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Is your EDI program strategic? If yes, find out which documents you need to implement. (part 2)

In my last blog on this topic I introduced the Purchase Order Acknowledgment and the Purchase Order Change and discussed how you can derive benefits from both these documents regardless of the industry sector you are in.  In this blog, I focus on documents that are of specific benefit for anyone in, or working with, the retail sector. Here are a few you should definitely consider.

Product and Price Catalog

This is a key document that a supplier sends to its retailers.  It enables the supplier to provide product and price information for the retailer to use during the purchasing process.  This document, which is also known as a “sales catalog,” includes information about each product such as:

cat diagram for retail docs blog

  • Item identification number
  • Detailed item description, including color, size, dimensions and other unique identifiers
  • Ordering requirements, such as lead time and required quantities

This is one that you would use most with third-party catalog providers, but it can also be used on a peer-to-peer basis with your main trading partners. The master product data information in this document is re-used in many other supply chain transactions, so it’s important that it contains accurate data so that errors can be reduced in purchase orders, ship notices and invoices, among other documents. This will enable significant quality improvements and benefits both retailer and supplier.  Ultimately, starting out with good data will speed product delivery to the retailer and eliminate discrepancies between purchase orders and invoices, and for suppliers, this should result in faster payment.

Inventory and Product Activity Data Advice

Retailers usually send this document to their suppliers to give them information about inventory levels, sales numbers and other related product activity information, such as which items are on back-order.  It should include:

  • Item identification number
  • On-hand inventory quantity by store
  • Type of product movement, such as items sold, out-of-stock, received or on order
  • Future demand calculations

This versatile document can also be used in supplier-managed stock replenishment programs and sales forecasting.  Furthermore, for drop-ship orders, (those that are shipped directly to the consumer), it is probably the single most critical business document that can be exchanged. Most retailers’ e-commerce applications rely upon inventory feeds from their supplier here in order to determine whether products can be available for consumer purchases on websites.

Delivery Confirmation

This document is also extremely useful for direct-to-consumer delivery. Most products sent via a drop-ship process travel with small package carriers. The supplier obtains a tracking number from the carrier and provides it to the retailer via the Advance Ship Notice document.  Any automated communication typically ends at that point and so if order status is needed, the only way to get it is to contact the carrier. Instead, you could have complete end-to-end visibility of your order status if you ask the carrier to send a Delivery Confirmation document to confirm consumer receipt.  This helps the supplier to close the purchase order and to manage the payment and settlement cycle.

Click here if you are interested in learning more about EDI in the retail industry.

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