Drop Shipping Part 2 – Inventory Updates

On-hand inventory tracking and visibility are very important in the drop shipping process. Retailers cannot reliably offer products to consumers without clear information regarding a supplier’s inventory.

EDI platforms solve this problem by providing notification of on-hand inventory through an Inventory Inquiry document. This type of form can be sent as often as necessary to keep the retailer apprised of inventory levels.

EDI 846 Inventory Inquiry/Advice

One document set that’s used heavily between manufacturers, suppliers and resellers is the EDI 846 transaction. It’s a vital tool for all parties in the supply chain, and provides the means to communicate essential inventory data. Like many other EDI forms, 846 can be used in multiple ways.

  • Reliable fulfillment for end consumers – For retail chains, form 846 from suppliers is an essential tool for supplying information about inventory levels to consumers.
  • Information to potential customers – The EDI 846 transactional set can be used to provide important inventory information to potential customers.
  • Sellers representatives – In the instance of goods sold by a representative for a seller, the 846 form can be transmitted to provide information about on-hand quantities.

The inventory information can include a broad range of data needed for maintaining a robust supply chain. For instance, the transaction can include item or part numbers, inventory location data, on-hand quantity and more. Quantity can be addressed with multiple attributes, including the quantity in transit, on order, committed to, on hand, on backorder, on float and returned.

Coordination with Orders

The EDI 846 can also be used in conjunction with an 850 Purchase Order. In the case of an automatic replenishment agreement (established through the form 850 purchase order), the quantity information contained in the EDI 846 transaction set can be the signal to send additional products to maintain an agreed upon inventory level on hand. Thus, it helps to eliminate time and cost on the part of both the supplier and the seller. And, really, what business can’t benefit from reduced time and money spent on supply chain management?

Customer Specific Requirements

Customers will provide a full guide to the data sections/areas they require when transmitting inventory information to them. The guide is a vital document (though usually quite lengthy) that contains essential information to maintain a working, stable supplier/customer relationship.

For suppliers, it is critical to follow the instructions detailed in the guide to ensure there are no miscommunications, missing information or incorrectly formatted requests or updates sent. Problems like these can quickly eat away the time and cost savings generated by using EDI forms in the first place.

EDI is a mature, stable platform that offers robust capabilities to all businesses in every industry. Form 846 is one of the important tools available for suppliers, resellers and other members of the drop shipping supply chain.

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