EDI Academy – Despatch Advice

EDI Academy – Despatch Advice

The use of electronic data interchange in business transactions has led to the creation of a plethora of different messages over the years. From all of them, today we dedicate this issue of EDI Academy to one of the most relevant, for both suppliers and distributors: the Despatch Advice.

 

What is 856 ASN?

The 856 ASN designation is the name given to the EDI shipping note message in X12 standard, the language most widely used in the US market. The letters ASN stand for Advance Ship Notice. However, this is not the only terminology used to define waybills or shipping notes. In the EDIFACT standard, widely used in Europe, it is known as DESADV or Despatch Advice.

In any case, all these designations refer to the same concept. The EDI despatch advice message serves to verify that the goods received by the customer match the purchase order. 856 ASN displays the contents of the package and some added shipping information. This includes the order data, item description, product features, packaging type, markings, freight operator information and the layout of the goods within the transport equipment.

One peculiarity of the despatch advice is that it can be as simple or as explicit as required by the business transaction being carried out. For example, a brief version includes reports on the sender of the package, the receiver, delivery time, products shipped broken down line by line and identified with a code (usually EAN, GTIN or SKU) and the quantity of each item.

However, it is also possible to issue a more complete ASN or DESADV, including additional information such as a list of all the products on the pallet with the batch codes, corresponding expiry dates and packaging numbers, among other details. This option is increasingly popular among businesses nowadays, as the traceability is better.

 

How does the Despatch Advice work?

For a better understanding of how 856 ASN or DESADV work, we’ll explain step by step the communication flow followed by this EDI message:

  • The supplier issues the customer (distributor) a despatch advice when the goods are ready for shipping.
  • The EDI solution from EDICOM integrates this message into the distributor’s ERP automatically so they can access it easily.
  • At a glance, the client compares the despatch advice with the initial purchase order, as both documents are traced and any differences will be obvious. In fact, this confirmation can be performed automatically by the platform.
  • If everything is correct, issues a confirmation note to the supplier.
  • The warehouses receive the information on the new items due to arrive, so they can plan the loading and storage in advance.

 

What benefits do we get from the despatch advice?

The use of 856 ASN provides considerable advantages for both suppliers and distributors. On one hand, suppliers improve the goods delivery management process. With this message they are able to announce the shipment to their customers beforehand, but they also have a document endorsing the goods being delivered.

On the other hand, distributors can make their stock controls and incoming order processing more efficient. This is due to total traceability throughout the process, which lets us know when the goods will be sent, when they will arrive and all the details of the shipment.

To these advantages are added the benefits obtained in general from using EDI, ranging from automation to economic cost savings.

Italian fashion industry joins EDI

L’EDI entra nel settore della moda italiano

The fashion industry is a key factor for the Italian economy, both for its level of turnover and the exports produced, mainly to the United States and Europe. In 2014, export sales generated 398,000 million euros, a record at the time. In addition, the figure forecast for 2016 is likely to reach 450,000 million euros. This internationalization is one of the sector’s principal defining features and has encouraged the spread of electronic document interchange (EDI) among fashion firms.

However, it is not the only one. In this area, beyond the challenge of communication across borders, companies handle a wide range of products. Everything ranging from sports clothing to footwear, through accessories, kids’ clothing and infant wear, to the high-end luxury brands. In this sense, EDI technology has also become an ally against the lack of uniformity in the sector.

How does EDI work?

With electronic data interchange, communications between different IT systems are standardized. This means that transaction and information sending take place in real time, automatically and safely, regardless of the features of the partners involved in the business or logistic relations.

In Italy, the spread of EDI throughout the fashion industry has mainly been driven by the big stores, such as Saks, Neiman Marcus, Harrods, La Rinascente, Printemps, El Corte Inglés, etc. These international brands usually act as a hub and require their suppliers to use this technology for the exchange of business documents like orders, shipping notes or invoices, as well as others of a logistic nature, such as product catalogues.

This is why so many Italian businesses of all shapes and sizes have signed up to EDI, a virtually indispensable requirement when exporting. But beyond the requirement, adopting EDI technology in B2B companies is now a key factor in optimizing logistics processes, boosting productivity, reducing the number of errors and, finally, maximizing efficiency through task automation.

A global solution

Some of the big brands already rely on EDICOM to implement their EDI solutions. To name but a few, Harrods, Cortefiel, Printemps or El Corte Inglés, four of the main fashion market hubs. This experience has enabled the EDICOM team to develop a Global EDI solution, which addresses the two needs of businesses in the sector: internationalization and product heterogeneity.

The EDI solution is integrated with the companies’ internal management or ERP systems. This way, the entire administration and logistic process is handled from a platform already known to the team, so there is no need to modify in-house working procedures. For example, when an invoice is generated, the EDI solution processes it automatically, translates it into the standardized language required by the partner and forwards it. This happens the same way with any other business, logistical and administrative transactions. Both in sending and receipt, all the processes are automatic, thus boosting efficiency and cutting economic costs.

EDI ACADEMY – Value Added Networks (VANs)



In the second issue of EDI Academy, we explained that one of the key elements when setting up an EDI relationship is the communications system. There are currently several options available for transferring information, but the most widely used of all are designated value-added networks, also known as VANs by their initials.

What are VANs?

VANs are secure data exchange networks between companies. Unlike other alternatives, their use is not linked with Internet, as they came about at the same time as EDI emerged, when this technology was not yet widespread in society.  Nevertheless, they continue to be the option most widely used by companies. This is because many operators, like EDICOM, provide value added services such as back-office integration, the possibility of subcontracting communications management (EDI Outsourcing), safekeeping, etc.

The way value-added networks operate is very simple. Trading partners can send and receive documents from their platform just as they would an email. However, the entire process is carried out under stringent security conditions to ensure the integrity and inviolability of the data. The network constantly checks the partner identity and validity of the message.

Another significant advantage is that the partners involved receive notifications whenever they have a new document, when the one they have sent is delivered and when it reaches the recipient. Bear in mind that with this communications system traceability is assured, with tracking throughout the process.

EDICOMNet, the EDICOM VAN

Today, EDICOMNet is one of the most powerful VANs in the world. Each year, the network handles around 300 million transactions, from more than 12,000 trading partners worldwide. This is because it is a multi-protocol and multi-standard VAN, which lets you exchange any document regardless of the format it is in or the partner features. In addition, there are other added benefits:

  • Global interoperability. EDICOM has interconnection agreements with the principal VANs worldwide (IBM, GXS, LIAISON, etc.) to ensure interconnection of all users with any trading partner.
  • Cutting economic costs. EDICOMNet has a flat-rate model for users connected to the
  • Thanks to automation, grouping of processes and data compression, transmission of documents takes place immediately.
  • Prioritizing messages. VAN users have the option of setting up delivery or sending preferences depending on the type of transaction.
  • High Availability. The service is available 24 hours a day. In addition, EDICOM is committed to complying with 99.9% availability of its services in a signed SLA.

Want to know more about EDI? Check out all the posts in our  EDI Academy series. In the next instalment, we take an in-depth look at the importance of interoperability.

 

EDI Academy – AS2 connections


In the latest issue of EDI Academy we are discussing the los communication protocols most widely used in the area of B2B. This time, we want to go a step further and focus exclusively on AS2 connections. This type of communication is increasingly widely used due to its special security conditions and the facilities offered by internet.

What is AS2?

An electronic communication standard via internet that came into being in 2002, with the spread of the World Wide Web. Through it we can exchange all kinds of documents securely, using the https protocol, with encryption and digital signature. This ensures data integrity, privacy and authentication.

These conditions have allowed the use of AS2 connections to expand into several sectors, such as retail or the automotive industry. Bear in mind that, as in any EDI relation, it makes no difference which type of message we need to send, or its format. In AS2 communications it is also possible to include mapping processes (translation) to adapt the documents to the standards required by partners.

How does it work?

We could say that AS2 works in a similar way to a telephone call, but via internet and applying these security constraints mentioned earlier. The sender can initiate the transaction from anywhere with network connection. However, to make communication possible, the receiver must be available and connected at the same time.

For this reason, the majority of businesses decide to outsource the service to a service provider like EDICOM, which is always on the alert, ready to send or receive any document. So, with a specialized solution it is no longer necessary for members of a business relationship to remain connected simultaneously to exchange their data. This way, it is possible to maximize the system’s advantages.

What are the benefits?

As in any EDI communication, companies can exchange their documents more securely and automatically. This lets them increase savings and boost productivity. But in addition, AS2 connections have the advantage of being extremely flexible, so they can be adapted to any sector or size of business. We must also take into account that in this case the communication is even more reliable and the economic cost lower than in other types of connection.

Moreover, the EDICOM AS2 Server solution adjusts to meet each company’s needs. Small businesses can connect to the server through EDICOMNet, without having to carry out maintenance, administration or configuration tasks in their local network. However, larger sized companies have the option of installing the in-house solution to be able to quickly set up secure point-to-point communications with their customers, with no need to have a mailbox in the EDICOMNet network.

 

Shared Services Center – How to adapt to tax compliance in LATAM?


More and more multinationals around the world are deciding to centralize their tax systems and operations through what are designated Shared Services Centers. The aim is to enhance efficiency and save on economic costs. However, many of these centers find it hard to comply with certain regulations, such as electronic invoicing or e-accounting, especially in Latin American countries.

Mexico, Brazil, Chile and Argentina already require taxpayers to use e-invoicing to prevent tax evasion and boost efficiency. Other countries, such as Colombia, will also be rolling out this system in the near future.  The difficulty for Shared Services Centers is that each of these regions demands very different technical and fiscal requirements. Moreover, the standards change and evolve periodically.

How can Shared Services Centers adapt to tax compliance in Latin America?

Think of a multinational that has centralized its systems in a Shared Service Center and has to provide service to its subsidiaries in Mexico, Brazil and Argentina, for example. To streamline tax compliance (invoice, payroll, e-accounting, etc.), EDICOM offers the centers the option of outsourcing these processes through the Global e-Invoicing platform.

The way it works is really simple. This solution is integrated with the centralized information system of the multinational, automating the issuance, delivery, storage and sending of electronic invoices, in accordance with the legislation in force for each subsidiary. The platform is adapted to the requirements of more than 60 countries worldwide. In other words, a single solution is enough to operate in any region.

Bear in mind that thanks to the work of the Permanent Observatory on e-Invoicing, the Global e-Invoicing platform is constantly updated whenever any regulatory change takes place. It also gradually includes the new countries that decide to join this technology. This way, Shared Services Centers always have the guarantee of full compliance with the requirements and regulations of each of the company’s subsidiaries without needing any modification.

With this platform, multinationals can take maximum advantage of the benefits of e-invoicing. In addition, it is possible to achieve the savings and efficiency initially foreseen when rolling out their Shared Services Center.