SAP on AWS
EDI for SAP
How to Integrate a 4PL into SAP using EDI
by Jodi Abrams
DUE TO ITíS WIDELY ACCEPTED STANDARDS, EDI IS THE MOST COMMON CHOICE AS THE INTEGRATION METHOD FOR 4PLS.
There are many aspects that a 4PL can handle as a part of your logistics supply chain. Along the way there are corresponding EDI transactions for the various processes that will help automate the flow of information. Here, we will explore what some of those are and how you can use them in your inbound logistics integration.
WHAT ARE THE EDI DOCUMENTS AND IDOCS IN A 4PL INTEGRATION WITH SAP?
There are numerous areas for integration with a 4PL, here we will look at inbound logistics.
X12 EDI Transaction
|Purchase Order Change||ORDCHG||860|
|Purchase Order Acknowledgment||ORDRSP||855|
WHAT IS THE FLOW OF DATA BETWEEN SAP AND YOUR 4PL?
- Create a Purchase Order in SAP
- Potentially change the Purchase order in SAP
- Receive a purchase Order Confirmation
- Receive updates from your 4PL
Output from the PO will be sent to your 4PL so they can inform the vendor and plan the shipment.
Output from the change will be sent to your 4PL so that they can plan for the changes with the vendor
4PL Sends in a confirmation of your changes
This can include steps such as the load being tendered, updated delivery date, estimated pick up date by the carrier and potentially even routing steps along the way to the destination.
HOW CAN THE 4PL HELP YOU BE MORE EFFICIENT?
By offloading many logistics functions to a 4PL, it allows your business to focus your core competencies. By allowing the 4PL to handle all of the logistics execution, they can manage your business specific rules and all of the planning with the vendors. You will get the necessary updates back into the system to feed MRP and keep product flowing.
HOW DOES THE 4PL COMMUNICATE WITH YOUR VENDORS?
Most 4PLís will have a portal that they manage. Here, the vendors can log on and provide confirmation on aspects like quantities, prices and dates. They can also communicate with the 4PL regarding freight planning and pick up times. This saves you a lot of time from requiring your internal staff manage this communication.
A 4PL can play a varying sized role in your organization. They key to a good set up is planning out all of the scenarios that can occur in advance and having an automated communication solution, such as EDI, in place to manage as many of them as possible. You want to keep situations requiring manual intervention to a minimum.
About the Author: Jodi Abrams
Jodi is an expert in SAP and eCommerce integration, and is Vice President of Applications for CONTAX.