EDI (Electronic Data Interchange) for 3PL (Third Party Logistics)

What is 3PL? What does it mean?

3PL is a service that enables you to outsource operational logistics from warehousing, all the way through to delivery, and ultimately allows you to concentrate on other parts of your business. 

Third-party logistics firms give any services having to do with the logistics of the supply chain. It includes transportation, warehousing, picking and packing, inventory forecasting, fulfillment of an order, packaging, and freight forwarding.

EDI for 3PL

EDI omits the need to fax, phone, and email orders and transactions for better speed and accuracy. It also guarantees that all of your business systems are integrated.

Logistics companies have significant responsibilities. They find ways to provide support to every bit of a customer’s shipping transactions to handle all aspects of bringing goods from producers and merchants to the end customer, and they do it all. Many choose to subcontract shipping and fulfillment transactions to third party logistics (3PL) companies because it gives better visibility and permits companies to increase markets and deliver new products to more customers.

3PLs exploring to calibrate their business and succeed in today’s connected supply chain can leverage EDI to automate transactions. 

Successful logistics companies utilize EDI (Electronic Data Interchange). It is a modern technology that handles many protocols required to make themselves easy to do business with the members of their digital community.

EDI Benefits to 3PL

EDI gives 3PL and 4PL providers a foundation to continue the digital process automation and inventory management abilities that help their business grow. EDI is established to streamline workflows within the business, enhance trading partner relationships, and heighten supply chain predictability.

  • Manual data entry makes processes slow and is prone to errors. EDI eliminates the need for it.  Digital Process Automation will become reliable to help you improve your margins.
  • Transactions via email, fax, or phone calls are equivalent to a dollar amount. Automated transactions using EDI can cost less, and without the errors.
  • Analyzing business needs can be done accurately with EDI, letting you use the expertise in doing positive changes to internal processes.
  • Have accurate data and reports for your business in real-time, allowing you to handle inventory attentively, make more satisfying choices and decisions. 
  • Having most of the job done automatically will eliminate loads of your people and focus more on working to grow your business.

What are the EDI transactions used for 3PLs?

There are many EDI documents or transactions, but there are several that are commonly used by 3PLs. 

Below are the commonly used Warehouse and Third Party Logistics EDI documents.

  • EDI 846 

Inventory Inquiry/Advice transaction – used to communicate inventory information between manufacturers, their suppliers, and resellers. Also, to notify trading partners of actual inventory in various inventory locations.

  • EDI 856 (ASN)

Advanced Shipping Notice –  used to communicate the details of a shipment to another trading partner sent in advance. It includes order information, descriptions of products, types of packaging used, courier information, and more. This transaction is to notify remote warehouses that it is time to ship orders.

  • EDI 943

The Warehouse Stock Transfer Shipment Advice – is a notice for advance shipping to a remote warehouse that a transfer shipment is made. It is also used by manufacturers to authorize a warehouse to accept a return from a customer. The 943 is specifically for shipments to third-party warehouse locations. It provides the receiving site with details regarding the product being shipped like date of shipment, Manufacturer of goods, Receiving warehouse identification and location, Ship-from location address, Carrier information, and Item information including item number, quantity, unit of measure, etc.

  • EDI 944

Warehouse Stock Transfer Receipt Advice – is an acknowledgment to a manufacturer that the transfer shipment is received. Third-party warehouses stock products for manufacturers who then instruct the warehouse to ship to other locations.

  • EDI 945

A Warehouse Shipping Advice – confirms a shipment.  It is used by a warehouse to advise a trading partner that shipment was made. Notification includes Shipment identification, Ship-from and ship-to information, Date shipment was made, Shipment payment type information, Transportation method (e.g., air freight, ground, etc.), Shipping service level (e.g., overnight, 2-day delivery, etc.), and Item and quantity shipped, including variance from order quantity.

  • EDI 946

Delivery Information Message – is used by a receiving location to inform that a transfer shipment has been received.

  • EDI 997

Functional Acknowledgment – confirms to the sender that their document arrived and has been processed.

New to EDI or an expert, for questions or if you need advice, feel free to contact us and schedule an appointment at https://www.aiminsight.com/schedule.html.  I am excited to meet you.

About the Author: AJ Amjad Khanmohamed

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