In manufacturing, timing is everything: A carmaker is gearing up for a big production run. Each part — wheels, engines, seats — arrives from different suppliers, and everything needs to come together at the right time. But without a real-time shipping schedule, things can quickly go off track. One supplier might deliver early, filling up valuable storage space. Another might be late, leaving workers standing around with nothing to assemble. Production slows, deadlines slip, and costs rise.
Electronic Data Interchange (EDI) — specifically, a digitized document known as the EDI 862 — prevents all this. It keeps shipments organized and schedules constantly updated so manufacturers get exactly what they need when they need it — no more, no less.
In this guide, we’ll explain the ins and outs of the EDI 862 document, the role of EDI in shipping and manufacturing, and how EDI helps supply chains stay on track.
What Is EDI 862?
The EDI 862 (Shipping Schedule) is a digitized document that buyers use to communicate shipping details to their suppliers in real time. It outlines the type or types of goods, the quantity, and the arrival date so that suppliers can adjust deliveries based on changing production schedules. Because of this, the EDI 862 is especially important in just-in-time (JIT) manufacturing, where companies receive materials on a needs-be basis to avoid excess inventory piling up.
The EDI 862 Specification, Elements, and Format
EDI 862 Technical Aspects
The EDI 862 follows a standardized format, which is important for supply chains because it keeps all shipping details consistently structured and compliant with ANSIX12 and other global EDI standards.
All EDI documents, including the EDI 862, consist of different sections — called segments — that contain shipping details. These segments define information such as the shipping schedule, product specs, and shipment instructions. The EDI 862 then divides each segment into smaller data points that contain unique identifiers, which we'll explain in detail below.
Buyer/Vendor Identification Details
This segment denotes the buyer and vendor and matches shipping schedules with the appropriate businesses. It assigns unique codes to each party, making it easier to reference and confirm shipment details.
Product Descriptions
The segment contains details regarding what’s being shipped, including quantities and item numbers. Item numbers are linked to the original purchase order to help the sender and receiver track and verify products.
Shipping Instructions
Details about how shipments should be handled and delivered appear in this segment so that both buyers and vendors follow the correct shipping process. That may also include specifications like temperature controls, fragile handling, or any other special delivery requirements.
Packing Specifications
For shipments to arrive at their destination intact, the right packaging is a must. This segment outlines standardized instructions regarding whether goods should be shipped in boxes, containers, or pallets.
Shipping Schedule Details
This segment includes the delivery schedule along with the shipment’s destination and expected arrival dates.
EDI 862 Sample Document and Segments
Before we go into the EDI 862’s various segments, let’s take a look at an example of the EDI 862 to see how it appears in code:
ISA*00* *00* *ZZ*SENDERID *ZZ*RECEIVERID *240218*1500*U*00401*000000123*0*P*>~
GS*SS*SENDERID*RECEIVERID*20240218*1500*123456789*X*004010~
ST*862*0001~
BSS*00*1234567890*20240218*1500*0001~
N1*ST*BUYER COMPANY NAME*92*123456~
N1*SF*SUPPLIER COMPANY NAME*92*987654~
LIN*1*VP*ABC123*PO*4500001234~
SCH*100*EA*068*20240220~
SCH*50*EA*068*20240221~
DTM*002*20240218~
TD5*O*2*UPS*GROUND~
REF*PO*4500001234~
SE*12*0001~
GE*1*123456789~
IEA*1*000000123~
Standard EDI Segments
Some segments in the EDI 862 appear in all EDI documents because they perform important functions that organize and structure data. This allows businesses to send, receive, and process electronic documents correctly.
ISA (interchange control header): This identifies the sender and receiver of the EDI transmission.
GS (functional group header): This groups related transactions within the interchange.
ST (transaction set header): This indicates the start of the document.
SE (transaction set trailer): This marks the end of the transaction.
GE (functional group trailer): This ends the functional group within the interchange.
IEA (interchange control trailer): This closes the entire EDI transmission.
Now, let’s take a closer look at the segments unique to the EDI 862. Again, each segment serves a specific purpose so that the sender and receiver are able to track shipments, manage inventory, and coordinate deliveries as efficiently as possible:
BSS: Beginning Segment for Shipping Schedule
This segment explains the purpose of the shipping schedule (whether it's new, a revision, or a cancellation) and includes details such as a unique schedule identifier, the dates when the schedule was created, and when it takes effect.
DTM: Date/Time Reference
The DTM segment lists important dates and times related to the shipping schedule: delivery deadlines, shipping dates, and other time-sensitive information. Dates are typically formatted as YYYYMMDD so that they're consistent across different systems.
N1: Name
The N1 segment lists the parties involved in the transaction, such as the seller, buyer, and shipping destination. It includes an entity identifier code that shows the role of each company in the transaction, the companies' names, and sometimes additional identifiers like a location code to specify a warehouse or a government-issued business number for legal identification.
LIN: Line Item Identification
This segment denotes the items that are being shipped, with product descriptions, tracking numbers, line item numbers for reference, and product codes — such as Universal Product Codes (UPCs) or Stock Keeping Units (SKUs) — that identify specific products within the shipment.
SCH: Line Item Schedule
The SCH segment outlines the quantity and schedule for each line item. It includes details such as the unit of measure code (e.g., pieces or cartons), scheduled delivery dates, and the total number of items to be shipped.
TD5: Carrier Details
This segment contains transportation info about the carrier responsible for shipping the goods, including a routing sequence code, Standard Carrier Alpha Code (SCAC, a unique four-letter code that freight carriers use), and the method of transportation (e.g., truck, air, or rail).
REF: Reference Information
The REF segment is for additional internal notes, lot numbers, and parking instructions, if applicable. It also includes reference identification qualifiers to specify the type of reference (purchase order number, invoice number, or tracking number).
What Is the Difference Between EDI 830 and 862?
The EDI 830 and 862 serve related functions but differ in terms of timing. While the EDI 862 provides short-term, detailed shipping instructions based on real-time needs and current demand, buyers use the EDI 830 (Planning Schedule with Release Capability) to communicate their long-term production plans to suppliers, allowing suppliers to plan ahead by aligning their production and inventory strategies.
7 Benefits of EDI 862
1. Fewer Shipping Errors
The EDI 862 follows a standardized format and automates data checks, which allows it to catch even minor mistakes before they cause major shipping delays.
2. Better Inventory Management
Because the EDI 862 denotes precise shipping schedules, businesses are able to keep just the right amount of stock on hand. No running out of products, which can slow down order fulfillment or having to store too much.
3. Clearer Partner Communication
Having up-to-date shipping information reduces confusion, strengthens trust, and makes it easier for trading partners to work together. With the EDI 862, real-time updates keep everyone on the same page.
4. Real-Time Shipping Tracking
Knowing exactly when shipments are due to arrive helps businesses plan better. With the EDI 862, real-time shipping updates make it easier to coordinate staffing, storage, and delivery schedules.
5. Less Manual Work
Because EDI 862 automates data exchange, employees don’t have to enter shipping details by hand. This frees them up to focus on more important tasks like handling customer inquiries or overseeing logistics operations.
6. Improved Supply Chain Coordination
When shipping information is accurate and sent on time, orders are filled faster, wait times are minimal, and suppliers and buyers are better equipped to keep their supply chains running as smoothly as possible.
7. Faster Schedule Updates
The EDI 862 lets businesses update their shipping schedules instantly. This makes it easier to adjust to changes in demand or unexpected delays, keeping shipments on schedule without extra hassle.
4 Common EDI 862 Issues and How to Solve Them
The EDI 862 makes shipping and inventory management easier, but it can come with challenges like data mismatches, system incompatibility, and security risks. Fortunately, there are simple ways to address them.
Inconsistent Data Formats
Not all trading partners use the same data format, which can easily lead to errors. Using an EDI translator to automatically convert data into the correct format and regularly testing and validating data exchanges with partners will help keep things from getting lost in translation.
Trouble Integrating with Other Systems
Connecting EDI to existing systems like enterprise resource planning (ERP) or warehouse management systems (WMS) can be challenging, especially when it involves older technology. One solution is to partner with an experienced EDI provider to handle the setup. A cloud-based provider with API capabilities, such as Orderful, helps ensure that all systems communicate smoothly.
Partners Not Following EDI Standards
Some trading partners might not fully comply with EDI standards, which can disrupt shipping schedules. To avoid this, it's important for trading partners to always clearly define EDI requirements in contracts and use automated alerts to notify partners of compliance issues as soon as they happen.
Data Security Risks
EDI systems handle sensitive inventory and shipping data, which makes them easy targets for cyberattacks. Trading partners can strengthen their security by using encryption and secure communication channels, and regular audits and compliance checks will also help keep all data safe.
Automate Your EDI 862 Processes with Full-Service EDI
Ready to automate your shipping schedules, stay ahead of last-minute disruptions, and always be in sync with your trading partners? A full-service cloud-based EDI solution can do all that and more. Connect with an EDI expert today to learn how.