Search
Close this search box.

New Solution for JIT Ordering within Infor Lawson

Learn how to optimize Just In Time (JIT) ordering in healthcare supply chains and maximize the benefits of the 856 Transaction Set. Discover the solution to avoid common pitfalls, eliminate the need for multiple PO vendors, and streamline your EDI processes.
JIT Ordering

AdobeStock_34742192

 

Busting the Myth: Are Two PO Vendors Needed for JIT Ordering?

Nearly every supply chain in healthcare depends on a primary distributor to supply their hospitals, surgery centers, and clinics.  Distributors often use a process to support their customers called Just In Time (JIT) ordering, enabling them to keep a large quantity of high usage items locally stocked in their Lowest Unit Of Measure (LUOM), allowing the distributor to provide next day deliveries and other ad hoc capabilities.

An EDI Transaction Set that pairs beautifully with this setup is the 856 Transaction Set for performing Auto-Receiving with Advance Shipment Notifications (ASN).  The problem with the 856 is that it will only work if the quantity has an exact match or if the quantity is 0.  Any partial orders cause the line to fail its auto-receiving and it hangs up waiting for the item to be delivered, which will never actually arrive.  The reason is that the cancel backorder flag in Infor Lawson is not triggered on partial quantities, and therefore prevents the order from being fulfilled. This attributes to Invoices Not Received (INR) errors or problems preventing items from reordering.  These obstacles can discourage folks from utilizing 856s often resulting in material staff performing “Add Receive All” commands in Lawson.  This command assumes that all items ordered arrived with their full quantities also contributing to errors and inventory count mismatches.

The other major problem with 856 is that organizations often want to auto-receive their JIT orders, but not their Bulk orders. This contributes to folks unnecessarily separating these two out into individual PO Vendor records, which prevents the invoices from differentiating between the two vendors when it comes back into Infor Lawson. This can easily be mitigated by using a Vendor Purchase From or Vendor Location record.

How can we maximize the benefits of the 856 with the primary distributor?

The short answer is to take full advantage of YNQ within EDI, which is a custom segment that can be used to populate the Cancel Backorder flag for these partial quantity scenarios, avoiding the pitfalls mentioned earlier.

For organizations that have yet to reach their potential in supply chain excellence with their primary distributor, there are a number of leading practice approaches that can be taken to assess, remediate, and optimize EDI. As a healthcare SCM leader in the Infor community, ROI often hears from providers that they:

  1. Find only limited benefits from 856 Auto-Receiving
  2. Spend too much time manually adjusting inventory
  3. Setup two vendors for Just in Time (JIT) ordering as way to mitigate an increase in fill/kill order activity for low unit of measure products

In this article, you will find that there is a more cost-effective alternative to the JIT ordering challenge, eliminating the need to setup and manage contracts with multiple distributors, which can be inefficient. As an Infor user, it is important that you are aware of system changes within your ERP system and your distributor EDI processes that can benefit your approach to this issue.

 

ROI Bridges the Gap with Primary Distributors & Infor

In working with common distributors such as Medline and Owens & Minor on a regular basis, ROI has observed the buyer burden of managing multiple contracts across our healthcare customers. Although hundreds of vendors are utilized by healthcare providers, typically one provides 50% or more of their supplies. Instead of doing things as they have always been done, our EDI and SCM Informatics Consultants have created a better solution by engaging:

  • Infor to add a field in their system called YNQ (yes, no, question) that could be used to initiate and notify of order cancellations in real-time
  • GHX / EDI VAN to allow YNQ field to pass as a part of their standard
  • Medline and Owens & Minor to utilize the YNQ field.

By creating this new solution, organizations are more easily able to use a single vendor record for both of the distributors JIT and Bulk accounts, which avoids system errors and manual reconciliation activities.  It is imperative that supply chain and materials staff work together to make the distributor as efficient as possible.

For those using two Infor PO Vendor records to manage their distributor and want to leverage the YNQ option, one must first merge the two into a Vendor and Vendor Purchase From.  This will require careful realignment of your current contract and item data. ROI has created a methodology to expedite this process. Our approach offers a thorough testing plan, visibility, and expert guidance through every step of the process.

 

Real Client Story. Real Results.

Here is a real story of an organization who leveraged the YNQ solution to simplify the system setup for their distributor.  The common standard most organizations use to setup their main distributor is to create two po vendor records, one for the distributor’s bulk account, or inventory, orders, and the other for the fill/kill low unit of measure orders. The LUOM is set to cancel backorders when the received amount is less than the purchase order amount or zero.

The problem with this setup is it requires the system configuration to be perfect or the organization experiences instances where the bulk order is killed, or fill/kill orders appear open in the system when the distributor has cancelled the order on their side.

By implementing the use of the YNQ segment, this organization was able to condense the two vendors into one, and increased their receiving accuracy.  The receiving accuracy increased because the fill/kill information was provided directly from the distribution in the EDI856 file using the YNQ segment, and not derived from the two-vendor setup using the cancel backorder setting.

 

Before Moving to CloudSuite, Leverage Single JIT Vendor Solution 

For those who are on v9, v10, or even planning to transition to Infor CloudSuite Financials & Supply Management, EDI efficiency must not be overlooked. To eliminate old roadblocks, reduce manual effort, reduce matching issues, and utilize available system configurations must be a part of the transformation plan. This will create a cleaner system going forward, allowing each organization to maximize their technology investment.

In efforts to improve your EDI capabilities, increase your match rates, and create cost efficiencies, consider leveraging ROI Healthcare Solutions to configure YNQ, merge your vendor data, cleanup your item master and pricing, test its accuracy, and assess you against the “perfect EDI score” with our proprietary health check program.

Contact ROI for EDI Help | info@roihs.com | 678.270.2867

Share:

More Posts

Phoenix, Arizona, USA Cityscape

Post CHIME23 Fall Forum Focus Group Follow Up

CHIME23 Fall Forum was all about keeping up with changes in the healthcare industry: from changing workforce demands, to patient needs, to changing the way patient care is delivered by incorporating artificial intelligence into patient care strategies. ROI’s focus group discussions also reflected change – changes CIOs need to consider to better manage the tools

Patient in a hospital bed with IV drip

Improving Patient Experience through Artificial Intelligence

The patient experience is a crucial part of healthcare. Artificial intelligence (AI) and machine learning help by making sure patients are seen at the right time, processed correctly, and supported through their care. In this article, we’ll look at how AI could improve these three aspects of the patient experience. 

Iot or Internet of things concept on wooden blocks.

Internet of Things in Healthcare

It’s no longer news that the healthcare industry has adopted technologies such as artificial intelligence (AI) to its advantage. Organizations are always trying to improve quality, reduce costs and ensure patients have quick access to care. One major technology in use is the Internet of Things (IoT). This technology involves the collection and analysis of

Translate »
Scroll to Top