What is an Advanced Shipping Notice? Learn How to Automate ASN Shipping

What is an ASN in Shipping?

What exactly is an Advanced Ship Notice (also called an Advanced Shipping Notice, or ASN document)? At a high level, an ASN in shipping is an electronic document that provides all the essential details about an upcoming delivery your company is making to a business partner. 

That information typically includes things like:

• Order information, including an order number
• Delivery date and time
• Location information (origin, destination) 
• Description of products in the shipment
• Shipping and delivery details, e.g., pallet codes, carrier information, etc. 
• Physical description of the package(s), e.g., dimensions, weight, etc. 

There is often more information than this included, of course, but all such information is important to customer relationships because it captures the essential details about the shipment, so your customer has clear understanding and knows what to expect when planning to accept the delivery from you. 

In the old days, ASNs were often physical documents, called a “manifest,” or a “bill of lading,” which was manually processed via pens, paper, and clipboards. Later they could be faxed or emailed, but by today’s standards even those methods are considered slow and unreliable. 

In the digital age of the internet, ASNs now take the form of what are called EDI documents, which stands for “electronic data interchange.” In the supply chain integration arena, where ASNs are frequently used by manufacturers, suppliers, distributors, and retailers, they are specifically referred to as an “EDI 856.”

And their fundamental purpose is to let the party receiving your shipment know all about what’s coming their way, so they can plan accordingly.

This is important and valuable because having that level of visibility empowers a company to make decisions it otherwise couldn’t, decisions that often impact revenues and profit margins. Clear ASNs for instance enable a company to better manage their inventory and their budget.

 

Here's an example of what an EDI 856 looks like in digital form. This is what the machine sees:

 

When do ASN’s need to be generated? To best answer that let’s step back and have a look at the overall process that triggers this need. Such context will help explain why having the automation, visibility, agility, and control enabled by ASNs is so valuable in today’s competitive and disruptive supply chain environment. 

The ASN Process

Like most everything in the digital world, the automation of document sharing involves a back-and-forth information-sharing and communication process that occurs between the key parties to a business transaction.

Here’s basically what’s going on around an ASN in shipping: 

First, let’s say an EDI 850 Purchase Order with a specific order number is sent from your trading partner ACME Corp. and received by your business, ABC Company.

ACME wants to buy your products and have you ship the order to a specific location. 

When ABC Company gets such a document, your integration platform automatically generates an EDI 855 Purchase Order Acknowledgement. This step serves as recognition back to ACME Corp. that their EDI 850 Purchase Order was indeed received.

At this point, your cloud-based EDI platform, which thankfully has Advanced Shipping Notice software built in (e.g., EDI X12 capability, the U.S. standard), will generate an EDI 856 – the ASN document we’re talking about in this blog – and pushes that document back to ACME Corp. giving detailed information about the contents of the pending shipment.

Finally, your cloud-based integration platform (e.g., Cleo Integration Cloud) generates an automated EDI 810 Invoice and sends the invoice to ACME Corp. as a receipt for the goods ABC Company has provided to them.

Here’s a screen capture with fields that show most of the preceding steps we just explained.

It’s all very straightforward, yet things in the ASN supply chain can and do go wrong.

And that’s why it is so helpful to have visibility into the real-time status of all these steps appearing front and center on your monitor or mobile device via an intuitive, graphical user interface that makes adjustments or troubleshooting a breeze. 

 

 

The Importance of the ASN to the Supply Chain

It’s probably now fair to say that given what we have all experienced through the global pandemic over the past few years, and what we’re now seeing happen due to turmoil caused by war and international politics, supply chains are strained like never before. Even in “normal” times they’re vulnerable to uncertainty and disruption, which can and does wreak havoc on businesses that are not prepared with strategies to outsmart disruption by taking control over their integration solutions. 

While it may be tempting to view ASN supply chain matters as just another cog in the greater ecosystem machinery of trade and commerce, strategic ASN management is critical for effective trading partner communication.

We all appreciate the proverbial “heads up” when told something’s about to happen; it enables us to anticipate, plan, and prepare for what’s coming next.

In business, it’s no different.

When an advanced ship notice is received your trading partner can sensibly and in a timely fashion prepare for that shipment’s arrival. This may mean delaying other orders to make room for yours … creating space in their warehouse to take in the additional pallets … temporarily adjusting their staffing levels to handle the labor called for … or maybe even upping their order from you based on demand spikes that having your product in stock may create for their business. 

All in all, the ASN in the supply chain fosters a healthy commerce environment where communication – timely and clear information shared between business partners -- leads to a flat-out better partner relationship, which is great for all parties. 

Real-time updates mean better, faster decisions.

Knowing what the actual cost is as opposed to guessing or estimating enables companies to maximize their budgets.

And given today’s swings in supply and demand, and the disruption those extremes can cause in supply chains, ASN documents are extremely helpful for ensuring accuracy in inventory management. 

And from the integration technology perspective, the cool thing is that with the EDI capabilities on your cloud-based B2B integration platform (along with API or Flat-file on some), ASN software is built-in and the process is automated, meaning you seldom have to worry about whether the communication is happening as intended. And even if something were to go awry, your system will pop up alerts to let you know exactly where the breakdown may have occurred.

All in all, automation makes ASN management a lot easier than it used to be, and it’s valuable to companies for more reasons than you may suspect. 

ASN Management: Why You Need Automated Advanced Shipping Notice Software 

One often-overlooked advantage of ASN notifications, aside from strengthening the broader ecosystem relationships a company has by keeping communication with valued business partners clear and flowing, is that ASN software drives the significant financial opportunity for companies that use this technology.

Why?

Because in many instances, ASNs are hitched with SLA notifications or Service Level Agreements. 

SLA’s put forth the contractual terms on which companies decide to do business together.

They spell out the expectations – and the financial penalties that can result for failing to deliver on them. In particular, EDI chargebacks -- financial penalties some companies lodge against their vendors and suppliers for failing to maintain EDI compliance with agreed-upon SLAs -- continue to wreak havoc on trading partner relationships and, in turn, supply chains themselves.

Take Walmart for example.

Here you can see Walmart’s “Getting Started with EDI Implementation Guide,” which helps companies become EDI compliant with the retailer. 
In the document, Walmart lays out 4 EDI compliance requirements for all partners

1. The ability to exchange the basic EDI document set
2. The timeline for EDI data testing 
3. Connection requirements
4. Functional acknowledgment expectations 

First, the basic EDI documents required by Walmart are:

1. 810 Invoice 
2. 821 Claim
3. 816 Address Listing 
4. 820 Remittance
5. 850 Purchase Order 
6. 864 Text Message [for invoice errors]
7. 997 Acknowledgment

Second, as far as the acceptable timeline for EDI testing, Walmart dictates that the period in which a vendor must prove that they are capable of transmitting all of the basic documents can take no longer than 6 weeks. 

Third, to trade EDI with Walmart, vendors must maintain a consistent AS2 connection. This means that a business must not go offline or experience any disruption in its communication with Walmart.

Since AS2 is the sole means of connecting to Walmart and the method by which EDI documents are exchanged, a drop in connectivity can negatively affect a trading partner’s relationship with the giant. 

Fourth, the EDI trading partner MUST send EDI 997 functional acknowledgments no more than 24 hours from when Walmart purchase orders were placed in their partner mailbox. 

It’s not just Walmart, either.

Amazon mandates stringent guidelines for fulfilling their orders, too. Amazon Vendor Central is highly dependent on EDI systems for purchase orders (PO), advance shipping notice (ASN), and other fulfillment data, and it’s extremely punitive around late or inaccurate data.

Vendors operating through this platform need reliable and resilient integration to remain EDI-compliant with Amazon and avoid losing revenue to costly chargebacks, which can include:

• 1% of cost for late purchase order acknowledgments (POAs) or POA changes
• $5 to $150 for a late EDI 856 - ASN (Advanced Shipping Notice)
• 2% to 6% of cost for non-compliant ASNs

 

 

 

From these examples it’s easy to see why there is such great potential value in being able to know ahead of time whether a given EDI transaction has hit a snag: Compliance shortcomings can cost companies a lot of money in unexpected but altogether avoidable fines.

And costs like that eat into revenue and profit margins, so the whole organization suffers. 

The good news is that some players in the integration industry have come out with solutions that help companies gain the upper hand on SLA management, a process in which ASN documents play a critical role.

For instance, Cleo Integration Cloud (CIC) Cockpit with RADAR™ (Real-time Analytics, Data-driven Actions & Results) provides the industry’s first integration-driven automated SLA compliance and risk-notification framework that enables early detection and real-time alerting of at-risk operational SLAs.

RADAR empowers supply chain-driven businesses to mitigate compliance risk by defining, measuring, reporting, and acting immediately on time-sensitive SLA notifications. 

SLAs can be configured in minutes by business, operational, or technical users – instantly creating dashboards and charts to monitor these Key Performance Indicators (KPIs) in real-time. Additionally, users can quickly create thresholds to receive alerts and notifications before SLA violations occur. Each user gets to define alerts that are relevant or valuable to their specific role, making every real-time notification both timely and actionable. 

By rethinking how their company approaches and manages SLAs, companies can take direct control over them to setup, monitor, measure, and optimize their business performance.

To learn more take a tour of RADAR and experience the value for yourself https://resources.cleo.com/cockpit-radar-tour