What Are the EDI Standards? Here’s a Comprehensive Guide!

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Business transactions involve the exchange of documents such as purchase orders and invoices. Manual preparation and sending of such papers can be cumbersome. Humans can introduce errors and cause complications to the business process.

Automation of these procedures contributes to speedy processing, fewer errors, reduced costs, and improved relationships amongst business partners. Parties in a transaction can enjoy these benefits by using Electronic Data Interchange (EDI). EDI is the transfer of business documents between computers in a standardized electronic format.

EDI standards provide a uniform format for conversion and transmission of data in your trucking business. They determine the sequence and position of units of data in an EDI document.

There are many EDI standard formats designed for different types of transactions. Keep on reading to learn more!

Components of EDI Standards

Every EDI standard format comprises of elements, segments, and transaction sets. An element is the smallest constituent of an EDI standard. You can compare it to a word in a natural language.

A segment matches a sentence while a transaction set mimics a paragraph or a document. EDI standards are like reading and writing rules. Elements make segments, and segments create a transaction set.

How EDI Works

EDI is a substitute for email, fax, and postal mail. Documents flow through an application on the recipient’s end, and processing commences. This is different from sending emails since there’s no human effort at any point.

EDI documents have to be in a standard format since they need computer processing. The computers exchanging data must understand the information. It’s like how human beings have to use a common language to communicate.

The most popular method of transmitting messages through EDI is utilizing a value-added network (VAN). The VAN reviews the signal to and routes it to the intended recipient.

A more recent EDI mode of communication is called the Applicability Statement 2 (AS2). It offers Secure Multi-Purpose Internet Mail Extensions and uses Hypertext Transfer Protocol (HTTP/HTTPS) to send data.

AS2 is an advanced version of AS1, a slower method which uses Simple Mail Transfer Protocol. HTTP and HTTPS enable real-time communication between computers over the internet. These EDI standards enhance data security and integrity using digital signatures and encryption.

Examples of EDI Standards

There are many EDI document standards used in different industries. Some are regional while others have international acceptance. Here are four of the most common EDI Standards.

1. ANSI ASC X12

The American National Standards Institute and the Accredited Standards Committee developed the ANSI ASC X12 standards to ease business transactions. ANSI X12 used to support firms in different sectors within North America in the start.

The standards have gained immense popularity across the world. More than 300,000 international companies use ANSI ASC X12. The standards provide a uniform platform for the electronic data transfer.

2. UN/EDIFACT

The UN/EDIFACT is a United Nations EDI standard for Administration, Commerce, and Transport. This is an international standard.

Its further development occurs through the UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business). The UN Economic Commission for Europe oversees the maintenance of this standard.

UN/EDIFACT provides the syntax necessary for an interactive data exchange protocol. It offers standard messages which enable countries and industries to exchange transaction documents.

Europe was the first to adopt the standard, and this makes it popular with companies in the region. There has also been a significant acceptance of UN/EDIFACT in some Asian countries.

3. ODETTE

The ODETTE standards are a creation of the Organization for Data Exchange by Tele Transmission in Europe. The association represents stakeholders in the motor vehicle industry in Europe.

It develops infrastructure and advises on how to enhance the flow of goods, services, and information across the automobile manufacturers. ODETTE has developed useful communications standards like OFTP and OFTP2.0.

4. TRADACOMS

TRADACOMS is one of the earliest EDI standards developed for the United Kingdom’s retailers. It came into being in 1982 as part of the UN/GTDI syntax, a predecessor of EDIFACT. The UK Article Numbering Association used to maintain and improve this standard.

The standard may seem outdated since its development stopped in 1995, but it persists. Majority of the retail traders in the UK today still use TRADACOMS for EDI purposes.

Benefits of Electronic Data Interchange

The cost of paper, printing, storage, reproduction, filing, and postage is enormous. EDI eliminates most of these expenses. The budget for processing and sending hard copies is much more than sending an EDI document.

Manual processing of documents often results in mistakes. They may come as a result of typographical errors, illegible handwriting, and loss of emails or faxes, among other reasons. Using an EDI system improves accuracy and reduces disputes among trading partners.

Error-free processing also saves employee time in reworking orders. It also reduces cases of order cancellation. Automation allows workers to focus on critical tasks which need their attention.

A transaction which requires days in a manual system can take a few hours with EDI. Computers can process and exchange orders and invoices in minutes without human intervention. Typing the documents and sending them by mail or fax requires considerable effort and time.

Shortcomings of EDI Systems

EDI technology comes at a price. All partners intending to communicate using EDI must install the appropriate infrastructure and have a budget for its maintenance. The cost can be high for small traders of firms with minimal technical resources.

Companies with older systems may not be able to generate or accept EDI orders. Some receive orders electronically, print them out, and enter them into their systems.

EDI Standards – Final Thoughts

EDI is a phenomenon which has helped business partners to have quick communication in a secure environment. Electronic transmission of documents saves traders money by eliminating paperwork. The system is doesn’t need human supervision.

Various EDI standards come in different versions. Trading partners must agree on the standard and version to use to exchange documents. Businesses may have to use an EDI translator to interpret EDI documents for processing by internal applications.

Traders who are always sending documents should integrate their business processes with EDI. The long-term benefits of using an EDI system surpass the cost of installation.

We’d love to hear from you, so just reach out to us if you have any question.

Which External Factors Most Commonly Affect Your Supply Chain?

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If you work in logistics, you know that your supply chain is like a machine with many cogs. As efficient as the chain can be when working properly, one wrench thrown into the works can cause massive delays and problems.

Identifying supply chain risks and developing methods to combat them is the best way to avoid disruptions in your daily business. To establish responsible risk management, suppliers must be able to mitigate certain risk factors.

Are you concerned about possible disruptions in your supply chain slowing down your efficiency? Read on to discover potential pitfalls you need to plan for.

Accuracy of Shipments and Delivery Availability

Once you’ve established suppliers, you need to know they can deliver with consistency. Their reliability is key to assessing any supply chain risks they pose.

Sometimes suppliers suffer interruptions in raw materials or parts availability. This can cause an interruption in product flow. Good suppliers partner with reliable suppliers of their own materials.

It is wise to confirm shipment times and frequency, transportation methods, and rerouting standards due to weather. Knowing the supplier’s procedures is crucial to maintaining supply integrity.

Does your supplier ship daily or weekly? Do they use ground or air transport? This information can help you plan for increases in demand and any other needed changes.

Do you know where your product is at all times? Maintaining accurate shipment tracking can keep you on top of any potential issues.

Environmental Risks

These risks are often the hardest to control. The geography of your supply chain can mean dealing with economic, social, and governmental factors. Local laws, threats of terrorism, political changes, and economic flux can all trickle down into your supply flow.

In addition, weather patterns and climate can have a constantly changing impact on your supply availability. While you can’t control the weather, you can invest resources to stay on top of any potential delays.

Business Changes

Much like any business, suppliers can suffer instability through financial or managerial upsets. These hardships can mean supply interruption.

A supplier could be unable to deliver on goods because their business is being sold. Perhaps a financial shortfall makes them unable to produce a product. In the worst cases, these setbacks may mean seeking out a new supplier or negotiating new terms

Facility Risks

The facilities of your suppliers can cause issues if they are ever cited for regulatory violations. If suppliers do not maintain compliance with local rules and laws, their abilities to process shipments may suffer as they work to correct these missteps.

Physical security of their location is also important. Do your partners have appropriate security and storage measures in their facilities? Those without could suffer theft, damage, loss, and more.

A facility that is out of date, in disrepair, or understaffed may not have the capacity to process increases in demand.

Mitigate Your Supply Chain Risks

While external factors create supply chain risks that are outside of your control, a solid plan can help head off any issues before they start.

Working to identify and minimize your greatest risks will keep you from suffering losses when upsets do occur. There are many tools available which can boost your supply chain visibility and help you forecast any possible delays before they happen.

If you’re looking for logistical solutions that will keep you ahead of the curve, try ODYN today. Our analytics platform can help you maintain the integrity of your shipments and optimize your shipment tracking for maximum visibility from end to end.

What is Supply Chain Visibility? Part 1: Operational Visibility

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What “visibility” truly is has plagued the supply chain industry for decades — and while it’s something that the industry talks about a lot (even though nobody really seems to understand what it is) our definition of “visibility” has pretty much devolved to Justice Stewart’s infamous “I’ll know it when I see it.”

That being said, it’s much easier to talk about the operational, financial, and strategic aspects of visibility in the supply chain. So that’s exactly what we’ll do. In this post, the first of our three-part series on Supply Chain Visibility, we’ll focus on the operational aspects of visibility in the supply chain.

 

Operational Visibility in the Supply Chain

Where is my shipment? When will it arrive? Is it being handled properly? Is it in good condition? Is my carrier doing as promised? Will I be notified if an abnormal event occurs? How do I know the information I’m receiving is accurate and timely? If you’ve dealt with logistics in any way shape or form, you’ve probably had to ask these questions. And frankly, in order to have visibility into the areas you can’t control, the best option is to affix a tracking device onto your shipments.

There are many different options for devices to track your shipments including RFID, WiFi, Bluetooth, Cellular, and Satellite devices. Let’s take a deeper dive into each tracking solution.

RFID tag

RFID

RFID tags are cheap, about $0.25 or less, but the RFID reading infrastructure can be prohibitively expensive. Ever facility that you try to wire up will cost hundreds of thousands of dollars, if not more. The facilities that you do wire up must be under your control, which is a contributing factor as to why the technology never really took off, even after Walmart mandated it.

Satellite

Satellite on the other hand costs hundreds of dollars per device, and there’s also a monthly satellite fee on top of that. It’s a great way to track shipments but it’s only economically feasible for high value goods that you need to see all the time. This is why it’s taken off in reefer tracking.

 

 

Cellular

Cellular tracking is somewhere in the middle between RFID and satellite. It’s still a little expensive, around $50-$100 per device (sometimes more), and you also have to pay a monthly cellular fee – just like you do for your cell phone.

Bluetooth + WiFi

Bluetooth and WiFi devices are the emerging tech in shipment tracking. Bluetooth is relatively low cost, at around $10 per device. However, it still requires some infrastructure, think of the Tile devices that some people use to find their car keys or tv remote. The infrastructure required isn’t too expensive but it still requires additional manpower (which ends up adding a lot of cost — we’ve even seen people walk around with BLE scanners).

WiFi on the other hand costs even less, potentially as little as $5 per device, and may not require any additional infrastructure. We’re a little biased, considering that we’ve built our whole company around this, but we’re all about saving you money. And when you don’t have to spend anything on infrastructure, that helps.

IoT Alternatives

There are also some built in tracking solutions to trucks (ELD/GPS-enabled telematics), airplanes (ADS-B/ACARS), and ships (AIS). These solutions will allow you to track the shipping mechanism’s location but environmental and tampering data doesn’t usually exist for those devices. There are various data aggregators that will give you access to the data, for a fee.

 

 

Every option has benefits as well as downfalls and each company must decide for themselves which is the best and if the unit economics make sense.

 

What next?

Once you have decided on a device to track and relay information about your shipments, you need to decide what kind of additional information is important to you. There are all sorts of sensors out there that can be included in the tracking devices. Sensors can track temperature, humidity, acceleration, vibration, shock, etc. There’s even a sensor on the market to help determine if the container you are shipping goods in overseas has been opened or tampered with during transport.

There are many ways you can apply the knowledge you are gaining from the data once you start capturing it (although we highly recommend you decide on a use case before choosing an asset tracking provider).

Example use cases

1) Inventory optimization/synchronization

Once you are tracking a statistically significant number of your shipments you can start optimizing your inventory. You can answer questions like “Where in my supply chain do I have the longest dwell times?” and “Are certain distribution centers performing better?” When you see where inventory is being built up in your supply network and how long it is sitting at each node, you can then determine if you have enough inventory in your end to end supply network to satisfy demand for a specific period of time. This allows you to hold off on manufacturing additional unnecessary inventory, therefore reducing waste and loss.

As a manufacturer, seeing into the retail supply chain and your raw materials supply chain is incredibly valuable as it allows for synchronization from where the raw materials were sourced to the final point of retail. As you build up inventory, you can see how your retailers are consuming it so you end up building up just the right amount. A truly synchronized supply chain has enough inventory to keep high levels of customer service (low out-of-stock) while keeping low levels of in-transit inventory. You’ll be able to determine when raw materials will arrive at your manufacturing center and reduce the risk of disruption due to delays. Synchronization leads to low leads times, which in turn decreases working capital costs and increases efficiency. Being able to trace end-to-end allows for this.

2) Loss (time + shrinkage)

When considering loss, keep in mind that loss can be anything from lost or stolen goods, lost time, and wasted working capital. By tracking your shipments you will be able to determine exactly where the black holes in your supply network are, determine if goods are being lost or stolen, and see where you are losing time.

There are enormous implications for food safety when tracking perishable shipments. Remember that big romaine lettuce e-coli outbreak and recall? That all could have been prevented if it was easier to determine exactly where the unsafe lettuce originated. Now let’s look at other perishables like refrigerated steaks. Often the high temperate threshold will only make the food unsafe if the environment has that temperature for a certain period of time. The current solution of temperature tape, which will show the highest temperature reached, does not show for how long the environment was at the temperature. Using an asset tracker or temperature logger will allow you to prevent throwing out pallets of steak when they are in fact, safe. On the other hand, say the temperature did reach unsafe temperatures for an extended period time. Within a pallet there are many cases of steak. You will be able to determine if all the cases need to be destroyed, or if just the outer cases are unsafe and the inner cases never reached the unsafe temperature because they were insulated from the heat by the outer cases.

3) Customer service

It’s incredibly frustrating to hear that your customers received damaged product, and that eventually increases your insurance costs. By tracking shipments you will be able to see exactly where damage occurred whether it’s because the environment was too hot, too humid, or your shipment was jostled and experienced a high level of shock. You can also show carriers precisely where damage or out of bounds (bounds that you previously specified) events occurred, if your carriers are performing as promised, and which carriers, trade lanes, warehouses etc. pose the highest risk to your shipments.

You can increase the efficiency of your operations (and increase customer service level) by utilizing predictive ETA’s. Now it will be easy to ensure slot availability for trucks, manage delays before they become problematic, and ultimately keep your customers happy by giving them insight into when their shipments are arriving.

4) Quality control

The last use case I will leave you with today is quality control. Being able to monitor the environment of a shipment throughout it’s lifecycle allows you not to remove it from the supply chain for testing. If you can remove a day of checks, that’s one less day that inventory is on your books. Some companies that provide asset tracking devices will allow you to set alerts for anomalous or out of bounds events, so you know exactly when and where each shipment had some sort of a problem.

 

Takeaways

The most important thing to take away from this blog post is that if you can measure it, you can manage it. Being able to measure your supply chain and it’s performance will help you make better decisions and allocate funds and resources in the best ways possible.

If you want to see how ODYN can help increase your operational visibility, we’ve recently reduced our Quickstart package to just $499 — get started today! Or if you want to get in touch with our sales team, schedule a meeting here or contact us on our contact page.

Inventory in Transit 101: Everything You Need to Know

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How well are you tracking your shipments? If you have to pause before answering this question, chances are this is an area for improvement.

Inventory in transit can sometimes lead to accounting- and financing-related dilemmas if you don’t effectively track it.

This is why we’ve compiled a comprehensive guide on everything you need to know about inventory in transit and why tracking is a must.

Let’s jump in!

What Exactly Is Inventory in Transit?

Inventory in transit refers to goods that are going from certain companies to other companies — for example, wholesalers to retailers — but that haven’t reached their destinations yet.

These transactions can take a while to occur, particularly if manufacturers are shipping large numbers of items to wholesale suppliers or retailers.

A major question that might crop up when goods are being transferred is at which point the ownership of the goods is transferred from party A to party B.

There are two types of transfers of ownership:

One is called freight on board, or FOB, shipping point. In this situation, party B takes ownership of the items at the place from which they are shipped.

The other type of transfer is called FOB destination. Here, party B takes ownership once it receives the goods at the intended destination.

Accounting Implications

The kind of transfer that takes place has an impact on how your business records that particular transaction.

In the FOB shipping point situation, the transaction can be recorded as a business sale starting from the shipment day.

Meanwhile, in the FOB destination situation, you must wait until the recipient takes ownership of the goods sold at the appointed destination.

This is especially critical to get right if it means that a transaction started in a certain month or year may end up being completed in the following month or year.

Financing Implications

Inventory in transit can also have financing implications.

For instance, let’s say that a buyer tries to use purchased goods as collateral for gaining financing to complete extra business operations.

A lender may decide to issue a loan with the expectation that the appropriate amount of goods will reach the buyer at a certain time. However, the lender must first do its due diligence to make sure that this will actually happen. Otherwise, the buyer may end up defaulting on the loan.

How We Can Help

We offer top-of-the-line shipment tracking software that provides the total end-to-end shipment visibility your company needs. Our goal is to help you to easily track and analyze how your shipments are moving across the globe.

We use a combination of public, private and proprietary datasets to get the job done.

For example, we look at weather data to determine how the environment may impact your business’s supply chain. We also look at warehouse management system data to determine the behavior of your business supply chain’s nodes. And even the performance of carriers in your supply network.

Get in touch with us to find out more about how we can help you to stay on top of your inventory in transit.

4 Tips to Achieve Supply Chain Visibility

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Supply chain visibility, or SCV, is more than a buzzword.

It’s a concept that impacts companies in every industry. That’s why research shows that it is becoming an increasingly critical strategic priority among firms. It’s what every company with logistics processes always aims for.

Total SCV, however, is easier said than done.

Here are four tips to achieve SCV in 2018.

Let’s get started!

1. Answer This Important Question about Supply Chain Visibility

Before we talk about how to achieve SCV, it’s critical that you ask yourself what this term even means.

Simply put, the visibility of the supply chain refers to the traceability or trackability of the orders and shipments of your products from the source of production to the proper destination.

Included in this are logistics activities as well as the milestones and events that occur before and during transit.

The goal of SCV? To empower and enhance your supply chain simply by making it easier for stakeholders to access information related to it easily.

With the right tools, you can acquire precise, real-time information concerning delivers, stock and orders in your outgoing and incoming networks.

The more you fully understand SCV, the easier it will be for you to help your company’s suppliers to comprehend how everyone involved benefits from enhanced visibility.

2. Collaborate with Suppliers

So, you’ve explained the value of the visibility of your supply chain to your suppliers. Now, you should work with them so that you both better understand what information you both need to enhance the services you offer to one another.

These key insights and metrics will serve as the foundation of your SCV.

3. Analyze Your Partners’ Systems

Now, it’s paramount that you analyze the systems that each of your supply chain partners uses in-house.

The purpose of this analysis here is to identify any gaps that must be resolved to enhance the flow of information locally.

4. Tap into Industry Expertise

Finally, get in touch with a company that specializes in improving SCV.

Look for a company that will provide for you a comprehensive picture of your company’s shipments down to individual pallets. This will ultimately allow you to maintain the integrity of your shipments and thus a high company service level.

How We Can Help

We take pride in our ability to help our customers to monitor the environments and locations of their shipments around the world.

With our help, you can gather the exact data you need to determine the performance of various trade lanes.

This will help you to improve your supply chain’s performance and understand future demands. As a result, you can decrease your inventory whenever you expect demand to be low. And in turn, you can more quickly respond to potential problems and improve your on-time deliveries.

Get in touch with us to find out more about how our supply chain visibility solutions can help you to optimize your business planning and demand forecasting. With our assistance, you can operate more efficiently and thus generate more revenue this year and beyond.

What is EDI and How Does it Impact the Visibility of Your Business?

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In past years, auto and retail companies commonly used EDI.

Now, however, all companies are almost at a disadvantage if they don’t use EDI. Industries like manufacturing, construction, and healthcare have all incorporated some form of the system.

But just what is EDI?

Have you been hearing about EDI, but aren’t sure what it is or if it’s right for your business? Be sure to read on to learn more.

What Is EDI?

EDI stands for electronic data interchange. Put very simply; it’s the electronic exchange of data between computers and businesses.

EDI helps businesses move away from paper-based systems to a digital process that’s more efficient with less room for error. Often, the documents exchanged via EDI are things like purchase orders, invoices, inventories, or shipping status documents.

Isn’t That Just Email?

When people first hear the definition of EDI, it’s easy to get it confused with emails. After all, that’s also an electronic exchange of data, right?

The most significant difference with EDI, however, is that it completely removes people from the equation. When using email, there has to be an employee who originally sends a purchase order, another employee who receives the purchase order and sends an invoice, and yet one more who pays the invoice.

Businesses that use an EDI system, on the other hand, don’t have to worry about any of that. It’s a computer-to-computer process, so once the initial request is created, the computers handle the rest.

EDI documents automatically go right to the corresponding application on each computer, making processing easy. For companies who need to manage large orders on a daily basis, this is incredibly valuable.

How Does It Work?

Each EDI document has to be written in a specific, standardized format. This helps to make sure that no matter what programs each business is using, each computer can still interpret the information that is being sent.

Without using a standardized format, you’d get a lot of unintelligible code instead of an invoice you can actually read.

Unfortunately, there is more than one standard in use today, so each business should agree on the standardized format to use before beginning to use EDI. Two of the biggest formats are ANSI and EDIFACT.

The person initiating the EDI will write the business document according to the rules of the standardized format and then let the computers do the rest. Both formats will do the job for you, though ANSI is further concise.

Businesses can do this all in-house, or they can use an outside provider.

How Does It Help With Visibility?

Instead of having to wait for someone to confirm that they’ve received an order, or making calls to discover the status of an invoice, incorporating EDI means you can track the status of orders in your supply chain.

You can get status updates with minimal hassle (from carriers who have enabled/integrated EDI), enabling you to make better and faster decisions.

Find More Ways To Track Your Shipments

Now that you know the answer to the “What is EDI?” question, you can decide if it’s right for you. EDI isn’t always a good fit for every business. Luckily, you can get the same (if not better) level of visibility without EDI integration.

With ODYN monitors, you can get a clear picture of all of your shipments, from the big picture to an individual pallet. They’re easy to install and even easier to use. Find out how it works or contact us to talk to one of our team members.

Everything You Need to Know about ELDs and Trucking

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What if you were risking a costly fine every time you drove your truck on the job?

A recent government mandate requires all truckers to use Electronic Logging Devices (ELDs). However, most truckers don’t know the exact government requirements, which means they may be violating this mandate without even knowing it.

Don’t worry, though. We’re here to save you time and money with our comprehensive guide to ELDs and trucking!

What Is the Mandate?

Essentially, every trucker who must prepare hours of service records of duty status must now use an ELD. Such ELDs must meet government standards for design and performance and registered with the FMCSA (Federal Motor Carrier Safety Administration).

The mandate also requires drivers and carriers to maintain and keep relevant ELD records. And on a bright side, the mandate protects drivers from discrimination or harassment based on the recorded ELD data.

Are They Expensive?

Truckers with long memories may fear ELDs being really expensive, as fleets once had to pay over two thousand dollars for a single electronic logging system twenty years ago.

However, official estimates for modern ELDs are that they will be under $500 per vehicle on average. And while no one likes an added expense, these systems do not represent a significant additional cost per vehicle.

Carriers may be able to get significant savings by exploring trusted vendors for different pricing options.

Will It Be Distracting?

Some truckers are understandably worried about safety on the road. They worry that having to interact with these devices on the road could lead to delays or even accidents.

Fortunately, that is not the case. Truckers primarily interact with the ELDs when the vehicle is at rest, like when they indicate that they are off duty or sleeping. Otherwise, the system automatically keeps track of driving hours without any interaction from the driver.

As a bonus, most ELDs offer an audio function. This offers features such as countdowns of hours left and a reminder that truckers have enough time to reach a parking place before hours run out.

Will It Affect Inspections?

Skeptics often wonder if ELDs will slow down safety inspections. Alternately, they may worry if such systems could cost them their jobs by automatically reporting violations.

Fortunately, this is just a myth. The ELD is merely a technological replacement for a paper logbook, and it has no way of automatically reporting a violation.

One benefit of ELDs for trucking that drivers often enjoy is that it speeds up roadside inspections. This is because inspection officials can quickly review ELD data and then get the driver back out on the road.

Is It Worth It?

Earlier, we discussed how individual ELDs do not cost that much. Nonetheless, drivers and carriers alike often wonder: Are they actually worth it?

In a word, yes. Such systems promote driver safety and ultimately save lives, which is good in and of itself. And being able to monitor drivers and their behaviors can help carriers create more efficient procedures that boost their bottom line.

ELDs and Trucking: The Bottom Line

Now you know about the importance of ELDs and trucking. But do you know where to get the best prices on ELDs themselves?

At ODYN, we’re all about saving logistics professionals time and money. To see what we can help you save, contact us for a quote today!