Advance shipment notices (ASNs) or an EDI 856 provide details on the timing, contents and packaging of upcoming deliveries. Although ASNs are not new to the industry, the use and benefits of these EDI documents are not always understood.
The key data elements included in an ASN are:
- Purchase Order number
- Ship Notice number
- Location where the product is be shipped to
- Ship from/Supplier
- Ship and/or delivery date
- Product/service identifiers such as UPC/EAN/GTIN with their respective quantities
Additional data that may also be included in the ASN are:
- Carrier reference/tracking numbers and service levels
- Vendor Number
- Freight Terms
- Additional item identifiers such as Buyer Item Number and Vendor Part Number
- Item Description
Without ASNs, the receiving process suffers from a number of inefficiencies. These challenges include the lack of visibility into what shipments are going to arrive and when. Warehouse managers cannot properly plan labor schedules; implement cross-docking techniques or monitor inventories in-transit.
Benefits of an ASN
Benefits of an ASN can be realized by both the purchaser and the supplier of implementing electronic trading of the ASN. To optimize benefits the document must be sent at the time of the physical shipment. This is usually done right after the doors are closed on the trailer and shipment arrival date is confirmed within the suppliers ERP system. Some of the benefits that can be realized include:
- Improved visibility to when an order has been shipped what was actually on the shipment
- Increased accuracy of shipments
- Allows the purchaser to re-order product from another supplier if the shipment is short, before the shipment arrives
- Allows cross referencing for purchase orders against shipments
- Increases the speed of fulfillment
As manufacturers are required to be leaner and provide just-in-time supply an ASN becomes essential. Without visibility into shipment locations and expected arrival dates, merchandising personnel cannot effectively plan marketing activities, production schedules or customer deliveries.
Some suppliers may have contractual agreements to fulfill with their customer that will result in what is called a “charge back”. Charge backs are charges that the customer will subtract from the invoice if the supplier did not fulfill their obligation. Some examples of charge backs are incomplete shipments, late shipments, and out of stock items. If the ASN is accurate, then the supplier will find out about charge backs sooner than if they find out when an invoice is paid short. This allows more time for the supplier to fix shipment issues quickly to avoid future charge backs.
ASNs, along with other EDI documents such as shipment status updates from transportation providers, can enable supply chain managers to have insights into the locations of goods in transit. As a result, companies can confidently reduce safety stocks, freeing up working capital.