Mini Posts

Some thoughts on Safety Stock

Safety stock is normally required by companies to ensure that they have sufficient quantities of material in stock. The safety stock is there to provide coverage for unexpected customer demand, damage in the warehouse or required due to quality issues found in production. However, there are situations where companies do not require inventory to be in stock. These “out of stock” situations should not be confused with the highly undesirable “stock-out” predicament where customer’s orders cannot be shipped or production is halted due to lack of lack of components. The “out of stock” situation is beneficial to companies when …

dabbawala supply chain

Dabbawalla = Supply Chain Accuracy

The word “Dabbawalla” translates to dabba = lunch box, and walla = man or the ‘lunch box man’. It is a 125 year old trade formed by a unique and incredible network of 5,000 men with the complex task of delivering 200,000 homemade lunches each day from suburban homes to downtown offices in the city of Mumbai… all within a period of approximately 3 hours! That’s about 65 million ‘dabbas’ a year with almost no mistakes!

Dabbawallas are largely illiterate rural workers who use nothing more than 3 – 4 symbols crudely painted on their dabbas to create an unparalleled …

What is an “EDI” Provider?

WHAT IS AN EDI PROVIDER? This is a common question asked by companies who are looking for an organization to manage or provide all or a portion of an EDI solution. In its most basic form, an EDI Provider should be able to connect to your trading partner on your behalf and provide you with some capability to interact with that trading partner. That interaction with your trading partner could be an online interface, direct integration or other methods provided by your EDI provider. In many cases, an EDI Provider can be providing or enabling a capability within your …

Retail Math Formulas We Keep Coming Back To

Each of the components required for the use of retail math are carried in within EDI documents traded between retailer and manufacturer (Supplier) with few exceptions.  While there is some argument within industry segments as to terminology and formulas – these are common.

Average Inventory
Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) ÷ 2

Basic Retailing Formula
Cost of Goods + Markup = Retail Price
Retail Price – Cost of Goods = Markup
Retail Price – Markup = Cost of Goods

Break-Even Analysis
Break-Even ($) = Fixed Costs ÷ Gross Margin Percentage

Breakeven = Fixed Costs / (Revenue – Variable Costs)

Contribution Margin
Contribution …

ASNs: Predictive or Definitive?

You have to love the dynamics in the ASN. You should recognize the one(s) you use and recognizing it probably don’t give it a second thought.

For those who don’t know, the 856 Advance Ship Notice (ASN) is used to notify your customer how you packed and shipped their order.  It lists the contents of a shipment, carrier information, and the shipping cartons. The 856 provides flexibility for you to describe the contents and configuration of a shipment at various levels of detail. It does other things, but the fascination for me right now is the packing configuration.

Companies must pack …

Reverse Logistics

Logistics could be defined by many as: The process of planning, implementing, and controlling the Efficient, cost effective flow of materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of meeting customer requirements.  Reverse logistics includes all of the activities mentioned in the definition above. The difference is reverse logistics encompasses all of these activities as they operate in reverse. As a result our definition of reverse logistics would be: The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, …

UN/EDIFACT Documents

In 1986, the United Nations Economic Commission for Europe (UN/ECE) approved the acronym “UN/EDIFACT,” which translates to United Nations Electronic Data Interchange for Administration, Commerce and Transport. UN/EDIFACT is an international EDI standard designed to meet the needs of both government and private industry.


270-A1 Eligibility, Coverage or Benefit Inquiry
271-A1 Eligibility, Coverage or Benefit Information
276-A1 Health Care Claim Status Request
277-A1 Health Care Claim Status Notification
278-A1 Health Care Services Review — Request for Review
278-A3 Health Care Services Review — Response to Request for Review
820-A1 Payment Order/Remittance Advice
834-A1 Benefit Enrollment and Maintenance
835-W1 Health Care Claim Payment/Advice
837-Q1 Health Care Claim: Professional
837-Q2 Health …