While some companies may not see the need for a tightly integrated supply chain, businesses such as Walmart, Home Depot, Lowes, and Target could not function efficiently without the value added from these systems.
To do business with these companies, you first must be able to produce either through your own systems or through the help of a VAN (like Sterling Commerce) ISO X12 EDI transactions. Paper-based transactions are not allowed no matter the size of your company. In fact, if you start processing EDI with these companies and then fail to process EDI within a certain amount of time, you can be fined up to $150 per document occurrence!
The simplified Supply Chain EDI Transaction "chain" begins and ends as follows:
1.) The Customer (Retail Store) generates a Purchase Order electronically and sends to the vendor as an 850 Purchase Order.
2.) The Vendor (Supplier) responds with a 997 Functional Acknowledgement to show the customer that the vendor received the Purchase Order.
3.) The Vendor picks, packs, and schedules the shipping of the order by sending a 204 Load Tender to a carrier of their choice, requesting the carrier to arrive at the warehouse by a certain time/date to pick up the goods to be transported to the Customer.
4.) The carrier responds by sending a 990 Response to a Load Tender that tells the Vendor whether the carrier accepts or declines the request.
5.) If the carrier accepts the request, the Vendor submits an 856 Advance Shipment Notice to the Customer notifying them of the time and date when the goods are expected to ship.
6.) Once the goods ship, the carrier begins sending a 214 Shipment Status EDI to the Customer and/or the Vendor each time a different event occurs with the truck, i.e. cross-docking, exceptions in routing, departing/arriving at a location.
7.) Finally, following the truck leaving the vendor's premises, the Vendor sends an 810 Invoice to the Customer billing them electronically for the goods provided.
This concludes a brief introduction to the flow of electronic documents for Supply Chain Management.