Warehousing EDI: Benefits and Common EDI Warehouse Documents

Electronic Data Interchange (EDI) in Warehousing & Storage

In today's demanding business landscape—largely due to the sharp rise in eCommerce and the Amazon effect—efficiency is the lifeblood of successful warehousing. Every second counts, from the moment an order is placed to the final moment it reaches the customer's doorstep. 

Enter Electronic Data Interchange (EDI), a loyal and powerful technology for warehouse operations. By enabling seamless, automated communication between warehouses, suppliers, carriers, and retailers, EDI provides end-to-end visibility, process automation, error reduction, and streamlined workflows. This translates to faster order fulfillment, reduced costs, and stronger bottom lines. 

Whether using an on-premise or cloud EDI solution from an EDI provider, there are key documents that are used to relay key information between EDI trading partners (ex. manufacturers, retailers, 3PLs, customers, etc.). In warehousing in particular, certain documents will be used more than others. This includes 3PL EDI transactions, which are crucial for third-party logistics providers to efficiently manage inventory, shipping, and receiving on behalf of their clients.

Benefits of Warehouse EDI & 3PL Integration Automation

Automating warehouses and 3PL integrations automation enhances existing processes by seamlessly sharing shipment and inventory data with partners, providing mutual competitive advantages.

Key benefits include:

• Reduced Manual Processes and Errors: EDI minimizes manual tasks and the associated risk of costly errors.
   
• Cost Savings: Electronic transactions are significantly cheaper than those done via phone, fax, or email, and they reduce error-related costs.
   
• Increased Predictability and Performance: EDI provides clear insights into business needs, enabling informed internal process improvements.
   
• Improved Forecasts: Real-time data allows for better inventory management, decision-making, and the implementation of just-in-time (JIT) and lean production methods.
   
• Control Over Margins: Automation eliminates expensive manual processes, leading to more predictable and reliable operations, ultimately improving margins.
   
• Freed-Up Resources: By automating tasks, EDI solutions free up staff and resources to focus on strategic initiatives that drive business growth.
   

ANSI X12

In the world of EDI, standards are crucial for ensuring smooth and error-free communication between businesses. These standards define a common language for how data is formatted, structured, and exchanged electronically. 

ANSI X12, also known as the American National Standards Institute X12, is the dominant standard in North America and warehousing—used for exchanging business documents like purchase orders, invoices, and shipping notifications.

8 Common EDI Documents in Warehousing

Now that we understand how EDI pertains to warehousing, let's delve into the documents that make EDI communication possible. 

EDI documents (electronic messages) are the workhorses of EDI communication, streamlining crucial processes and keeping warehouses and their partners in sync. Some of the most common EDI documents you'll encounter in warehousing and storage operations include:
 

1) EDI 846 - Inventory Inquiry

EDI 846 Inventory Inquiry/Advice communicates inventory information between manufacturers, suppliers, and resellers. It is used by sellers of goods and services to provide inventory information to a potential customer, and also by sellers to inquire on the availability of inventory.

EDI 846 acts as a digital inventory check, leading to smoother order fulfillment and better supply chain efficiency by providing: 

• Accurate Inventory: Prevents orders for out-of-stock items.
• Order Planning: Warehouses can plan for upcoming orders and avoid backorders.
• Better Decisions: Retailers can adjust purchases, and warehouses can optimize storage space.
• Clear Communication: Everyone has the same information on current inventory.
   

2) EDI 856 - Advanced Shipping Notice

An EDI 856 Advance Shipping Notice (ASN), is a critical and widely used document that notifies the receiving party of a shipment, specifically describing the contents of a shipment. The document is sent preceding a shipment’s arrival. 

Many major retailers require it to be sent within a certain time frame before the product arrives at a given distribution center or store. Warehouses may also receive an ASN from a manufacturer or supplier for an incoming inventory refresh.

EDI 856 equips warehouses with the necessary information to efficiently prepare for a delivery or notify a buyer of an outgoing shipment by: 

• Providing Vital Details: This includes arrival date, carrier info, item list, and quantities.
• Minimizing Errors: Advanced info allows for verification against purchase orders, reducing receiving delays.
• Improving Efficiency: Knowing what's coming allows for better inventory management and smoother 3pl integrations.
   

3) EDI 940 - Warehouse Shipping Order

An EDI 940 Warehouse Shipping Order instructs remote warehouses to ship orders. It is most often used by the seller, wholesaler, or manufacturer, to authorize a warehouse to send a shipment to a buyer, like a retailer. In short, the EDI 940 more or less informs the warehouse on what to ship, when to ship, and how much to ship.

This streamlines picking, packing, and shipping, while keeping inventory accurate, by telling warehouses:

• What to Ship: Lists specific items, quantities, and handling instructions.
• Where to Ship it: Includes the customer address and desired shipping method.
• How to Document it: Specifies any packing slips or invoices needed.
   

4) EDI 943 - Warehouse Stock Transfer Shipment Advice

An EDI 943 Warehouse Stock Transfer Shipment Advice is an advance ship notice to a remote warehouse indicating the transfer shipment has been made from the manufacturer. EDI 943 is also utilized by manufacturers in order to authorize a warehouse to accept a return from a customer.

EDI 943 helps the receiving warehouse:

• Prepare: Allocate space, schedule staff, and update inventory based on the shipment details.
• Track: Gain visibility into internal stock movements for better supply chain management.
• Minimize Errors: Reduce discrepancies through electronic transmission of detailed item information.
   

5) EDI 944 - Warehouse Stock Transfer Receipt Advice

An EDI 944 Warehouse Stock Transfer Receipt Advice acknowledges to a manufacturer that its transfer shipment has been received.

EDI 944 acts as a digital handshake between warehouses by: 

• Verifying Receipt: Electronically confirms the goods arrived.
• Providing Details: Includes received quantities and any discrepancies (damage, missing items).
• Reconciling Inventory: Both warehouses can update their stock levels based on the actual received items.
   

6) EDI 945 - Warehouse Shipping Advice

The EDI 945 Warehouse Shipping Advice is an electronic data interchange document used to verify fulfillment of a shipment. Typically transmitted by a warehouse to their customer, it informs the customer that a shipment has been successfully executed.

EDI 945 tells customers: 

• The shipment is on its way: Informs the customer their order has been shipped.
• What's included in the shipment: Provides details on what was shipped (quantities and descriptions).
• How to track the shipment: Includes a tracking number if available.
   

7) EDI 946 - Delivery Information Message

An EDI 946 Delivery Information Message serves as a digital receipt for transfer shipments. The warehouse sends the EDI 946 to the manufacturer or supplier, which provides delivery confirmation and detailed information about the delivered goods

EDI 946 informs suppliers and manufacturers of:

• Shipping Confirmation: The shipment arrived.
• Shipment Arrival Details: The date and time it arrived.
• Shipment Contents: Item details and quantities.
• Any Issues: Damages, missing items, etc.
   

8) EDI 997 - Functional Acknowledgement

An EDI 997 Functional Acknowledgement acts as a response to other received EDI transactions. It serves as a receipt, acknowledging that the remote party received an EDI transaction or a group of transactions.

EDI 997 acts as a digital receipt by:

• Confirming Data Accuracy: states if data was received correctly (accepted).
• Identifying Errors: Highlights any errors (rejected) with specifics for easy correction.
   

Solving Your EDI Warehousing Issues

Cleo understands the challenges warehouses are facing today. That’s why we Cleo offers modern EDI, using Cleo Integration Cloud (CIC), our flagship ecosystem integration platform that provides robust features and a user-friendly design—tackling all your EDI warehousing needs. With CIC you’ll experience: 

• Effortless Integration: Cleo seamlessly integrates with your existing warehouse management system (WMS) and other backend applications, as well as your trading partners’ applications (ex. TMS, ERP, CRM). This eliminates the need for complex custom coding—meaning you can be up and running quickly so you can maximize your return on investment. And with our pre-built integrations to thousands of popular 
   
• Automated Workflows: Say goodbye to manual data entry and error-prone processes. Cleo automates EDI transactions and end-to-end processes. This frees up your staff to focus on higher-value tasks, creates happier customers due to more accurate orders and faster communication, and ensures data accuracy throughout your supply chain.
   
• Enhanced Visibility: Gain real-time visibility into your entire supply chain and warehouse. Cleo provides a centralized platform for monitoring all your EDI transactions, giving you complete control and allowing you to identify and address any issues promptly. Cleo Integration Cloud also has customizable dashboards for each user, so you can view the information that’s most relevant to your needs.
   
• Flexible Service Offerings: Choose between transparent managed services, 100% self-service, or our unique blended approach. With Cleo’s team of EDI experts, we're here to help every step of the way. From implementation and onboarding to ongoing support, Cleo ensures you get the most out of your EDI solution.
   
• Limitless Scalability: Cleo Integration Cloud is designed to scale with your business. Whether you're a small warehouse or a large multinational organization, Cleo can handle your growing EDI needs with ease.

Why Choose Cleo Integration Cloud for 3PLs?

Cleo Integration Cloud enables companies to modernize integrations, onboard trading partners quickly, and gain real-time business insights, driving true value. Logistics companies using Cleo's centralized platform discover new revenue streams and greater success. By automating order processes and delivering essential EDI transactions, Cleo helps logistics companies manage customer needs efficiently and outpace their competition.

If you’re looking to create more efficient, streamlined, and accurate warehousing operations, Cleo’s EDI automation can help. Start leveraging Cleo’s expertise and EDI integration solutions today by contacting us at sales@cleo.com, +1.815.282.7695, or by filling out our brief form file. And be sure to explore some of our educational resources through our resource library.