So, we've talked about this in great detail, but this could be a great slide for you guys to just have on hand. if you're training people, to, to conceptualize the flow, the, the flow chart of EDI. in the industry, this is the most common, use of EDI in the retail industry. 
 

We're talking about orders, invoices, ASNs. this is how it goes. You get, the PO from the retailer and then you send out an invoice, and your a SN to the retailer. Hopefully you're sending out that po functional acknowledgement as well, that 8 55, in that process as well. So once it's ready to go, you're sending out that a SN and that invoice. 
 

if you're prepaid, the vendor will send a trade docs to the three PLS and logistics teams. if not, again, it's just about, making sure that your product is ready to get picked up by the retailer. the retailer can send credit or debit adjustments. Again. are we talking about pricing? Are we talking about the order changing, whatever it is? 
 

those adjustments will be really important, in that part of the process, too. And then, the retailer can send a memo that includes basic remittance details as well, of course. And then, the retailer will notify a vendor of errors throughout the process. That's Something that we're going to see, a lot of as well, the retailer wants to hold you accountable. 
 

So common chargebacks related to EDI. again, EDI is everywhere. So every chargeback is kind of related to EDI. But the things that we see, you know, if, if we have a set it and quit it, mentality when it comes to EDI, you can see. A bunch of these chargebacks sort of cropping up a lot of these are related to just not having EDI that is updated a good relationship with your EDI partner or something of the sort. 
 

So short shipping again, that's the most costly that we see across the industry in terms of revenue loss. short shipping is devastating. It's also, a lot of the times it can be invalid. So short shipping doesn't necessarily mean that. or the, the preponderance of short shipping deductions doesn't necessarily mean that suppliers aren't sending enough stuff. 
 

a lot of the times what it means is just that there's, miscommunication that's happening. So there's a big kind of opportunity to win revenue back, in the short shipping space, which is what our product supply pack is all about. So, hopefully you are a current customer. If you're not, you know, and you're curious about that, you want to, save money on invalid short shipping deductions, then sign up for a demo because it's really. 
 

Super great with that amongst other things as well. pricing discrepancies is huge because all of that is being communicated through EDI as well. invoice errors, which is kind of sometimes there's overlap between those three. right. And then, ASN notification errors, which are big, especially big in Walmart right now. 
 

So that's why we'll talk about that a little bit too. You can have incorrect information or missing or late ASNs. Late ASNs are big. so timing again is key. So here are the related EDI documents for these chargebacks. I've been mentioning this a little bit as we go along, but again, a really helpful slide, for educating people, for training your teams, purchase orders, ASNs, invoices, those are all key for understanding short shipping deductions and for disputing them. 
 

the, those you're going to need as well as shipping documents. you're going to need those invite by shipping documents. What I mean is B. O. L. S. R. P. O. D. S. which are really the linchpin in disputing short shipping deductions and then, for pricing discrepancies again, same ones, except we've added in the E.D. I. 879 there. 
 

The pricing information for invoice errors, functional acknowledgement is really important as well as obviously the invoice there and then, for errors. Again, 856, obviously, we're going to include there, but the PO as well. Okay, Errors and Application Advice. So what this is, somewhat kind of confusingly, titled, Document Code and Application Advice. 
 

But basically, this is about The content as opposed to the structure of the ASN. We're going to look at an example in Walmart here. but yeah, it's, it's important to understand these ASN, changes and errors. what they look like, what they might be, and if you're noticing any patterns in yours. So these are what the EDI 824s are in our industry, in the retail industry. 
 

So, it's helpful to think of, these errors, as belonging to two possible levels. and this is language from Walmart, but I believe it applies to other retailers as well. there's warn and then there's error. So the warn is basically the retailer saying we can work with this ASN. This ASN is not, dysfunctional. 
 

We can work with it. We accept it, but we're not happy about it. So, This means that Walmart can still utilize the ASN data, but correcting warnings and resending the ASN is still a best practice. and strongly recommended by the retailer. Again, we're talking about Walmart, but, this language I believe applies to others too. 
 

And then error, this is more serious. This is where the application advice really comes in. This is Walmart saying, we don't really acknowledge this ASN. There's something wrong, with the content of it. so we're rejecting this and we want you to change it. those need to be corrected in a really timely way and resent, again, or else you might see more of those, chargebacks and deductions. 
 

So here, and again, this is a, this is just a screenshot from the source itself. so we recommend if you're in Walmart, go to Retail Link Academy. And, and check this out. you, you're probably familiar with this if you spend time in the ASN dashboard application in RetailLink. that's where you can follow up on all of this. 
 

but yeah, you'll see what are our most common, 824s. what are they looking like? What are the changes that we need to make in our organization in order to, to mitigate, these charges? So, this is helpful for, helping suppliers pinpoint those particular, errors, in their a SN processes, or at least errors according to the retailer. 
 

Again, you know, they're, they're making the rules. So some best practices. This is more kind of item related stuff. item setup is, is really important item setup. You can really screw yourself over for a long time with a retailer. if your item setup is not perfectly accurate from the very beginning. 
 

So I can't emphasize the importance of this enough. This is related to EDI, but it's really just a. A industry wide best practice. If your item set up is good, you can save so much money, in, in, in charges and fines and fees, compliance stuff, all of that. So we're really, we really want to harp on that today. 
 

item set up, is done through the retailer. but again, just like with everything else, your EDI provider is going to be, scraping that data and then, and then shooting it along as well. You'll be doing it through EDI most of the time. so having those items described perfectly, will help in your, in avoiding those fines. 
 

It'll also help in just sales, especially if you're doing. com, item setup and, you know, rich media, having the right images in there. That's super important. We all do online shopping. We all, not all of us use the Walmart app, but, you know, probably a lot of us do. And, so, you know, firsthand how important, those images are for, for sales. 
 

for invoicing as well, the invoice, you know, you're going to want there to be that congruence from the PO, to the invoice, to the ASN about what that pricing is. otherwise there are going to be all kinds of deductions. So what we see is a lot of with allowance deductions, we see a lot of suppliers charging for basically the, the market price or the kind of agreed upon price without taking the allowance deduction out of the invoice. 
 

A great best practice is to do that yourself, then you can be aware of, if there is an invalid allowance deduction, right? Because no, we already took the allowance out of our pricing on our invoice and we can prove it with our invoice. So this is the pricing that we agreed on in the supplier agreement. 
 

this is what we expect you to actually pay. We don't want you to pay less than that. So some suppliers will just let the retailers take those allowance deductions out, of their payments instead of applying them on the invoice. And that just gives you a little bit less visibility into that whole revenue process. 
 

So that's something we highly recommend. It's something we're big fans of at SupplyPike. is that a part of the. process. also want to call out, if the invoicing does not match the retailer expectations for cases and each is there are likely to be fines too. And a lot of money can be lost there too. 
 

Okay. So, ship type expectation, this is also something that it's really good to have, congruence on. So, if the retailer is, expecting something other than prepaid or collect that stuff, isn't going to get to the retailer, right? So that is related to EDI as well. You have to update your EDI provider on changes for shipping types as well. 
 

So it may be difficult to get BOLs. that are relevant to a particular dispute case, if that, if there isn't congruence between the supplier, the EDI provider and the retailer on what kinds of shipments are actually happening, it sounds crazy, but it happens. this, this happens in the real world. I was just talking to, a coworker in customer success about this recently. 
 

So, it happens, it's out there. best practices for talking with your EDI provider. This is something, you know, again, we don't want to, we don't want to tell you how to, how to do your business. And it sounds kind of like, common sense. It sounds like we're stating the obvious, but just like your relationship with your, retailer. 
 

You're going to want to have a lot of, a lot of good communication happening with your EDI provider all of the time. but one thing that we highly recommend when talking with your EDI provider and when asking for clarification from a retailer is if you can have as targeted a conversation as possible, you are so much more likely to get that feedback promptly. 
 

and the exact information that you're looking for. So many times we talk past each other. one, maybe we're just trying to be polite. Maybe we're trying to, to, to work on our relationship in a different way. but those targeted conversations are really great for making sure that there's efficiency, between you and your EDI provider when it comes to communication. 
 

They're a business like anyone else. They have a lot of customers that they're responding to. So the more detail you can provide, explaining exactly the amount of time and dollars that are being lost on these transaction, issues. That's so helpful to the EDI provider because then they can escalate, then they can know, you know, what, how serious is this situation. 
 

So that's again, more advice that we have from people who've been working in EDI for a long time. for that as well. And then some more general best practices, take note of all the required transactions to avoid missing data errors. Of course, use suggested transaction sets to promote transparency. 
 

That's what EDI is all about. And then, again, we're always harping on knowing the retailer policies on SupplierWiki. That's what we're here to do. but most of the time we're just trying to point people in the right direction. and then, create a protocol to ensure that compliance as well. You want to automate protocols as much as possible, again, without, without skipping any steps. 
 

If you can automate things, then that's always going to help. and customize it for the brand or retailer, specifically, or whoever your customer is. And then if a chargeback happens, instead of just, correcting the error with new information, try to find the root cause, and, and again, hold the retailer accountable, for those to make sure that the, charges are valid as well. 
 

Okay, sorry, I've gone a little bit over. I am so talky today. I think we have a question. 
 

[01:06:02] Danielle: Yes, thank you so much for going through all of that content. There is a lot to talk about with EDI. we had a question come in from Anisha. We are looking for third party EDI provider. If you can recommend we are a diamond and jewelry company. 
 

[01:06:18] Peter: Well, we certainly can. So we, for those of you who aren't following SupplyPike news, all the time, we've been acquired by an EDI provider, SPS commerce, who, is a partner with a lot of retailers. we, highly recommend SPS commerce. We've done a lot of work with them and we've been able to meet a lot of them as well, which is, which is great to me because it helps me make sure that content on, on things like this webinar are. 
 

Really up to snuff and really communicating, the heart of their vision, you know, to create this congruence. I've been talking about between all these parties. We highly recommend SPS commerce. They're great. But yeah, definitely. Like we mentioned on previous slides. look around, shop around, we believe SPS Commerce is the best and we trust your research process for that to kind of, show itself but, yeah, find the best solution for you. 
 

[01:07:17] Danielle: Yes, I have added the link, to their 3PL EDI solution so you can, begin your research there. Hopefully that will help. It looks like we didn't have any further questions come through. I'll give it just a little bit more time, and call out our resources. if you're looking for more hands on material that you can just look back to, we have multiple eBooks that cover a variety of topics. 
 

we also have them for different retailers. Up here are some of our Walmart specific resources. We actually just, just published, our Latest ebook which is how to pull reports in scintilla. So if you're walmart focused I'm going to drop that link in the chat. It may be helpful for you. Okay It looks like we didn't have any further questions. 
 

Oh, I see one from isabel. Where can we sign up for that demo for fines? 
 

[01:08:08] Peter: Yeah. So, if you could send a link to the, demo page, Danielle, we have, we have a team of, of people who are, excited to talk with you about, your, deductions, solution and to see if SupplyPike is a good fit for you. 
 

that's what we do at SupplyPike is we're, we're the deductions people. So, I think, you could send that. To as well. I see another question coming through. Can we get a copy of these slides we had in the webinar? Yes, absolutely. Monisha. We will be sending out. a copy of the slide deck as well as this recording. 
 

So if you wanted to just send the recording to a teammate, or the slide deck to a teammate as well, we'll be doing that in the next three to four business days. So stay tuned for that. so if you weren't taking super careful notes, that's okay. you can do that later or just kind of keep the slide deck on hand too. 
 

[01:09:05] Danielle: Thank you, Peter. Thank you, everybody. if you think of a question later, please feel free to reach out to us. Our emails are up there on the slide. but that is all that we have for you today. Hope you all have a wonderful day.