Part 3 of 3 in our inventory management series.

Inventory and Order Fulfillment: From Promise to Delivery

The final piece of the inventory puzzle is fulfillment: making sure the inventory you promised on the purchase order is actually allocated, picked, shipped, and communicated back to the customer. This post covers how to avoid oversell, allocate inventory to orders, and use EDI 856 (Advance Ship Notice) and inventory data to keep retailers informed from order to delivery.

The Risk of Overselling

Overselling means accepting or confirming orders for more than you have available. It leads to:

• Backorders and delayed shipments.
• Chargebacks or penalties from retailers.
• Lost trust and strained relationships.
• Extra labor to split shipments, substitute, or cancel lines.

The fix is to tie order acceptance and fulfillment to real inventory: check availability when the order arrives and, where possible, reserve or allocate stock so the same unit isn’t promised twice.

Allocating Inventory to Orders

Allocation (or reservation) means linking specific inventory—or a quantity from a pool—to a specific order. Once allocated, that quantity is no longer “available to sell” for other orders. Benefits include:

• No double-promising: Each unit is committed to at most one order.
• Clear pick lists: The warehouse knows exactly what to pick for each order.
• Accurate visibility: Reports and EDI 846 (if you send available-to-sell) reflect what’s left for new demand.

Allocation can happen at order entry (when you receive the 850), at a batch run (e.g., nightly), or at pick release—depending on your process. The important thing is that it happens before you promise a ship date or send a confirmation that implies you have stock.

When You Can’t Fully Allocate

Sometimes you accept an order with one line (or more) short. In that case:

• Backorder: Reserve what you can, and plan to ship the rest when stock arrives. Communicate the backorder and revised dates to the customer.
• Partial ship: Ship what you have and send an EDI 856 for that shipment; send another 856 when the remainder ships.
• Substitute or cancel: If your partner allows it, offer a substitute or cancel the line and update them promptly.

Having accurate, real-time inventory makes these decisions possible; without it, you discover shortages too late.

Fulfillment Flow: From Order to Ship

A typical flow looks like this:

1. Order received (e.g., EDI 850) → Validate and, if desired, allocate inventory.
2. Order released to warehouse → Pick list reflects allocated (or available) stock.
3. Pick, pack, ship → Inventory is reduced; shipment is recorded.
4. Advance Ship Notice (EDI 856) → Sent to retailer with quantities, carrier, tracking, and dates so their system can update and plan receipt.
5. Invoice (EDI 810) → Sent after delivery (or per trading partner rules) for payment.

At each step, inventory and order status should stay in sync so that your numbers, your warehouse, and your customer’s system all tell the same story.

Using EDI 856 to Keep Retailers Informed

EDI 856 (Advance Ship Notice / ASN) tells the retailer what you shipped, when, and how. It typically includes:

• Shipment and order references.
• Line-level quantities shipped (and any backordered).
• Carrier and tracking.
• Expected delivery date.

When you send 856 promptly and accurately:

• The retailer can update their inventory (in transit, then received) and plan replenishment.
• They can trigger receiving and pay you according to their process.
• You stay in compliance with their vendor requirements and avoid chargebacks for missing or late ASNs.

Your 856 should be generated from the same shipment and inventory data you use internally—no re-keying, no mismatch between what you think you shipped and what you told them.

Inventory Data Through the Fulfillment Cycle

From order to delivery, inventory data should flow in one direction: truth in one place, then shared everywhere.

• At order entry: Available inventory drives what you can promise; allocation reserves it.
• At pick/ship: Deductions and movements update the same source of truth.
• In 846: If you send inventory advice, it reflects post-shipment (and post-receipt) levels so the next round of 850s is based on current availability.
• In 856: Quantities and dates match what actually shipped.

When inventory, orders, and 856 are aligned, you reduce manual work, cut errors, and give retailers the visibility they need to trust your fulfillment.

Conclusion: Inventory as the Backbone of Fulfillment

Inventory management isn’t separate from order management—it’s the backbone. In this series we covered:

• Part 1: Basics—one source of truth, accuracy, and connection to EDI 850 and 856.
• Part 2: Visibility—stock levels, reorder points, reporting, and EDI 846.
• Part 3: Fulfillment—allocation, avoiding oversell, and using 856 to close the loop.

Getting inventory right improves fill rates, keeps retailers happy, and makes your operations predictable and scalable. Start with the basics, add visibility and reporting, and tie it all together in fulfillment so every order you accept is one you can deliver.

Ready to streamline orders and inventory together? OrderSync helps you process EDI 850s, validate and match orders, and integrate with your systems so inventory and fulfillment stay in sync. Explore our EDI visualizer or get in touch to see how we can support your inventory and order workflow.

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Series: How to Manage Inventory

• Part 1: Inventory Management Basics
• Part 2: Inventory Visibility and Reporting
• Part 3: Inventory and Order Fulfillment (this post)