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Understanding the Basics of EDI

EDI 846

Inventory Inquiry/Advice

Understanding the Basics of EDI

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What is EDI 846?

The purpose of an EDI 846 Inventory Inquiry/Advice is to produce an electronic version of an inventory update. Historically, paper inventory updates were needed to request a change in stock. The changes would need to be entered manually, which would often lead to manual data entry errors. Using an EDI 846, trading partners can effectively communicate on inventory levels of specific products. The transmission of EDI 846 has become much more frequent with the increase of drop shipping and e-commerce, which requires up-to-the-minute inventory updates, though it can also be communicated routinely, daily, or weekly.

What Does an EDI 846 Contain?

When trading partners need to communicate regarding inventory stock, an EDI 846 provides all necessary information often required for an inquiry. An EDI 846 typically will include the following:

  • Current inventory amount
  • Committed inventory
  • The quantity of product currently on order
  • The quantity of product on backorder
  • The quantity of inventory in transit
  • Pending returns of products

Sending and Receiving an EDI 846

Sending and receiving an EDI 846 is consistent with any other communication within an EDI environment. An inquiry set is transmitted and a response is returned with the correct information. The transmission is typically completed using the Internet, AS2 or secure FTP. Some companies prefer to use a Value Added Network (VAN) system. An EDI 846 is encrypted and sent securely to be translated through the trading partner’s EDI software. An EDI 846 cannot be read without it being translated into a readable format by an organization’s EDI platform.

Benefits of an EDI 846

Without implementing an EDI 846, organizations would need to rely on human data entry. With the continual maintenance of extensive inventories, this increases the risk of inventory errors and ordering issues. An EDI 846 allows for constant supply chain updates without manual entry into different inventory management systems. Once an organization’s software translates an EDI 846, it can be manually uploaded or automatically integrated into its ERP or back-office system. Using EDI 846 allows organizations to streamline inventory communications efficiently, guaranteeing that inventory will be accurate when trading partners inquire as to a quantity of goods in stock.

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