Though distributors can’t change or control weather that wreaks havoc on the supply chain, such as hurricanes, floods, and lightning strikes, we can minimize the weather’s impact on our daily business processes by using Electronic Data Interchange (EDI).
I’ll share how you can use some common EDI transactions to help weatherproof your supply chain.
The EDI Invoice (EDI 810)
If you haven’t automated your paper-based invoice process to an electronic EDI solution, put this first on your list of ways to weatherproof your Supply Chain processes.
An EDI 810 is more powerful than a raging river or 36 inches of pressed snow.
It can ensure your account receivables get sent out—even if the postal service is unable to deliver as per their creed, "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds."
Another benefit of the EDI invoice is the ability to increase your cash collection process: Emailed or mailed invoices can be slowed down by foul weather or be lost outright. However, an EDI 810 will be sent electronically from your EDI mailbox to the intended recipient's EDI mailbox in minutes, depending on your customer's EDI scheduled VAN FTP or AS2 pickup process.
Many companies won’t start the clock on the payment terms until they receive the invoice, so any mailed invoices delayed by hurricanes or floods will extend the terms by several days to weeks, depending on the extent of the delay.
Your EDI system will send the EDI invoices out despite the weather, enabling the VAN to deposit your invoice to your customer safely and within the desired agreed-upon terms.
The EDI Receiving Advice (EDI 861)
The EDI 861 transaction is a report from the recipient of your goods confirming that the order or shipment has arrived at its destination.
How does receiving an acknowledgment of a shipment weatherproof your supply chain? As a shipper of goods, when you are sent an EDI 861, you will quickly know if your shipment reached its destination.
This is valuable because you can take action. If you don’t receive the EDI 861 confirmation, you’re able to proactively expedite a new shipment (from potentially a different location) to ensure the delivery is received on time.
Plus, you’ll know if the weather is delaying your shipping, which may impact other pending shipments.
As the sender of an EDI 861, you are alerting the shipper to the timeliness of the shipment as well as advising of any damaged goods that the shipper will need to replace.
This is all being done automatically, avoiding time wasted on phone calls or mailing damaged/short shipment notices to the shipper.
The EDI Lockbox transaction (EDI 823)
This transaction is an electronic version of a paper lockbox used by banks or other organizations to confirm payment has been made to the lockbox owners as well as total balances.
The EDI 823 is often used in conjunction with the EDI 820 transaction (remittance advice). This enables the whole electronic payment process to be handled without manual or paper-based intervention.
EDI 823 provides same day payment processing information, plus no more mailed bank statements are needed.
For many, it's vitally essential they process the lockbox payments on-time, and the bank needs the information quickly to ensure it can process the payments by any agreed-upon time commitments.
If a road is washed out from a flood or the roads are impassable due to ice, the EDI 823 transactions will still process smoothly through the VANs. This ensures all timelines are met, and all are notified of the completed transactions.
So regardless of whether the weather hampers your supply chain and brings commerce to a halt, rest assured your EDI equivalents will be sent and delivered without interruption.
If you haven’t already implemented the EDI Invoice, receiving advice, or lockbox transactions, consider adding these to your suite of supported EDI transactions.
And don’t forget your umbrellas…
For more information on EDI, access the whitepaper, “Determining Your eBusiness Strategy for EDI Operations,” at https://idea4industry.com/idea-exchange/edi-white-paper/.
To learn more about how you can automate your business processes, reach out to IDEA at 703.562.4600 or idea4industry.com.
Tom Guzik
Tom Guzik is the Director of Digital Integration Services at IDEA. He has two decades of extensive experience in Electronic Data Interchange ANSI X.12 (EDI) and supply chain automation processes, especially as it applies in electrical distribution and manufacturing. Prior to joining IDEA, he also worked with SAP systems, inventory control, logistics and warehousing, and Vendor Managed Inventory (VMI).