Classified POs in EDI

An EDI 850 Purchase Order is an electronic version of a paper Purchase Order, generally referred as “PO”. Companies use EDI to reduce the errors and costs associated with the manual keying of data, and to speed up the process of sending and receiving Purchase Orders. A buyer will use the 850 Purchase Order to communicate to a supplier the specific items, price, and quantities they wish to have delivered.

One of the important aspects of PO is the different types of Purchase Orders which is passed through the BEG02 Segment of 850 EDI data transmission depending upon the customer’s requirement. This topic is put up to throw some light on the Purchase Order Type Codes.

Standalone [SA]: A discrete, one-time commitment to a supplier for material.

Rush Order [RO]: Requisition requiring issuance of a Purchase Order in less than 5 days. In order to avoid costly disruption of pre-planned programs, or to eliminate a significant safety or security problem, order must be accompanied by the Purchasers, justifying explanation. Here invoice can be sent after some time but the delivery should happen immediately. Generally this happens in the festive seasons.

Blanket order [BE] / [BK]: A blanket order is defined as an order the customer negotiates with its supplier. This order contains multiple delivery dates scheduled over a period of time for specific goods, sometimes at predetermined prices. It is normally used when there is a recurring need for expendable goods. Hence, items are purchased under a single purchase order rather than processing a separate P.O. each time new supplies is effected.
Types of Blanket Order
There are two types of Blanket Orders, one with firm quantity and the other with Estimated quantity.

Blanket order (firm quantity)[BK]: The Type Code of "BK" will identify a bulk Purchase Order, with store/quantity allocations. The same purchase order number in the bulk "BK" order will be transmitted in the release "RL" order.

Blanket order (Estimated quantity)[BE]: The Type Code of "BE" will identify a bulk Purchase Order, without store/quantity allocations ie Not Firm Commitment. The same purchase order number in the bulk "BK" order will be transmitted in the release "RL" order.

Advantages of Blanket Orders
For the customers, negotiating a blanket order will dispense him from holding large inventories of goods, while letting him avoid the administrative expense of processing frequent purchase orders. Also, it will often give him access to favorable discount pricing through volume commitments.
As for supplier, the advantage in signing blanket orders include better management of its own supplies, as well as better planning of delivery and production cycles. Also, signing blanket orders can ensure a steady workflow, rather than producing / supplying large quantities of products at irregular intervals.

Usage of Blanket Orders

Blanket purchase orders should be used when
• There is repetitive purchase of specific goods and service from the same supplier, which are paid in a predictable manner.
• Orders require numerous shipment / excessive storage.
• Enable the purchaser to obtain favorable pricing through volume discount.
• Supports a long-term relationship between the purchaser and the supplier.

Blanket purchase orders generally should not be used when
• No benefits will be derived over use of a regular Purchase Order (i.e. volume discount).
• Quality of services and goods supplied by vendor are questionable.
• No relationships exist between the purchaser and the supplier

Content of a Blanket Order
Blanket orders format usually include the following information:
• The beginning and ending time period for the blanket order;
• A cancellation clause;
• Items and/or categories of items to be covered by the blanket purchase order;
• The estimated quantity including a maximum (if any);
• Prices and pricing arrangements;
• Terms and billing arrangements;
• Personnel authorized to issue order releases;

Release Order [RL]: An order for goods and services placed against a pre-existing contract or blanket order The Type Code of "RL" will identify a release of a bulk order, with the store/quantity allocations transmitted in the SDQ segment. The same purchase order number transmitted in the bulk "BK" order will be transmitted in the release "RL" order.

Dropship [DS]: Dropshipping is a very common phenomenon in the Retail Industry. It gained popularity for its usefulness and commercial viability. We will discuss about it and also how should do we handle it in EDI ANSI X12.

What is Dropshipping And How Does it Work?
Drop-shipping means shipping products from a wholesale supplier directly to your retail customer. In other words, you sell products in your online store, and ship the goods to your customers directly from the warehouse of your drop-ship wholesale supplier.

Why would you want to do this? Well, you only BUY a product after you already SOLD it to your customer. There's no risk of having piles of unwanted stock in your inventory.

And if you've ever sold anything and sent the products to your customers, you'll know there's a lot of time, effort, and costs involved in packing and shipping things. When you're drop-shipping, the drop-ship supplier takes care of all that for you.

Won't the customers just go direct to my wholesaler and not buy from me any more?
With a good drop-shipper, your customer only has contact with you, not with the supplier. The wholesale products will be sent "blind" by the supplier so that your customers cannot trace the name and address of the drop-ship source.

Why Consider Drop Ship Wholesale Sourcing?
• You can start a business selling products without a large initial investment;
• You don't have to buy electronics in bulk - just order after you get paid by your customers;
• You can 'stock' your online shop with a huge range of the latest products;
• All the item descriptions and pictures, you can just copy from your supplier;
• You can list items for sale, and if they aren't popular, you didn't lose anything;
• No warehouse costs and no risk of 'dead' stock;
• You don't have to worry about packing materials, shipping labels, paying couriers for delivery, or customising the product contents for different regions;
• You can sell and ship to customers anywhere in the world;
• You set your own prices and profit every time you sell something!

Who can avail the benefit of Drop-ship Selling ?
• Anyone who wants to start a home based business
• Anyone who wants to start an online business
• Anyone who has an eBay business
• Anyone who doesn't want to hold inventory
• Anyone who doesn't like overhead costs

Benefits which can be derived from Drop ship consignment
• Eliminates cost of faxing, mailing, or overnighting packing slips
• Eliminates hard copy printing
• Increases availability and accuracy of up-to-date order status, shipping, and invoice information
• Improves customer service
• Reduces labor requirements
• Supports a broader selection of merchandise without additional inventory costs
• Enables faster revenue recognition
• Enhances revenue generation by extending peak/holiday selling seasons
• Improves supplier management

Direct ship—direct shipping [DR] and drop shipping are two terms generally used interchangeably. They describe a process whereby three parties interact with the sales transaction (the buyer, the seller, and the supplier). The buyer initiates a purchase from the seller who then arranges with the supplier to ship the product directly to the seller. The seller does not carry inventory of the product and the supplier does not have any direct communication with the buyer. The buyer pays the seller and the seller pays the supplier. Though both terms (direct ship and drop ship) are generally used to describe the same process, I've always considered a small distinction between the two that relates two where you are in the supply chain. To the seller, direct shipping describes both the process and an inventory/sales strategy, however, the supplier will frequently just use the term "drop ship" to describe the process whereby he is shipping the product to an address other than that of his customer (the business that is paying him for the product). Sometimes the term drop ship also describes the process of shipping to any location that is different from the customer's normal shipping location. This subtle distinction is sometimes evident in the terminology used in software documentation.

There are many more types of POs passed through BEG02, like, New Order [NE], Special Order [OS], Reorder [RE] etc which are also commonly used.

For any other info, mail me at madhurima@crossroadtechnologies.in

Importance and transmission process of Packing details

In the retail industry packaging plays a key role in the business transaction. Product gets packed in intricate packaging process to facilitate logistic and customers’ ease of operation. This has to be passed properly through EDI segments in various documents to transmit properly between the Trading Partners. A few technical jargons are used to handle the packaging scenario and also used in EDI transaction. A brief discussion is presented below.

Most commonly used terms are :
Pack: The purchased unit which contains a specified quantity.
Pack ID: A unique alpha numeric code provided by the Vendor to represent a unique Case Pack
Inner Pack: A packing unit inside a Pack.
Inner Pack ID: A unique number that represents the packing unit inside a Pack.

Pack and Inner Pack related data transmission:
The PO4 Segment is used to transmit information about the packaging of the product being ordered in the case or carton. Two level of packaging may be specified. The first level, specified using PO401(Pack) which is Data Element 365, may be actual items, e.g., consumer units or may be the number of smaller containers within the case. The second level , specified using PO414(Inner Pack) which is Data Element 810 , is the number of eaches in each inner container when Data Element 356 is the number of smaller containers within the case.

Variation of Data Element Definition:

As defined in 3070
Data Element 356 : Pack-Number of inner pack units per outer pack unit
Data Element 810 : Inner Pack- Number of units in each selling pack or inner item

As defined in 4010
Data Element 356 : Pack-Number of inner containers, or numbers of each if there are no inner containers, per outer container.
Data Element 810 : Inner Pack- Number of eaches per inner container. Data Elements 356 and 810 (Pack) may be used to specify the packaging of the items in the case or carton.

Example A: No inner pack , ordering quantities specified in the cases.
In the Purchase Order, the item U.P.C . is specified and the unit of measure is Case. Data Element 356 is used and Data Element 810 is not used. The absence of Data Elements 810 indicates that the inner packs are not used.

VICS EDI example
Data Element Value
PO102              20
PO103              CA
PO401              10
PO414             Not Used

The total number of cases ordered is 20. The total number of eaches ordered is 150, case quantity ordered multiplied by Pack quantity (20*10=200)

Example B: No inner pack, ordering quantities specifics are in Eaches:
In the Purchase Order, the item U.P.C . is specified and the unit of measure is Each. Data Element 356 is used and Data Element 810 is not used. The absence of Data Element 810 indicates that inner packs are not present.

VICS EDI example
Data Element Value
PO102              20
PO103              EA
PO401              10
PO414             Not Used
The total number of eaches ordered is 200. The total number of cases ordered is 10, eaches quantity ordered divided by Pack quantity (200/10=20).

Example C: Inner Packs, ordering quantities specified in Cases:
In the Purchase Order, the items U.P.C. is specified and the unit of measure is Case. Data Element 356 and 810 are both used. The presence of Data Element 810 indicates that the inner packs are used, i.e., each case contains 6 small containers and each smaller container contains 4 of the units specified by the item U.P.C.

VICS EDI example
Data Element Value
PO102              10
PO103              CA
PO401              6
PO414              4

The total number of cases ordered is 10. The total number of eaches ordered is 240, case quantity ordered multiplied by the product of Pack quantity and Inner Pack quantity (10*(6*4)=240).

Example D: Inner Packs, ordering quantities specified in Eaches:
In the Purchase Order, the items U.P.C. is specified and the unit of measure is Each. Data Element 356 and 810 are both used. The presence of Data Element 810 indicates that the inner packs are used, i.e., each case contains 6 small containers and each smaller container contains 4 of the units specified by the item U.P.C.

VICS EDI example
Data Element Value
PO102              240
PO103              EA
PO401              6
PO414              4

The total number of eaches ordered is 240.The total number of cases ordered is 10, eaches quantity ordered divided by the product of Pack quantity and Inner Pack quantity (240/(6*4)=10).

Live Scenarios of usage of Pack/Inner Pack

Example 1: No inner Pack
Household cleaning product is the item in the example, packed 12 to a case. The shipping container is marked with a case U.P.C. and the items is marked with the consumer U.P.C. The product size is 5 ounces

Example 2: Simple Inner Packs
Cosmetic is the item in this example. The product is shipped using inner containers. There are 2 inner containers per shipping container and each inner container holds 6 consumer units. The shipping container is marked with a case U.P.C., the inner containers are not marked with any U.P.C. marking, and the item is marked with the consumer U.P.C. The product size is 3 ounces.



Example 3: Complex Inner Packs
Canned Vegetable is the item in the example. The product is shipped using inner containers. There are 6 inner containers per shipping containers and each inner containers holds 4 consumer units. The shipping container is marked with a case U.P.C., the inner containers are marked with a consumer U.P.C.(U.P.C.1 → considered as saleable item), and the item is marked with the consumer U.P.C. .(U.P.C.2 → also considered as saleable item). The product size is 8 ounces.


For any query, mail me at :
madhurima@crossroadtechnologies.in

Crossroad EDI Process : in a nut shell

The EDI Process for Crossroad Technologies has been complied to provide a comprehensive guideline for the EDI team to undertake and perform any activities, which is directly or indirectly related with EDI. The process aims to detail all functional steps which needs to be complied with, documents that needs to be prepared and maintained and communication protocols that needs to be adhered to.

Scope of EDI Process

- Understanding of Functional Business requirement of Trading Partner(s)
- Study of Application Layout
- GAP Analysis
- Mapping Service
- Event Setup
- Map Translation
- Comprehensive Map Testing

We at Crossroad Technologies, India operation intends to undertake end-to-end functional EDI process activities based on specific customer requirement. The scope of this requirement may involve one or more of the process activities mentioned hereinabove. Keeping in tune with the customer requirement, the EDI team needs to plan and follow certain mandatory steps to make the execution process uniform. Crossroad’s scope of EDI process involves the following process activities.

GAP Analysis

GAP Analysis for EDI signifies identification of deficiencies in process processes and data. It involves comparing of data ie Application Layout available electronically in an existing system with data required as per a defined and agreed EDI standard (ANSI X12,EDIFACT,VDA,App to App etc.) between Trading Partners.

Typical GAP Analysis steps involves the following :

• • Identification of all fields on paper claims

• • Identification of all fields in Application File or Database or Parser File

• • Identification of Manual Intervention within Process

• • Determination of data fields which are required

• • Determination of how to automate the transition process

Mapping Services

Mapping services involves steps which are necessary to code logic, to be followed for interchanging of an electronic document from one format to another. A code for mapping is typically done using a mapping workbench. The scope of mapping services includes detailed understanding of the GAP analysis document or Field Mapping Document (FMD) and coding the map as per the instruction of FMD. During the mapping process, the map developer may raise logical issues pertaining to mapping which needs to be clarified from VAN or Customer and included in the mapping process.

Typical Mapping steps involve the following :

• Detailed study of FMD

• Coding of map using workbench

• Identification and raising of logical issues

• Sought clarification regarding the raised issues

• Incorporation of clarifications with regards to the issues

• Translation of map

• End to end testing of output generated per approved Test Plan

Comprehensive Testing

Comprehensive EDI Testing involves testing of GAP documents and Maps. All activity of the EDI process should be tested functionally by the testing team to ensure that the deliverables meet the stringent quality standard defined by the process.

The testing activities include :

• Communication Testing

• Data/ Business Logic and Data content/ Offset Testing

• Validation and Code Testing

EDI Functional Blocks

We at Crossroad perform all its EDI related tasks in 4 distinct phases. This forms the building blocks of our EDI process. All the phases are independent and should stricktly adhered to conform to the process guidelines of the process.

Phase 1 : Analysis phase

It includes a) Identification of business process flow for the EDI document concerned (ie 850,810,856 etc) b) Development of Cross-reference spreadsheet to populate application layout.

Phase 2 : Setup phase

It covers a) Clear understanding of development tools and its Set up b) Preparation of stages for coding, translation and testing.

Phase 3 : Development phase

It includes a) Pre map GAP analysis, test data, EDI standard and versions b) Understanding the requirement of external cross reference table and exploring the inclusion of scripting possibility c) Coding on the work bench d) Consulting VAN/ Trading Partner for any technical/ non-technical clarification and e) Translation for getting the required output.

Phase 4 : Testing phase

It includes a) Communication testing b) Data/ Business logic testing c) Data content/ Offset testing d) Validation testing e) Code testing f) Bar code level testing and lastly g) Moving from staging to production scenario.

Documenting and reporting of EDI Process

As applicable for any technical process, the need of documenting activities related to EDI is of primary importance. Documents in different forms should be maintained at different levels and stages to enable retrieval of project related information as and when required. Documentation in EDI process covers maintenance of periodical reports, which should be prepared by the Project Managers and customary process related activity forms generally maintained by the EDI team.
The primary objective of documentation of EDI Process is to set a standard, which forms the SOP (Standard Operating Procedure) of Crossroad. All documents of EDI process should be following a conventional numbering system, which is easily understandable and referred to as and when required.

Listed below a few reports which are commonly used

• Map Request form

• Log Sheet

• Map Status Report

• Map Kit Issue List

• GAP Analysis document (FMD)

• FMD Issue Lists

• Map Study and Mapping Issue list

• Testing Issue Sheet

• Map Code

• Mapping Report

• Minutes of Meeting

Ramping up a EDI Process

The ramping up process defines the necessary steps that need to be followed to start up a new EDI Project. Considering the nature of EDI Project, the ramping up steps may be adjusted or fine tuned to address specific project-centric need. The generic rules are as follows :

• Identification of scope of the EDI Project : EDI Team

• Techno Commercial Project proposal preparation : PM & Management

• Signing of SLA : Management

• Designing of Project-centric SOPs (Standard Operating Procedure) : PM

• Identification of Resource : PM

• Assigning responsibility, roles and service level expectation of Management : PM

• Scheduling Training session for members for if required : PM

• Training session of EDI Team on Technology and Tools to be used in the Project : PM & VAN

• Appraisal of Team members and ascertaining comfort level in using Technology and tools to be used for the project.

• Project Enunciation

The above mentioned process is a guideline to execute EDI process flawlessly. With the emergence of new technologies on daily basis, the existing process needs continual addition and improvement to accommodate new procedure which may me more efficient and robust. Thus a sustain and consistent effort is provided by Crossroad EDI Team to accumulate such new trends, practices and challenges which would be beneficial to process and continually present them to the QA department to update and accommodate them to the existing EDI process.

For any further query contact me at ambarnath@crossroadtechnologies.in

Segmentorial difference - VICS vs AIAG

While studying Field Mapping Document for different clients and performed mapping, we came across many segments and elements which have specific usage. We analyzed a few doc types of VICS and AIAG and found significant difference so far segments is concerned. The difference is also found version-wise. The variation in segments is all need based and tool based patches are available to upgrade the work bench.

VICS 850 VER:4010	AIAG 850 VER:3010
Elements like Invoice Type Code, Contract Type Code, Purchase Category, Security Level Code, Transaction Type Code of BEG segment are present.	These elements of BEG are not defined in the AIAG.
Composite element, Reference Identifier and its sub/composite elements are present, in the REF segment under Header and Detail level.	These are not present in the REF segment.
Number of elements in PER segment is more.	Number of elements is less in PER Segment.
The element Customs Entry Type Group Code in the TAX segment is present.	This element is not present in the TAX segment.
The CTP segment is not present in the Header level, but in the Detail level.	The CTP segment is present both in Header and Detail section
The CSH segment comes after FOB segment in header level.	The CTP segment comes after FOB segment in header level, and the CSH comes in the detail level only.
The SSS segment is not Present at both the levels.	SSS segment is Present at the header level after CTP segment
TC2 Segment is present at header level	TC2 is not present here.
SAC segment is present both in header and detail levels.	SAC segment is not present here.
ITD segment is present both in header and detail level	ITD segment is present only in header level.
ITA segment is not present	ITA segment is present only in header level
Elements like Date Time Period Format Qualifier, Date time period are present in DTM Segment in both header and detail levels.	Date Time Period Format Qualifier, Date time period are not present in the DTM segments.
PID segment is present in header and detail level.	PID segment is present in detail level only.
PWK segment is present in both header and detail levels.	PWK segment is present only in header segment.
PKG segment is present both in header and detail levels.	PKG segment is present only in header level.
TD1 segment is not present.	TD1 segment is present in header level.
TD3 is present in header level.	TD3 is not present.
TD5 is present in both header and detail levels.	TD5 is present in only header level.
PCT segment is present in header level.	PCT segment is not present.
CTB segment is present in header level.	CTB segment is not present.
TD4 segment is present in N1 group but TD5,TD1,PKG is absent in HEADER level.	TD1,TD3,TD5 segments are present in N1 group.(HEADER LEVEL)
CTP segment in detail level comes before CUR	PCT segment in detail level comes after CUR
MEA segment in detail level comes after CUR	MEA segment in detail level comes after CTP
PO3 is absent in PO1 group	PO3 is present in PO1 group
SDQ segment is present in detail level.	SDQ segment is absent in detail level
SLN group is present in detail level	SLN has no group.

Let us see segment wise difference between VICS 856 VER:3050 and AIAG 850 VER:3050

VICS 856 3050 version	AIAG 856 3050 version
NTE,DTM segments come after BSN segment	Only DTM segment comes after BSN
PER segment comes under HL level	PER segment is absent
LH1 group comes under HL group	LH1 group is absent
MAN segment comes under HL group	MAN is absent
N2,N3,N4,REF,PER, FOB come under N1 group	Only N2, REF come under N1 group
SDQ comes under HL level	SDQ is absent.
GF segment comes under HL	GF is absent
LM group is present under HL	LM group is absent under HL

For any other query mail me at ambarnath@crossroadtechnologies.in