SPICE™ Glossary / Exception management

Exception management

Exception management is the practice of detecting, prioritizing and resolving supply chain events that deviate from plan, such as missing acknowledgments, late shipments or mismatched invoices, before they reach customers.

An exception is either something that happened and shouldn’t have, such as a confirmed quantity lower than ordered, or something that should have happened and didn’t, such as a PO acknowledgment (EDI 855) that never arrived or an ASN (EDI 856) missing on the day of delivery. Supply chain exception management is the discipline of catching these early and getting them fixed.

It helps to separate two kinds of exceptions. Technical exceptions are failed or rejected messages, often flagged by a functional acknowledgment (EDI 997). Business exceptions are documents that processed correctly but describe a problem: a short shipment, a changed date, an invoice price that doesn’t match the order. Integration monitoring catches the first kind; the second needs the context of the order lifecycle.

A good process runs in a loop:

Detect: compare what happened with what should have happened
Prioritize: by customer impact, value and age
Resolve: assign an owner and involve the trading partner
Improve: find root causes and track them on a supplier scorecard

How SPICE™ handles it

SPICE Insight™ connects orders, acknowledgments, changes, shipments, receipts and invoices into one lifecycle and flags business exceptions such as missing acknowledgments, late ASNs, quantity changes and stalled invoices. Your team can notify the responsible person or trading partner and keep the discussion and documents with the transaction. It can run alongside your existing EDI platform.

See visibility and exception management on SPICE™.

Related terms

Order lifecycle visibility

OTIF (on time in full)

Perfect order

Supplier scorecard

Functional acknowledgment (EDI 997)

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FAQ

Frequently asked questions

What is a supply chain exception?

It is any event in an order's life that departs from plan: a missing or late document, a quantity or date change, a short shipment or an invoice that doesn't match. Left alone, exceptions turn into late deliveries, chargebacks and disputes.

How is exception management different from EDI error monitoring?

EDI error monitoring checks whether messages were received and processed. Exception management checks whether the business outcome is on track, which requires connecting each message to the order it belongs to.