Do you want to reduce your company’s cost of receiving shipments by about 40%?
Of course, every company wants to cut costs. Experts say that an organization can save up to 40 percent of shipping costs if it uses automated advanced ship notices (ASN).
The Pre-ASN Era
In the pre-ASN era, organizations often did not know when product shipments were being delivered or what products were included in each shipment. Employees would spend way too much time manually processing each shipment to figure out how to allocate each item… Were there enough widgets to ship to a store or five stores or 50 stores?
How can an organization make plans when there is such uncertainty? Purchasing decisions were affected by uncertainty; so were sales decisions, distribution decisions, stocking decisions, hiring decisions, employee time decisions, and spending decisions.
In the pre-ASN era, organizations had to manually identify a shipment’s contents, the amount of assets supplied, the supplier, and identify the ultimate destination.
The ASN Era
In the ASN era, though, organizations can make instant assessments as soon as they receive the ASN, which is received prior to the shipment.
The electronically delivered ASN — which is also known as an EDI (Electronic Data Interchange) 856 document — should include the following information:
- When the shipment was sent and the expected delivery time and date.
- What products are in the shipment.
- The product’s destination. This information is crucial for a company with several warehouses and distribution centers.
- Numbers that correspond with the order such as purchase order numbers and ship notice numbers. This information is very beneficial to an organization’s financial and recordkeeping departments and can expedite payment to the supplier.
- How the products are packaged. This information could be crucial to employees who are responsible for storing the property in a warehouse or preparing it for a delivery.
An ASN that is part of an automated order can also help organizations track the status of the products they have received as they travel through the supply chain. The ASN provides a list of the barcoded ID numbers for each shipping unit (a carton or a pallet) and each product within the shipping unit.
The benefits of ASNs were obvious by the early 1990s, but Dan Gilmore, the editor-in-chief of Supply Chain Digest, wrote that organizations were way too slow to accept them. The blog “Benefits of using ASNs (Advanced Shipment Notices)” also expressed surprise about how many companies were still not using them.
“To me, the ASN is one of the definitive “best practices” of an integrated supply chain,” wrote Gilmore in the blog “ASN and the Supply Chain.” “It is what links the flow of goods between supplier and customer…The ASN should be and often is a key element of the “perfect order.” To be a true perfect order, the ASN should exactly match what is received and also perfectly match the invoice.”