The Problem with ASNs

By Tom Ryan

According to a recent survey of retailers, 89 percent required the use of ASNs (advance shipping notices) by their suppliers, but found accuracy and efficiency to be lacking. As a result, compliance-related deductions are higher around ASNs than any other supply chain document.

The study by GXS, a B2B e-commerce solutions provider, and the Vendor Compliance Federation (VCF) found that the use and application of ASNs has improved over the last three years but the rate of improvement has slowed and hit a plateau. It found that ASNs have been beleaguered by a number of factors, including inconsistent implementation by retailers, a pervasive lack of data quality and the difficulty of on-boarding the supplier community.

The study found several possible causes:

Numerous PO changes: Retail EDI professionals don't believe purchase order changes have a significant impact on ASN accuracy, but suppliers think they do. There is no quantitative data to validate or invalidate either view. Retail survey respondents indicated that they issue, on average, 4.4 changes per purchase order, much higher than vendor's estimates.

Lack of standards: While standards abound in terms of EDI syntax, structure, documents and communication protocols, the EDI practitioner still must understand the unique business rules of their trading partner. The amount of time and resources required to educate manufacturers about unique business rules as well as train and test EDI capabilities creates unintentional delays.

EDI not tied to e-commerce: While EDI used to be universally seen as strategic to e-commerce, many retailers no longer recognize it as part of their online strategy. E-commerce is seen as B2C; EDI is seen as a legacy messaging system for B2B. As a result, little strategic planning takes place between EDI and e-commerce.

Inadequate funding: The arrival of technology initiatives such as RFID, XML, data synchronization and sophisticated portals has pushed EDI further to the background. Each is laying claim to being the successor to some part of the EDI space. Yet, the market footprint for EDI continues to grow with more suppliers being on-boarded, including retailers' offshore private-label manufacturers.

Lack of measurement metrics: EDI managers still lack adequate tools as part of the standard EDI toolset for measuring business flow. In addition, basic EDI services do not appear to provide adequate visibility into the data traversing the network. As a result, EDI professionals are constrained from providing appropriate business insights and from helping companies move from strictly transaction sharing to higher order value functions such as real-time visibility.

"Deductions are not a solution to a problem, but they are used to motivate change in supplier behavior," said Mark Jones, managing director of the VCF, in a statement. "By optimizing the ASN process and combining it with supply chain visibility tools, retailers and suppliers can avoid the prevalent problems and reap the benefits in multiple areas of their business."

Discussion questions: What do you think is causing the continued inaccuracies and inefficiencies around ASNs in the EDI process? What do you think of some of the findings of the study? What solutions do you think will improve ASN accuracy?

• Press Release: Joint Study from GXS and VCF Discovers Improved ASN Accuracy Key to Retail Supply Chain Efficiency - GXS
• Study: ASN and Data Accuracy Drive Higher Order Functionality and Redefinition of Retail B2B Communication - GXS