Benefits of Trading the Purchase Order (850) via EDI

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Purpose
The primary purpose of the Purchase Order (EDI850/EDI875) is used by the buyer to request goods and/or services from a supplier. There are two documents that support the Purchase Order. The 850 is more widely used in General Merchandise while the 875 is Grocery focused.

The key data elements included in a Purchase Order are:
  • Purchase Order number
  • Purchase Order date
  • Location(s) where the product or services should
  • be supplied to
  • Requested ship and/or delivery date
  • Product Item Identifiers/Services such as
  • UPC/EAN/GTIN needed with their respective quantities
Additional data that may also be included in the Purchase Order are:
  • Carrier and service levels
  • Vendor Number
  • Item price
  • Expected charges and/or allowances
  • Additional item identifiers such as Buyer Item Number and Vendor Part Number
  • Item Description
  • Additional dates (Ex: Cancel by dates)
Benefits
There are benefits to both the purchaser and the supplier of implementing electronic trading of the purchase order. Many of these are dependent on how automated and integrated the transaction is for both parties. Some of the benefits that can be realized include:
  • Reduction in volume of paper flow and gain operating efficiencies through reduced time requirements to complete transactions by both parties
  • Reduction in administrative time spent manually submitting orders (buyer) and manually¬† receiving and entering purchase orders (supplier) allowing for resources to focus on value added work
  • Elimination of data entry errors associated with manual processes
  • Potentially increases the speed of fulfillment and supports the ability for the retailer to lower their on hand inventory

Benefits Overview
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Posted 3 years ago

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