Different Types of Orders (Business + EDI Perspective)

Purchase Order (PO) – Standard Order

• A formal request to buy goods at an agreed price and quantity.
• It is Used in Retail, Manufacturing, FMCG etc.
• EDI Message Type: X12 - 850, EDIFACT - ORDERS
• Example: Walmart orders 1,000 mugs @ ₹120 each

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Blanket Order / Contract Order

• A long-term agreement with releases over time.
• It is Used in Retail chains, large distributors etc.
• Example: Annual agreement for 50,000 items, shipped monthly

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Release Order / Call-Off Order

• An instruction to release part of a contract order.
• It is Used in Retail, Automotive suppliers etc.
• Example: Ship 5,000 units this week from the annual contract

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Forecast Order 

• A planning signal, not a confirmed order.
• It is Used in Automotive, Electronics and High-volume manufacturing
• EDI Message Type: EDIFACT - DELFOR 
• Example: Next 3 months we may need 10,000 units

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Delivery Schedule / JIT Order

• A time-specific delivery instruction.
• It is Used in Automotive, Just-In-Time (JIT) supply chains etc.
• EDI Message Type: EDIFACT - DELJIT
• Example: Deliver 120 parts at 10:30 AM today

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Rush / Expedite Order

• An urgent order requiring faster delivery.
• It is Used in Retail during peak season, Emergency manufacturing etc.
• Example: Ship today instead of next week

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Drop-Ship Order

• Supplier ships directly to end customer, not retailer.
• It is Used in E-commerce, Marketplaces etc.
• Example: Amazon orders → Supplier ships to customer address

EDI Retail vs Automotive Orders

Retail Orders:

The Purpose is selling finished goods to stores or online customers

How Retail Orders Work:

1. Retailer creates a Purchase Order (PO)
2. Supplier confirms and prepares goods
3. Supplier ships goods and sends ASN
4. Retailer receives goods
5. Supplier sends Invoice

Example:
A Company orders 500 water bottles → ships once → invoice sent

Retail EDI Standards

• ANSI X12 (850, 856, 810)

• EDIFACT (ORDERS, DESADV, INVOIC)

• TRADACOMS

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Automotive Orders:

The purpose is to Supply parts/components for manufacturing company

How Automotive Orders Work:

1. OEM sends Forecast (weekly/monthly demand)
2. OEM sends Delivery Schedule (daily/hourly quantities)
3. Supplier ships exact quantity at exact time
4. Any delay = production line risk

Example:
Car plant needs 200 brake pads every 2 hours → supplier must deliver exactly on time

Automotive EDI Standards

• EDIFACT subsets from:

  • ODETTE

  • VDA

• RosettaNet (electronics/auto suppliers)

EDI is not just file movement

EDI itself is old and stable — but how companies use EDI is changing fast.
The “what’s new” is mostly around automation, visibility, and expectations.

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1. EDI Is Moving from File Exchange to Process Automation

Old thinking:

“EDI = sending and receiving files”

New thinking:

“EDI = automated order-to-cash process”

What’s new:

• EDI tightly integrated with ERP, WMS, TMS

• Business rules embedded into EDI flows

• Touchless processing becoming the goal

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2. Real-Time Expectations Are Rising

EDI was traditionally batch-based.

Now retailers expect:

• ASNs within minutes of shipment

• Near real-time invoices

• Immediate error notifications

What’s new:

• Event-driven EDI (triggered by shipment, pick, pack)

• Faster SLAs

• Less tolerance for delays

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3. Chargeback Prevention Is a Bigger Focus Than Ever

Earlier:

• Companies accepted chargebacks as “cost of doing business”

Now:

• Chargebacks are tracked, analyzed, and challenged

• Automation is designed to prevent violations upfront

What’s new:

• Pre-send validation rules

• Retailer-specific compliance checks

• Chargeback dashboards

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4. EDI Visibility & Monitoring Are Finally Getting Attention

Old reality:

• “No news means EDI is working”

New reality:

• Companies want full visibility:

  • What failed?

  • Why?

  • Who owns it?

What’s new:

• Proactive alerts

• Exception queues

• KPI-driven EDI monitoring

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5. Business Teams Are Getting Involved in EDI

EDI is no longer just IT’s problem.

What’s new:

• Finance tracks invoice deductions

• Operations track ASN accuracy

• Supply chain teams care about routing compliance

EDI is becoming cross-functional.

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6. Hybrid EDI Models Are Growing

Companies now run:

• Traditional EDI (X12 / EDIFACT)

• APIs with modern partners

• Portals for small vendors

What’s new:

• EDI + API coexistence

• Same business rules applied across formats

• Unified visibility across channels

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7. Self-Service & Configuration Over Custom Code

Earlier:

• Heavy custom mappings

• Dependency on vendors or consultants

Now:

• Configuration-driven rules

• Partner onboarding templates

• Faster changes with less risk

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8. EDI Talent Expectations Are Changing

What’s new for professionals:

• Less “just mapping”

• More business + process knowledge

• Understanding chargebacks, SLAs, KPIs

Modern EDI professionals are becoming integration consultants, not translators.

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What Has NOT Changed:

• EDI formats are still the same

• Retailer rules are still strict

• Poor data still breaks everything

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Summary

Companies now see EDI as:

• Revenue protection

• Compliance enforcement

• Operational backbone

EDI Chargeback Transactions

What Is an EDI Chargeback Transaction?

An EDI chargeback transaction is not a standard EDI document like a PO or Invoice.

It is a financial penalty imposed by a retailer on a supplier when EDI or logistics rules are violated.

Retailers usually deduct this amount directly from the supplier’s payment and communicate it through EDI documents or retailer portals.

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Why Do EDI Chargebacks Happen?

Chargebacks happen when a supplier fails to meet retailer EDI compliance requirements, such as:

• Late or missing ASN

• Incorrect ASN quantity or carton data

• Invalid item numbers (SKU, GTIN, FNSKU)

• Late or incorrect invoice

• Incorrect ship-to / GLN / store number

• Labeling or packaging mismatch

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There is no universal EDI “Chargeback” document, but retailers communicate chargebacks using different EDI transactions.

Common EDI Documents Used for Chargebacks

1. EDI 810 – Invoice Deduction

• Retailer deducts chargeback amount from invoice payment

• Seen as a short-paid invoice

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2. EDI 812 – Credit/Debit Adjustment

• Explicit document showing:

  • Chargeback reason

  • Deducted amount

Example reasons:

• Late ASN

• Routing non-compliance

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3. EDI 864 – Text Message

• Used to explain the chargeback in detail

• Often includes free-text reason codes

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4. EDI 824 – Application Advice

• Sent when an EDI document is rejected

• Not a chargeback itself, but often leads to one

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5. EDI 997 / 999 – Functional Acknowledgment

• Confirms whether a document was accepted or rejected

• Rejection and no fix = chargeback later

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Chargeback Flow (Example)

1. Supplier sends ASN (856)
2. Retailer detects ASN quantity mismatch
3. Shipment accepted, but violation logged
4. Retailer issues chargeback
5. Deduction appears in 810 payment or 812 debit memo