MAKING THE MOST OF ASNS 2004-08-23 (1)

Michael Garry

Electronic Data Interchange between manufacturers and retailers has been around for over two decades. Yet one of its most potentially powerful transaction sets, the Advance Shipping Notice (ASN), has still not seen widespread use.

However, in combination with bar-code technology like the UCC-128 pallet bar code, the ASN -- an electronic notification sent by the manufacturer's computer to signal what's on the way to a food distributor's warehouse -- is proving it can have a far-reaching impact on the efficiency of warehouse operations.

Just ask Rebecca Hicks, UCCnet implementation coordinator for Wegmans Food Markets, Rochester, N.Y., who described the chain's experience with ASNs at the Uniform Code Council's U Connect conference in Anaheim, Calif., in May.

Wegmans, said Hicks, receives 20% to 25% of its products through the use of ASNs. ASNs are used in concert with UCC-128 bar code "license plates" (that encompass the serial shipping container code) at four facilities and will be used at a new one that recently opened in Pottsville, Pa. Five other facilities don't employ ASNs.

"We'd love to see every single load with an ASN," she said. However, not every facility is equipped to scan UCC-128 bar codes, and "it doesn't do us any good to receive ASNs if we can't scan the bar codes on the product."

The ASN, known numerically as EDI transaction set 856, lets a retailer or wholesaler prepare its docks and facilities for what a manufacturer will be delivering. This, Hicks said, translates into less waiting time at the dock for the delivery truck and faster put-away of products at the warehouse. ASNs are used in conjunction with more common EDI transmissions for purchase orders and invoices.

Wegmans picks up ASNs every two hours and schedules receiving 24 hours in advance. Usually, ASNs are sent as soon as a truck leaves a manufacturer's facility, Hicks said, though some manufacturers are not capable of that. Sometimes, the ASN arrives after the product.

At Wegmans' facilities, which receive about 1.5 million cases a week, average dock time has been reduced to one hour per load, said Hicks. "This has allowed us to cut back on our investment in receiving. We run more loads through fewer docks with fewer man-hours."

ASNs have also enabled Wegmans to make its warehouses "pallet-ready," so that pallets can be put away without being broken down, noted Hicks. "We don't want to break down pallets, which is time consuming," she said. To accomplish this in its initial pilot, Wegmans reconfigured a warehouse so that about half of manufacturers' pallets fit into slots, while manufacturers altered their pallet configuration to make the rest fit.

ASNs have also led to "a considerable gain in the accuracy of receiving and a reduction in exceptions," said Hicks. However, she added, this can only occur if the ASN information matches the "physical reality" of what is delivered.

More accurate receiving has meant more accurate invoicing and a reduction in accounting reconciliation, she said. This has also reduced the size of the staff that works on reconciliation, as well as sped up payments to vendors. Purchase orders can also be adjusted with updated information from ASNs.

Hicks has observed ASNs improving job satisfaction among warehouse receivers, "even old-timers and technophobes." In addition to being faster and more efficient, workers are less frustrated "when the product in front of them matches the product they expected to receive," she said.

Finally, ASNs have improved customer service at stores by increasing product availability, Hicks said. Shipments are less apt to sit in the warehouse because they haven't been identified.

The technology Wegmans needs for ASNs and UCC-128 include handheld scanners at the dock, which Hicks said cost between $500 to $700 apiece. Handhelds for forklifts and dock doors were considered, but put on hold because not all shipments come on pallets. For software, Wegmans employs its EDI VAN (value-added network). The largest cost, she said, was in training.

Working With Wegmans

Hicks identified a number of manufacturers that send Wegmans ASNs, including Procter & Gamble, Yoplait, Campbell Soup, Quaker Oats and Welch's, among others. All of these suppliers send Wegmans shipments seven days per week.

Dee Biggs, director of demand fulfillment for Welch's, Concord, Mass., told SN Welch's and Wegmans collaborated on an ASN project four years ago that has enabled Welch's to "find better uses for ASNs."

Biggs stressed that to be most effective, ASNs need to be used in combination with UCC-128 bar codes, along with coordinating the "TI/HI" of each pallet (the number of cartons tied together to form a layer, and the number of layers of cartons high on the pallet). Welch's has done all of that with Wegmans. Welch's is currently engaged in an ERP (enterprise resource planning) installation that Biggs said will make it easier to transmit ASNs.

Welch's has found that ASNs and UCC-128 bar codes can help reduce unloading time and dock congestion, said Biggs, adding that Welch's believes ASN/bar-coding technology is a very good idea. "Dock congestion is a big industry issue," he noted. "Manufacturers can't get appointments. Then it takes 2 1/2 hours to unload a truck."

Yet Welch's only sends ASNs to about a half-dozen retailers. "Retailers are not clamoring for it," said Biggs. "Other technology may have a higher priority."

Associated Wholesale Grocers, Kansas City, Kan., does not use ASNs, said Sharon Savala, EDI coordinator for the wholesaler. "Our warehouses know what they ordered and what they are expecting to receive," she said. "If they were shorted, they would know that." If AWG did use ASNs, it would be to communicate shipment notices to its independent stores, she noted.

Still, AWG, like many other food distributors and manufacturers, still regards EDI as a whole as an important process in its organization. (See "EDI Lives!" SN, June 28, 2004.) Last December, AWG even decided to upgrade its EDI system to a Web-based platform, EDIINT.

Future Plans

Hicks said Wegmans is examining becoming a transmitter of ASNs, as well as a receiver. "We are looking at being able to transmit ASNs internally from our manufacturing facilities to facilitate receiving that product," she said. "Sometimes, we don't know where our own product is."

ASNs will also play an important role at a new distribution center in Pottsville, Pa., which began receiving produce in June. Hicks described this as a "pallet-ready" warehouse, which will avoid breaking down pallets and where trailers will be directed to docks closest to the slotting area where pallets will be stored. "We want to use ASNs to allow us to be more efficient in this building, with less movement of product," she said.

In bar-code scanning, Wegmans plans to eventually scan ITF-14 bar codes based on GTINs (Global Trade Item Numbers). "We are currently receiving cases with ITF-14s, but we are reluctant to begin using them for our receiving process because we discovered serious data accuracy issues," Hicks said. "So until we're more comfortable with the accuracy of the data, we're holding off implementing that."

Poor data accuracy is a problem that affects all of Wegmans ASN activity. One supplier that tried to send Wegmans ASNs struggled with the process because of poor data accuracy, with data that "didn't match reality," said Hicks. Because of this issue, she said, Wegmans only scans case-level information rather than pallet-level information.

Hicks noted that data accuracy is an issue at the core of other industry initiatives, notably data synchronization between manufacturers and retailers. She estimated that about 60% of the data Wegmans receives electronically has imperfections. To make sure that product dimensions are correct, Hicks said she always carries a ruler with her.

"My internal data is not any more accurate than external [manufacturer] data," she said. "So it's critical on both sides."

Sending ASNs to Kroger

Most retailers that accept advance shipping notices (ASNs) via EDI have specific requirements for manufacturers that send them. Kroger is no exception.

The following are some of the ASN requirements found in Kroger's "EDI Standard Agreement" at http://edi.kroger.com/edi/start_002_h.htm:

The ASN must conform to an agreed-upon format detailed in the latest release of Kroger EDI ASN Mapping documentation.

A thorough testing period will be initiated, and the vendor must meet the business and technical requirements as defined in the latest release of the Kroger EDI ASN Mapping documentation before moving to production.

During the test period, the vendor must continue to send packing lists attached to the lead carton.

Once in production mode, an ASN that accurately reflects the contents of the shipment must be sent for all shipments. The vendor will be held liable for a return or penalty when receipt of the product is delayed due to problems in content or timing of the ASN.

Receipt of the ASN must occur prior to the physical receipt of the product.

If an ASN error occurs, then the vendor must be able to fix and resend the ASN in a timely manner.

No split shipments or back orders will be accepted when shipping the ASN via EDI.