Grocery EDI: How it Works in Grocery Industry and what are Grocery EDI Transactions?
- April 10, 2023 / by Infocon Systems
The Grocery industry is a very competitive business sector, with low profit margins forcing retailers to boost operational efficiency and customer-focused services. Electronic Data Interchange commonly known as EDI, has become more widespread and is an effective tool for streamlining day-to-day business operations.
EDI is the computer-to-computer exchange of business documents between business partners using a standard electronic format. By moving from paper-based business document exchange to electronic transfer, businesses can diminish costs, increase processing speeds and reduce errors. It also fosters open and communicative business partnerships. Keeping customers informed creates a better user experience, which can generate even more orders.
Become a grocery industry leader by easily connecting to any trading partner around the world with web-based EDI solutions from Infocon Systems, an EDI supply chain service provider for companies of all sizes.
Manual ordering process before the implementation of EDI in the grocery industry
The traditional process of placing orders without EDI can be time-consuming and error-prone. The process involves manual data entry, which can lead to mistakes and discrepancies. In addition, the process requires significant manpower, as orders need to be confirmed, tracked, and verified multiple times. When a grocer places an order through fax or phone call, the supplier representative needs to manually enter the data into their system.
This process is prone to human error and can result in order discrepancies or delays. Upon delivery, the supplier submits an invoice, which is received by the buyer's accounts payable department. The department needs to verify the invoice against the original order and the actual items received, which can be a time-consuming process. This process can result in delayed payments, which can impact the supplier's cash flow.
Grocery EDI: How it Works
When grocers, suppliers, and wholesalers adopt EDI, the ordering process becomes streamlined and efficient. EDI works by allowing electronic exchange of business documents, such as purchase orders, invoices, and shipping notices, between trading partners. Here's a brief overview of how grocery EDI works:
- Order Placement: Grocers create and transmit purchase orders electronically using an EDI Software or system. The purchase order typically contains information such as item descriptions, quantities, prices, and delivery dates.
- Order Fulfillment: The supplier receives the electronic purchase order and uses EDI to send an order confirmation, which confirms receipt of the order and includes details such as delivery dates and quantities. The supplier then picks and scans applicable items in their warehouse before shipping. .
- Shipping Notification: The supplier sends an advanced shipping notification (ASN) using EDI to inform the grocer of the shipment details, including the contents of the shipment, tracking numbers, and estimated delivery times. .
- Receipt of Goods: Upon receipt of the shipment, the grocer scans the barcodes of the items and compares them to the original purchase order to ensure accuracy. This information is then updated in the grocer's inventory system. .
- Invoicing and Payment: The supplier sends an electronic invoice to the grocer, which is compared to the purchase order and ASN to ensure accuracy. The grocer then authorizes payment electronically, completing the EDI transaction.
Utilizing EDI in the grocery industry leads to significant improvements in efficiency and accuracy compared to the traditional manual process. With EDI, orders are processed and fulfilled more quickly, reducing the likelihood of errors and the need for manual data entry. EDI also provides greater visibility into the status of orders and shipments, which can help retailers and suppliers, make more informed decisions. In addition, EDI can reduce staffing requirements and save valuable time, as well as provide a well-documented data trail for error finding and review.
Grocery EDI Transactions
Grocery EDI transactions refer to the use of EDI in the grocery industry, where trading partners exchange electronic documents related to purchasing and selling groceries.
Some common grocery EDI transactions include:
EDI 875 (Grocery Products Purchase Order): It is used to order grocery products from a supplier or vendor.
The EDI 875 document includes information such:
- Purchase Order Number: A unique identifier for the purchase order.
- Supplier Information: The name and address of the supplier.
- Product Information: This includes the product description, unit of measure, quantity, and price.
- Delivery Information: The requested delivery date and the shipping address.
- Payment Information: The terms of payment for the products.
EDI 876 (Grocery Products Purchase Order Change): The EDI 876 transaction set is used to modify or cancel a previously submitted purchase order. The use of EDI 876 helps to streamline the modification or cancellation process for grocery products and can reduce errors and costs associated with manual processing of purchase orders.
The EDI 876 document includes information such:
- The original Purchase Order Number
- Product Information
- Delivery Information
- Payment Information
EDI 880 (Grocery Products Invoice): This transaction set is used to provide details of products sold and invoiced. It includes information such as the product ID, quantity, price, and any discounts or allowances.
EDI 882 (Direct Store Delivery Summary Information): This transaction set is used to communicate summary information related to a direct store delivery (DSD) shipment. The EDI 882 transaction set provides summary information related to DSD shipments, including the number of cases or units delivered, the quantity returned any adjustments or allowances, and the total amount due.
Other commonly used grocery EDI transaction sets include:
- EDI 856 (Advance Ship Notice): This transaction set is used to provide detailed information about a shipment of products, including the contents, quantities, and delivery details.
- EDI 810 (Invoice): This transaction set is used to send an invoice for products or services that have been ordered and received.
- EDI 846 (Inventory Inquiry/Advice): This transaction set is used to provide inventory information, such as current stock levels and anticipated delivery dates, to trading partners.
Grocery EDI Benefits
Using EDI in the grocery industry can have many benefits and help to improve everyday document workflow, which can promote continued business efficiency. Here are some specific ways that EDI can benefit grocers, wholesalers, and suppliers:
Improved visibility: With EDI, trading partners can exchange information electronically in real-time, which provides greater visibility into inventory levels, product availability, and order status.
Optimized shipping and receiving: EDI can help to automate the shipping and receiving process, reducing the need for manual data entry and improving accuracy. This can help to speed up the delivery of products and improve customer satisfaction.
Detailed inventory accounts: EDI can help to provide detailed and up-to-date inventory information, which can be used to optimize inventory levels, reduce waste, and improve forecasting.
Product traceability: EDI can help to track products throughout the supply chain, providing detailed information about where a product has been and when it was shipped or received.
To compete in the grocery industry, you need an EDI solution that maximizes automation, minimizes manual intervention and smoothly and cost-effectively meets your ever-changing business environment needs. Find the best EDI solution for your grocery-related business with assistance from Infocon Systems.
To know more on how we implement EDI for Grocery and integrate into any of their internal systems, contact our sales department at +1 888-339-0722 or email us at sales@infoconn.com