Automating the process of ordering and supplying products with EDI

The Order-to-Cash Process

Ordering, delivering and paying for goods is what most companies do in the run of their day-to-day business. Finding ways to automate that process, through the use of technology solutions and GS1 standards, can make it faster, more efficient and cheaper for everyone involved.

Order-to-cash is the term used to describe the process where goods are:

• Ordered
• Delivered
• Received
• Invoiced and paid for

Many organisations, from commercial businesses to public sector and service organisations, have automated the process using Electronic Data Interchange (EDI) and GS1 standards.

Most importantly of all EDI offers the option of automatically reconciling orders, deliveries and invoices which eliminates many time-consuming and error-prone processes.

Processing orders, delivery dockets and invoices with EDI

Large numbers of documents are required for the order-to-cash process to function effectively, including purchase orders, invoices, delivery notes or, as they are commonly called, Advanced Shipping Notices (ASNs).  In a competitive economy, you cannot operate efficiently if you use manual, paper-based processes for handling these documents. For example, many leading retailers will not even purchase products from suppliers if they cannot communicate electronically with them.  There’s a crucial need for a fast, accurate, efficient and cost-effective solution, no matter what size you are or what sector you operate in. Electronic Data Interchange (EDI) provides that solution. 

What is EDI?

EDI is essentially the exchange of standard electronic business documents between two companies by computer. It replaces paper-based documents with electronic ones. The sending company creates the electronic message and the receiving company interprets it, without the need for any human involvement. Any business can use EDI and take advantage of its speed, accuracy, efficiency and cost savings.

A beginner's guide to electronic data interchange

The benefits of using EDI

There are huge benefits to be gained from automating each stage in the order-to-cash process

• It's faster, significantly increasing transaction speeds and reducing delivery lead times
• It's more accurate, minimising human intervention and rekeying of data, meaning fewer delivery errors
• It's cheaper, as fewer human resources are required, errors are eliminated and time is saved in the ordering and delivery processes

What GS1 standards are used in EDI?

GS1 standards can be grouped into three categories:

• standards for the identification of items including products, services, locations and assets
• standards for data capture - this includes a variety of barcode symbols and RFID tags
• standards for data sharing which define how data is structured, stored and exchanged

Typically within the EDI process you will commonly find the following standards:

• GS1 identifiers for products - called the Global Trade Item Number (GTIN)  - used to identify consumer products and outer cases
• The Serial Shipping Container Code (SSCC) which is used to identify logistics units during transport and storage. The SSCC acts as the vital link between physical goods and the electronic shipping messages used during the EDI process. You can learn more about the SSCC and the GS1 Logistics Label here.
• The Global Location Number (GLN) which is used to identify businesses (as a legal entity) and to identify physical locations such as a delivery address.
• On a GS1 Logistics Label the Serial Shipping Container Code will be printed in barcode format using a symbol called GS1 - 128.
• EANCOM and GS1 XML are two of the main messaging standards that define the structure and exchange of electronic documents such as orders, advance shipping notices and invoices.

Follow any of the links above the read  more about each standard.

This short video explains the Order-to-Cash process

EDI solutions and guides

Usually you won't need to know all the technical details behind EDI. You can choose to work with a specialist solution provider who can deliver you an off-the-shelf package or design a system that meets your specific needs.

We work with many solution providers that offer variety of services for supply chain management, including software, hardware and consultancy. You can find a Solution Provider that best meets your needs on our Solution Provider Directory and in the Meet our Partners section.

But if you would like to learn more we have a selection of guides, videos and training resources that cover everything from the basics of EDI to technical guidelines for harmonised EDI message guidelines.