| ASN Reality or Myth |
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| Written by Administrator | |||||
| Wednesday, 01 July 2009 | |||||
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Over the years I have written quite a few times about the ASN. I have shared the varying structures adopted by retailers (good or bad), I've shared the do’s and don’ts of using (mis-using) the ASN, and I have shared why companies are interested in having their partners use the Advance Ship Notice. So I thought I’d review some of those items again over the next couple months. Back a year ago this past February, I wrote about the ASN for the first time. Back then I was aware of the growing interest by retailers and distributors to trade using the 856 transaction. Since then, I’ve see a 40% growth in the number of companies deciding to move in that direction. Included in that increase, is slow growth in companies in the Grocery Industry that are now hoping to trade this document with their partners. In retail and general merchandise companies, the ASN has been around for some time. These companies have come to realize that the ASN provides both shipment visibility and receiving efficencies. Grocery is now realizing that the ASN may not work for all business relationships and fullfillment models, but they can still participate with some portion of their business as their counterparts have. Visibility - In the early days of the use of the 856 EDI transactions, many retailers and distributors were having suppliers send the ASN in advance of the shipment's actual movement from the ship-from location. This provided the opportunity for them to know that the shipment is ready for shipping/delivery, what is on that shipment, estimate when the shipment will arrive so they can determine the labor resources to unload the orders, use the information for building inbound loads, and determine if the supplier is shipping orders or items that had previously been canceled. The unfortunate consequence was that, too often, what the 856 indicated was not actually on the trailer. You would not expect that to be an issue, as suppliers were building the ASN as they were staging the cartons/pallets for shipping. What was found is that when a carrier would arrive at the pick up point, information provided by other suppliers for previous “stop points” were in error. As a result, the trailer was in an overflow condition. That meant that some cartons, or even pallets, were left behind and would need to be included in another shipment. A new ASN EDI transaction would be sent (for some retailers this would be considered a duplicate) or have the merchandise included on the next trailer bound for that retailer, so that eventually the “shortage” would be cleared up. Over the past few years, the definition of Advance Ship Notice has changed so that the EDI 856 transaction is now needed shortly after the shipment is in motion, thus arriving in “Advance” of the physical shipment, and correcting the overflow situation. In addition, these partners introduced other EDI transactions such as the 204/211 (Bill of Lading) and the 753/754 to assist with load visibility and optimization. As retailers/distributors continued to add partners to the use of the ASN data, they found that not all shipments/orders are created equal. With each method of distribution, there was a need for a different usage of the ASN. For example, shipments being delivered to a partner’s facility such as a Distribution Center, have different requirements than do shipments to a store. Some retail organizations have an “inventoriless” arrangement with a supplier (Direct to Consumer shipments), which also has different requirements. However the need for visibility, regardless of order type, was still a necessity. Next month I’ll share what the differences are, why they are important to a buying organization, and how the varying order models and data requirements differ. Efficencies - So why are these companies wanting their partners to trade the ASN? Many times I’ll hear from a supplier how frustrated they are that their partners, with whom they’ve have done business for decades, are now asking for this information and they can’t understand why they need to participate as things have been working all along, “What’s in it for me?” I see their point; with other EDI transactions there is typically some business transaction that the data represents, such as a Purchase order or an Invoice. The Advance Shipment Notice does not really have a matching business document that is being replaced, with the exception of perhaps the Packing Slip. But that is up for debate, as many retailers are still requiring the printed packing slips. What I shared with my supplier clients is that providing the information on an ASN does provide them value. That value is the ability for their customers to get the merchandise that has been shipped into their customer’s hands. Retailers' and Distributors' function in the supply chain is to distribute/sell a supplier's product, whereby both organizations can make a profit. For a supplier, having access to the multitude of consumer facing selling options is priceless. The quicker products are made available for the consumer to purchase, the more those products can be sold. In addition, if the retailer/distributor is able to reduce the cost of handling those products through their processes, the lower the cost to the consumer, and the lower the consumer price. In theory, the more products will be sold; Basic Economics. Next month I’ll go into what the efficencies are, and some ROI scenarios that may assist those that are considering adding the ASN to their EDI program, or for suppliers that are now being asked to participate in these initiatives. Long of the story is; “ain’t no myth”….. it’s real…. and it’s important. Watch for next month’s article for more information. Marlow | |||||
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