Central Stock Distribution (EDI Merchandise)
Central Stock distribution has merchandise shipped to a central warehouse and the stores will pull stock from the central warehouse. Refrigerators are a very common example of Central Stock Merchandise. A shipment of 1000 refrigerators is received at a central warehouse. Each individual store will only receive one in-stock refrigerator. The rest of the order will be kept in the central warehouse. As refrigerators are sold, the stores will send the warehouse a delivery notification, either electronically (in the form of a EDI Warehouse Shipping Order) or
manually (in the form of a copy of the customer’s sales order). The warehouse will then ship the product to the customer.
In this scenario, the electronic notification of merchandise arrival (EDI) allows:
- Improved labor scheduling at the warehouse to handle the large influx of merchandise arriving at the warehouse
- Improved notification of merchandise arrival to the inventory system. If the retailer’s inventory system has an “in-transit” feature, advanced shipment notification can be used to update the “in-transit” bucket for the merchandise. Again, this is very important when the source of the merchandise is far away from a retailer (e.g. a West Coast retailer whose vendor warehouses have been consolidated into fewer and fewer warehouses, located primarily in the East, thereby increasing the transit time for merchandise arrivals)
- Reduction in time to reconcile merchandise receipts to Purchase Orders and Invoices. Typically, an Invoice cannot be paid until the goods are received, the Packing Slip is entered into the retailer’s receiving system, and the Invoice is received and reconciled to the original Purchase Order. The use of advanced notification of the arrival of the goods can allow receivings to be pre-entered into the retailer’s receiving system.
If advanced shipment notification is provided by EDI, the shipment notification will report on: Vendor Information, Shipment Identification, Order Identification, Packaging Identification (how the goods are packed, by store, by item, by pack, etc.), Item Identification (UPC, Vendor Number, Retailer SKU), Shipment quantity.