A Sample EDI Document Flow in an ERS Program in the Automotive Industry

As promised in my last blog, How EDI ASNs Enable Evaluated Receipt Settlement (ERS), here’s a look at the wider set of EDI documents typically…

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James Hawden

August 7, 20133 minute read

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As promised in my last blog, How EDI ASNs Enable Evaluated Receipt Settlement (ERS), here’s a look at the wider set of EDI documents typically exchanged in support of the Evaluated Receipt Settlement process in the US automotive industry.  Below is a diagram and description of a typical document flow and how each document is used.

  1. OEM sends the following ordering documents:
    • Blanket Purchase Order (ANSI 850) – Orders goods for the coming year.  This order includes the pricing negotiated with the supplier.  The pricing is used when OEM evaluates the amount due to the supplier.  The goods are not shipped immediately.  They are shipped upon receipt of the Shipping Schedule.
    • Material Release (ANSI 830) – a weekly forecast of OEM’s requirements for the next several months.  The estimates for the first several weeks are solid and OEM commits to those.  However, estimates on their requirements for later weeks are subject to change in subsequent 830s.  Suppliers now understand what to prepare to manufacture.
    • Shipping Schedule (ANSI 862) – A daily or weekly notice to suppliers on what to ship on which days.
  2. OEM’s Supplier:
    • Sends the Advance Ship Notice (ASN) (ANSI 856) upon shipping goods according to the Shipping Schedule.  There are many of these per day in support of OEM’s Just-In-Time program in which goods arrive in time for their use in the manufacturing process.
    • Generates and affixes Bar Code Labels to the trailers/cases/boxes, enabling the goods to be scanned and be used in an automated receiving process at OEM’s receiving dock.
  3. Once OEM receives the ASNs, they process the goods received at the receiving dock.  Receiving dock personnel scan the trailers/cases/boxes, providing automatic update to OEM’s application system of exactly how many items were received.

    NOTE:If the goods arrive on a truck prior to arrival of the ASN, the goods are not accepted or processed.  Trucks will need to wait until the ASNs arrive.  Hence, suppliers must be vigilant about sending timely and complete ASNS.

    OEM sends the following documents to its suppliers:

    • Application Advice (ANSI 824) – notifies the supplier of the results of the analysis of the data processed by the OEM application system.  All data fields on the ASN are checked for validity and adherence to OEM requirements.
    • Receiving Advice (ANSI 861) – if applicable, notifies the supplier of receiving discrepancies or quality problems on the receiving dock or at the point of use for various conditions, such as:
    • Overage to the ASN (856) quantity
    • Shortage to the ASN (856) quantity
    • Receipt of material with no corresponding ASN
    • Material returned to supplier (e.g. defects or over shipments)
    • Material scrapped by OEM with supplier authorization
    • Notification to the supplier to adjust YTD cum shipped
  4. Remittance Advice (ANSI 820) – notifies the supplier that an EFT payment has been made.
  5. Dummy Invoice for European suppliers only – provides suppliers the documentation they need in order to adhere to VAT laws.

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