See improvements in 4 key areas by automating your inbound receiving process using vendor EDI

by Jodi Abrams

The inbound receiving process is not often thought of as an area to be improved with automation. If you dig in though, you will see that there are many time savings to be had by making use of vendor EDI and RF Scanners. With standard SAP functionality, you can quickly see improvements.

4 Major SAP Improvements Realized with Vendor EDI

  1. PO Status tracking

    On a buyers mind after submitting a PO to their vendor is - did they get it? Can they meet the dates? Is the pricing accepted? The fastest and most accurate way to answer these questions is to send your PO via EDI (EDI 850) and request an acknowledgement back (EDI 855). This EDI 855 will contain a confirmation of the requested delivery date an any issues with pricing or availability.

    This can automatically update the PO in SAP with a confirmation, making it easy for the buyer to see that a confirmation has been received, and report on those that haven’t to reduce the number of follow up e-mails and phone calls they need to make.

  2. Accurate MRP

    With the receipt of the order confirmation updating your delivery date, your MRP gets a nudge towards more accurately predicting the delivery of the inventory. Take that up one more level with the receipt of the ASN (EDI 856). This is sent when the arrival date is very firm. Sometimes upon dispatch of a truck, or container arriving at a dock. With this, your MRP gets updated yet again and allows you to more accurately plan to use the arriving inventory.

    Whether destined for production or distribution, knowing the arrival date not only helps you plan to make use of the stock, but also helps you plan your resources around volumes of incoming shipments on any given day.

  3. Automate Receiving using RF Scanning

    One of the major benefits of vendor EDI comes when you pair it with the power of RF scanning. Picture this: The truck arrives and you are handed the Bill of Lading (BOL). You scan the barcode on the document and because you received an ASN which created an inbound delivery with reference to your vendors BOL number, you are automatically ready to receive the product on that truck. Receiving using RF device in SAP
    You unload the first pallet and scan the label that your vendor provided.
    Receiving using RF device in SAP
    It matches up with a Handling Unit (HU) in SAP and what’s inside the pallet is already known. A put away location is determined and the product is moved accordingly. You then continue to scan and put away pallets until it is complete.

    You never need to try to read info off of cartons, or manually key values into a terminal. You've already dealt with any over/under delivery tolerances at the time the EDI 856 was received, so it’s a smooth receipt on the dock.

  4. Vendor score carding

    With changes to the delivery date and quantity possible at the time of the order acknowledgment, the ASN as well as the date the product actually arrives, there are many places for the vendor to get it wrong. Your production or supply chain process is tied heavily to the commitments made by your suppliers. You should be looking for alternatives where possible for those that are not reliable. SAP maintains the original requested date, as well as the commitment by the vendor along the way. You can then use this information along with other factors such as quality of received goods to report on your vendors. SAP can give them a score allowing you to rank them and consider using that information to determine who to purchase from going forward.

  5. Whether you use the whole process described here, or pick and choose a few pieces, even implementing one EDI step can tremendously increase your efficiency in your supply chain and receiving process.

    With input from Walid Ahmed, Corey Herchenroder and Brian Hui.

    About the author: Jodi Abrams

    Jodi is an expert in SAP and eCommerce integration, and is Vice President of Applications for CONTAX.