POA Line Status Using the Purchase Order Acknowledgement
Introduction Electronic data interchange (EDI) and its use as an electronic commerce standard have evolved dramatically over the last 20+ years, with some of the greatest advancements coming in the last five to ten. EDI versions and dictionaries now manage a broad scale of line item updates that cover the spectrum of business process standards for supply chain management across the healthcare industry. Demand for real time information is continually increasing, and the need for accurate and actionable data is more critical to business than ever. Within the healthcare landscape, practices have evolved beyond the original EDI status use cases, creating needs for multiple status codes relaying similar information. Alternate codes arose for backorders and item changes, while other status codes are being used to relay messages in a more implicit manner. GHX has reviewed our customers use of line item status codes and is supporting the community by grouping these codes into a best practice standard. Since 2001, the GHX Integration teams have been working to drive best practices that help deliver a consistent customer experience across trading partners. This document supports that effort by providing a reference document for clear definition of EDI usage as well as expectations for future business metrics and historical trends such as exception reporting, fill rate, backorder rate, and Perfect Order indicators.
Common Business Scenarios and Expected Supplier Response The below use cases are broken into two sections: header and line level. References to specific EDI codes refer to segments as defined by EDI specifications for versions 4010 and 6020. We will look at three specific buckets for use and common grouping: accepted, backordered, and rejected. Order Acknowledgement: Header Level Status The BAK02 element contains the single code that most accurately identifies the status of all line items. This code is then supplemented by line level ACK element codes contained within the ACK01 element at the line level. The most commonly used codes are outlined below. The RJ status should not be used unless all line items are rejected within the body of the document. Likewise, the AK status should not be used unless the entire order is being accepted. AC RJ Acknowledge With Detail and Change Rejected No Detail These alternate accepted codes indicate additional context: AK AD AE Acknowledge No Detail or Change Acknowledge With Detail, No Change Acknowledge With Exception Detail Only Line Level Exception Status Handling The ACK segment contains the single code that most accurately identifies the status of the specific line item. Proper use of the element includes the status element and the corrected data within the appropriate fields. Users should refer to the published EDI data specifications for the specific requirements of segment formatting. Accepted Line Items (with/without changes) Accepted (def): In an ordering cycle where product is available, this describes the process where the order will be automatically shipped to the party placing the order, unless canceled. Accepted With Changes (def): Line item is accepted as outlined above, but includes data that has changed from the submitted purchase order.
The below table outlines statuses considered to indicate a positive response for the purposes of aggregating data and calculating exception rates. These status codes tell the user the line item will be filled as requested, have exceptions that should be reviewed by the buyer organization for accuracy (e.g., unit price, part number, etc.), or provide insight into the seller organization s order processing to indicate that an item is no longer available or is on hold. Status AA AC AR AT IA IC IE IF II IM IH IP IS IW NA SC IQ Definition Item Accepted - Order Forwarded to Alternate Supplier Location Item Accepted and Shipped Accepted Released For Shipment No Description Available Item Accepted Item Accepted - Changes Made Item Accepted - Price Pending Item on Hold, Incomplete Description Item Invoiced Item Invoiced - Changes Made Item On Hold Item Accepted - Price Changed Item Accepted - Substitution Made Item on Hold-Waiver Required None Accepted and Shipped with Changes Item Accepted - Quantity Changed The many types of accepted statuses can relay other critical information as outlined in the following table. These are examples and not inclusive of every scenario, but address the majority of updates that require action by the buyer organization. Incorrect Unit of Measure (UOM) Incorrect Price IC Item Accepted Changes Made Correct UOM, Updated Quantity IP Item Accepted Price Change Corrected Price
Item Substitution IS Item Accepted Substitution Made Vendor Part Number, Associated UOM, Updated Quantity Multiple Item Changes (e.g., incorrect UOM and incorrect price) IC Item Accepted Changes Made Corrected UOM, Corrected Unit Price, Corrected Vendor Part Number Item Fulfilled from Alternate Site (e.g., alternate warehouse/supplier) AA Item Accepted - Order Forwarded to Alternate Supplier Location Quantity Backordered Items Backorder (def): In an ordering cycle where product is unavailable, this describes the process where the order will be held until available and automatically shipped to the party placing the order, unless canceled. Backorders are typically communicated in response to specific lines of a purchase order that are not shipped with the original order and can be communicated [in] a Purchase Order Acknowledgment (855) or as appropriate. 1 The most common status codes indicate that all, or some, of the line item quantity will not be delivered by the requested date. The buyer organizations must then need to determine if the products will need to be obtained from alternate sources, or if the delays are acceptable and will meet the needs of their organization. The codes below create a neutral or negative exception to the line status creating an actionable event for the buyer to review. Status BP IB SP Definition Item Accepted - Partial Shipment, Balance Backordered Item Backordered Item Accepted - Schedule Date Pending 1 Source: http://www.healthcaredistribution.org/ir_issues/pdfs/2012-04-18-productavailabilityguidelines.pdf
The three backorder status codes have specific use cases and are used commonly throughout the industry. Quantities and/or line items that are acknowledged with these codes are also supplemented with additional elements to relay information relevant to that code. Entire Line Item Backordered (opt: known delivery date) IB Item Backordered Partially Backordered Line Item Quantity, Expected Delivery Date (optional) BP Item Accepted Partial Shipment, Balance Backordered Quantity Backordered, Paired with Additional Segment with Accepted Status and Quantity Item Backordered Unknown Expected Ship Date SP Item Accepted Schedule Date Pending Quantity Rejected Line Items Rejected (def): In an ordering cycle, where product will not be fulfilled by the seller due to product unavailability, discontinuation, invalid data, or other valid reasons. The rejection status codes have specific use cases and are used commonly throughout the industry. These statuses are the most commonly used and understood by GHX customers, and normally require action by the buyer organization. These codes create a negative exception in the calculations for exception management, and a neutral exception on the fill rate, backorder rate, and Perfect Order indicators for the supplier community. Status ID IR R1 R2 R3 R4 Definition Item Deleted Item Rejected Item Rejected, Not a Contract Item Item Rejected, Invalid Item Product Number Item Rejected, Invalid Unit of Measure Item Rejected, Contract Item Not Available (Discontinued) By definition, the status codes reflect the complete message, so no additional detail is required.
Conclusion EDI and its use as an electronic commerce standard have evolved dramatically over the last 20+ years, with some of the greatest advancements coming in the last five to ten. The ability to respond to purchase orders with detailed statuses allows for real time analytics that drive additional automation and savings within the healthcare landscape. By updating and enhancing the aggregate groupings over time, GHX and the industry can continue to identify areas for improvement between trading partners and throughout the supply chain. Continuous review of e-commerce practices drives more accurate data for scorecards, volume reporting, supply chain trends, and overall commitment to the community to achieve the Perfect Order. GHX is committed to reviewing and enhancing our calculations and analytics so we can provide our customers with accurate data and performance information. This encourages the collaboration and communication needed to achieve best practice levels for a more efficient, cost-effective healthcare supply chain. Sources and Additional Reference Material EDI Minimum Data Requirements 4010 v38x, GHX Gregg Starkel and Aaron Barrett, Supplier Integration, GHX American National Standards Institute (ANSI) X12 EDI Standards http://www.x12.org/ HDMA EDI Guideline for a Purchase Order Acknowledgment (855), Healthcare Distribution Organization http://www.healthcaredistribution.org HDMA Order to Cash Guidelines_01_12_2011, Healthcare Distribution Organization http://www.healthcaredistribution.org HCSCR - Healthcare Supply Chain Research http://www.hcsupplychainresearch.org