What is the EDI 947 Warehouse Inventory Adjustment Advice?

EDI 947 - Warehouse Inventory Adjustment Advice

What is the EDI 947? The EDI 947, or the Warehouse Inventory Adjustment Advice, is typically sent from a warehouse to a trading partner (such as a retailer or manufacturer) to inform them of adjustments to inventory levels. These adjustments could be a result of various factors, including stock discrepancies found during inventory, damage or theft.

The EDI 947 format

The EDI 947 is a way for warehouses to communicate with businesses about the state of their inventory in a quick, detailed and standardized format. It helps everyone stay on the same page and manage their stock more efficiently.

Here’s a general overview of the format and key segments commonly found in an EDI 947:

ISA and GS: Interchange control and functional group headers

These segments mark the beginning of the EDI file and include information necessary for routing and processing the EDI document, such as sender and receiver ID, date and time of transmission and control numbers.

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ST: Transaction set header

This segment indicates the start of a transaction set within the functional group and specifies the transaction set type.

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W06: Warehouse adjustment identification

This critical segment marks the beginning of the Warehouse Inventory Adjustment Advice transaction set. It includes information such as the adjustment reason code, document date and unique identification number for the adjustment document.

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N1: Name

This segment is used to identify parties by name. This includes the warehouse (sender) and the company receiving the inventory adjustment information.

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W04: Item detail

This is one of the key segments in the EDI 947 transaction set. It provides details about the items being adjusted, including product identification (like SKU or UPCs) and the quantity and reason for the adjustment.

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W14: Total shipment information

This segment provides summary information about the total adjustments reported in the transaction set.

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SE: Transaction set trailer

This segment marks the end of the transaction set and includes a count of the total number of segments within the transaction set. It also includes the transaction set control number.

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GE and IEA: Functional group and interchange control trailers

These segments signal the end of the functional group and the end of the interchange, respectively. They include control numbers and counts to ensure the entire message is received intact and matches the sender’s records.

How is the EDI 947 used?

The Warehouse Inventory Adjustment Advice is used in several ways to manage and communicate inventory adjustments between warehouses and their trading partners, such as manufacturers, retailers or distributors.

Here’s how the EDI 947 transaction set is typically used in the supply chain:

1. Communicating inventory adjustments

The primary use of the EDI 947 is to inform a trading partner about changes in inventory levels within a warehouse. These adjustments could be due to various factors, including discrepancies found during inventory counts, damaged goods, theft or returns. By sending an EDI 947, the warehouse can provide detailed information about the type and quantity of items adjusted, the reason for the adjustment and the specific location of where these changes occurred.

2. Updating inventory records

Upon receiving an EDI 947, the trading partner updates their inventory management system to reflect the new inventory levels. This ensures that both the warehouse and the trading partner have accurate and up-to-date information about stock quantities, which is crucial for order fulfillment, planning and forecasting.

3. Discrepancy resolution

The EDI 947 helps identify discrepancies between physical and recorded inventory counts. By promptly communicating these discrepancies, trading partners can investigate the causes of the variances, such as errors in receiving, shipping or data entry, and take corrective action to prevent similar issues.

4. Financial and operational planning

Inventory adjustments reported through EDI 947 transactions can impact financial and operational planning. For example, adjustments due to damaged goods might lead to insurance claims or decisions to adjust production levels. Accurate inventory data is essential for effective supply chain management, demand planning and financial forecasting.

5. Compliance and reporting

In some cases, trading partners may have contractual obligations to maintain certain inventory levels. The EDI 947 allows warehouses to provide evidence of compliance with these requirements. Additionally, it supports reporting and auditing processes by providing a trail of inventory adjustments.

Benefits of using the EDI 947 Warehouse Inventory Advice

The benefits of EDI 947 extend to logistics service providers, 3PLs, retailers and suppliers alike. All supply chain partners will gain benefits from using the Warehouse Inventory Adjustment Advice as it provides the necessary quantity and status and reference details needed for confirming the movement of products between all parties.

Improved overall inventory accuracy

Communication of inventory changes to depositor

Ability to re-synchronize inventory totals after a physical inventory is taken

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Full-service EDI providers like SPS Commerce deliver EDI technology and associated staffing resources responsible for customizing, optimizing and operating your EDI solution. A full-service provider, like SPS Commerce, has an expert team that handles ongoing management of your EDI solution.

The SPS team actively manages 9,000 changes from retailers each year. SPS communicates directly with your trading partners to manage connectivity, setup, requirements, updates and support efforts. SPS also takes ownership of understanding your trading partner requirements and making map changes. SPS Fulfillment proactively monitors and optimizes your solution to prevent errors and minimize data entry.

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EDI 947 - Warehouse Inventory Adjustment Advice