Electronic Data Interchange (EDI) refers to the electronic exchange of business documents between two different computer systems in a standardized format. This automated process replaces traditional paper-based communication, making transactions faster and more reliable. Within supply chain management, the EDI 856 is a widely used electronic document for maintaining visibility and control over inventory movement.
What Exactly is the EDI 856?
The EDI 856 is the transaction set formally recognized under the ANSI ASC X12 standard. Universally known as the Advance Ship Notice (ASN), it serves as the electronic equivalent of a detailed packing slip or manifest. The defining characteristic of the 856 is that the seller or shipper transmits it before the physical goods arrive at the buyer’s location.
The ASN provides a complete description of the shipment’s contents, including details about how the products were packaged and organized. This advance information allows the receiving facility to prepare systems and personnel for the incoming delivery. Pre-notification is a standard requirement for major retailers and distributors who rely on automated receiving processes.
The Role of the ASN in Logistics
The EDI 856 synchronizes the physical movement of goods with the digital flow of information. Receiving facilities rely on the ASN to gain advance visibility into every incoming shipment, enabling proactive resource management. Warehouse managers can pre-plan labor allocation, staging areas, and equipment needs based on the delivery reported in the 856.
The ASN is foundational for modern logistics strategies, such as Just-In-Time (JIT) inventory systems and cross-docking operations. For example, in cross-docking, the contents of an incoming truck can be identified and routed to an outbound truck without being stored. The Advance Ship Notice transforms the receiving dock into a highly efficient, planned operation.
Key Data Elements Contained in the 856
The structure of the EDI 856 is complex because it must reflect the exact physical configuration of the goods being shipped. The document uses a hierarchical structure, layering data to show the relationship between the shipment, the order, the packaging, and the individual items. This hierarchy provides granular detail about how the products are physically organized inside the trailer or container.
Shipment Level
This is the highest level, including global data like the carrier name, the total shipment weight, and the unique Bill of Lading number.
Order Level
Nested beneath the Shipment Level, this identifies which specific Purchase Orders are included in the shipment. A single 856 can contain multiple Purchase Orders, linking the shipment details back to the original demand.
Packaging or Tare Level
This level describes the specific shipping units, such as individual cartons, containers, or pallets. This data is often linked to the physical Serial Shipping Container Code (SSCC) barcode labels placed on the packaging, which the receiving party will scan upon arrival.
Item Level
This provides the lowest level of detail. It identifies the specific product SKU, the quantity shipped, and often includes tracking details like lot or serial numbers for traceability.
The Workflow: When and Where the 856 is Used
The transmission of the EDI 856 is a precisely timed event that occurs when the supplier finalizes the shipment. Once the goods are packed, labeled, and loaded onto the carrier’s truck, the supplier’s system automatically generates and sends the 856 transaction. This document is typically routed through a Value Added Network (VAN) or a direct connection to the buyer’s internal system.
The electronic notification must arrive and be processed in the buyer’s system long before the truck reaches the receiving dock. For shipments with short transit times, the ASN is expected to be sent immediately upon departure. This timing ensures the receiving system is updated with the shipment’s contents, allowing the buyer to plan for the receipt of the goods.
Benefits of Implementing the EDI 856
The implementation of the Advance Ship Notice yields substantial operational and financial gains for both the supplier and the buyer. For the receiving party, the 856 eliminates the need for manual data entry at the dock, as the electronic document automatically populates the inventory management system. This automation improves the speed and accuracy of the receiving process, reducing the time required to move goods from the truck to the warehouse floor.
The accurate data exchange also helps suppliers avoid costly financial penalties known as chargebacks, often levied for non-compliance or inaccurate shipment information. Furthermore, the advance notice supports improved inventory accuracy by providing a near real-time snapshot of products in transit. This visibility reduces the need for maintaining excessive safety stock and lowers overall labor costs.
Relationship to Other Key EDI Transactions
The EDI 856 operates as a fundamental link within the standard “Order-to-Cash” cycle. The process begins when the buyer sends the Purchase Order (EDI 850). The supplier then uses the 856 to advise the buyer that the goods ordered on the 850 have been shipped.
This integration allows the buyer to perform “blind receiving,” where the system automatically validates the incoming physical goods against the ASN data without requiring a manual count. Once the goods are received and reconciled, the ASN information supports validating the Invoice (EDI 810). The 856 thus forms a leg of the crucial three-way match, confirming that what was ordered (850) was shipped (856) and is now being billed (810).