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Understanding the Basics of EDI

EDI 856

Ship Notice/Manifest

Understanding the Basics of EDI

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What is EDI 856?

An EDI 856, also known as an advance ship notice (ASN), is a type of EDI document used in the exchange of transaction information between commercial trading partners. The EDI 856 is a standard compliance document based on the Accredited Standards Committee (ASC) X12 format - the prevalent EDI standard used in the U.S., as defined by the American National Standards Institute (ANSI). The EDI 856 is used to provide advanced notice to a customer of a pending shipment of goods.

Why Use the EDI 856?

The EDI 856, along with other EDI documents, were created out of a need to enable just-in-time inventory ordering for a number of industries. In many sectors, especially retail, the EDI 856 is a critical aspect of doing business with large customers. Larger retailers rely on information sent via the EDI 856 to manage inventory levels and plan deliveries to coincide with on-time availability of key products when and where needed. In this regard, the EDI 856 provides key pieces of information, including: when a specific set of products is about to be shipped, where it's going to be shipped to and all other critical information about the shipment. 

Transmitting the EDI 856

The first step after the EDI 856 is created, is to transmit the document to the trading partner that will be receiving the shipment. The EDI 856 can be generated through a specialized piece of software, known as an EDI Translator. 

For local translator software customers, once the ASN is created, it is then sent to the recipient through some form of electronic communications. In sending an EDI 856, the issuer has a number of options but two are by far the most prevalent - using a Value Added Network (VAN) or through a direct link. Clients using an EDI cloud service have their ASN transmission included with the program.

When sending an EDI 856 through a VAN, the communication is sent to a dedicated "clearing house". The VAN mainly serves as a communication gateway or hub between multiple trading partners. In this manner, the sender and recipient of the EDI 856 are assured that the communication is secure and that the EDI 856 will be delivered when and as needed. 

The second popular option is to send the EDI 856 directly to the recipient using the Internet as the communication channel. This second option is typically done through software that can send the EDI 856 using a method known as AS2 Communication. When using AS2 to send the EDI 856, the document is encrypted at the source and is sent using secured Internet-based communication to the recipient, which must then have software capable of decrypting the EDI 856.

Translating the EDI 856

Assuming the recipient has successfully received and decrypted the EDI 856, the next step is to translate the EDI 856 into a format that is more readily available.  During this translation process, the EDI 856 will be translated by the EDI translator into one of two forms. One form is the human readable form of the EDI 856, which is essentially a report either printed on screen or paper, that presents the information contained in the EDI 856 into a format that is easily understood by the reader. The second translation type is to transform the EDI 856 into a flat-file form that is easily sent to the recipient's computer system. This is typically an ERP or accounting system where the EDI 856 information will be made available to the pertinent users in a standardized and familiar form. This form of EDI 856 translation is also known as EDI integration.

Integrating the EDI 856 into your Business

Once the EDI 856 is translated into a computer readable format, a secondary in-house process takes the generated file with the EDI 856 information and moves it into the client's ERP or accounting system. At this stage of the transformation, the EDI 856 has now become a document in the recipient's ERP system available in a form familiar to the users of that system. This type of "system to system" delivery of the EDI 856 is one of the most efficient and fastest means of delivery for the EDI 856, ensuring accurate data transfer in record time.

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