Manufacturing EDI & Common EDI Transactions in Manufacturing Industry
- February 16, 2023 / by Infocon Systems
The manufacturing industry depends on the effective flow of data in the supply chain to fulfil many of the required tasks for getting products to market. Suppliers and trading partners in the manufacturing industry use generally accepted industry processes in the supply chain to support the distribution of items to mass markets at better prices.
What is Electronic Data Interchange (EDI)?
EDI is a method to communicate business documents between two partners electronically based on a predefined standard. EDI has replaced the use of manual processes like paper documents or the exchange of business information by email.
How is EDI used in the manufacturing industry?
EDI (Electronic Data Interchange) is the process of choice for helping manufacturers to increase their supply chain productivity through accurate and timely transactions.
The supply chain cycle starts with an EDI 850 Purchase Order, which is one of the most common EDI transactions. The supplier then sends back an EDI 997 Functional Acknowledgment that lets the sender know the order was received. The next step is an EDI 855 purchase Order Acknowledgment to confirm that the supplier will provide what the buyer requested in the Purchase Order.
From there, the manufacturer will inform the customer that they are shipping an order with an EDI 856 Advance Shipping Notice. Then an EDI 810 Invoice is sent to indicate the amount the customer owes the supplier. The customer will respond with a Payment Order, also known as an EDI 820
Payment Remittance Advice, that tells the supplier which the invoice has been paid and for how much. The Payment Order closes out the life cycle of an order.
Infocon Systems is a trusted EDI service provider that offers web-based EDI solutions that streamline the labor-intensive processes associated with the day-to-day activities for moving products through the supply chain. Infocon Systems supports all the required EDI transaction types.
Commonly used EDI documents in manufacturing industry:
For your convenience, Infocon Systems have compiled a list of must-know EDI transactions sets for the manufacturing industry.
EDI 810 (Invoice): EDI 810 is an electronic document sent by the seller to the buyer for payment of the goods or services. EDI 810 includes product quantity, description, price, with the information about the sender and recipient.
EDI 820 (Payment Remittance Advice): An EDI 820 Payment Order/Remittance Advice is an electronic document that can be used to initiate payments and send remittance information. A buyer will send an 820 Payment Order/Remittance Advice to a seller when payment is made, especially in the case of an Electronic Funds Transfer.
EDI 830 (Planning Schedule with Release Capability): The EDI 830 one is most important when it comes to EDI documents in manufacturing. An EDI 830 is the EDI document that the buyer sends to the seller, the manufacturer; in order to inform the seller of anticipated demand in the coming months.
EDI 850 (Purchase Order): EDI 850 is usually sent by buyers to their sellers for placing an order for goods or services. This transaction set includes the quantity of the required items with all the details regarding the order like Item description, price, and quantities etc.
EDI 855 (Purchase Order Acknowledgement): The EDI 855 is a reply to the message (EDI 850). It is sent from the seller to the buyer to inform them that how much of the order can be fulfilled, and any discrepancies from the original order
EDI 856 (Advance Ship Notice): EDI 856 is sent from the seller to the buyer to inform them when and how the goods will be shipped.
EDI 860 (Purchase Order Change): EDI 860 transaction set is sent to the supplier from their buyers when a revision to the original purchase order is needed.
EDI 997 (Functional Acknowledgement): EDI 997 transaction set is used as an automated response sent from a receiver of an EDI message to confirm receipt of the message.
Benefits of using EDI for Manufacturers
Electronically exchanging information is much less expensive than handling paper documents. The EDI process provides many benefits to the manufacturing industry. These include:
- Much less labor time is required
- Fewer errors occur because computer systems process the documents rather thanprocessing by hand
- Business transactions flow faster.
Faster transactions support reduction in inventory levels, better use of warehouse space, fewer out- of-stock occurrences and lower freight costs through fewer emergency expedites.
To learn more about how Infocon Systems can take care of your EDI needs for Manufacturing Industry,, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.