This Week in IDEA | May 02, 2007

New IDEA Customer: Sesco Electric Supply Co.

Sesco Electric Supply, Co., a lighting and electrical distributor from Lawton, OK, became an IDEA customer on April 24, 2007. They will be taking advantage of the cost saving features and reliability of the Industry Data Exchange (IDX2), using the Industry Data Warehouse (IDW2) to obtain their suppliers' product and pricing information and taking advantage of the low prices of the IDEA eCredit (IeC) Focus Reports. Find out more about Sesco ES here. Welcome aboard!

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New IRD/CERICOMX® Customers

IDEA, a 1SYNC Data Pool On-Board Solution (OBS) partner, implements suppliers that subscribe to the 1SYNC data pool using IDEA's IRD CERICOMX application. IDEA was recently assigned the following four suppliers:

- US Glove Company
- Renaissance Food Group, LLC
- The Sholl Group II
- The Hilsinger Company

These companies will be trained to use IRD CERICOMX®, an IDEA branded product for supporting and uploading supplier product information into the GS1 Registry® and GDSN via the 1SYNC Data Pool.

If you would like to learn more about the CERICOMX® product, please contact John Etrie, IDEA IRD Product Manager, here or at (703) 562-4624; or Tony Gaffney, IDEA CERICOMX® Implementation Manager, here or at (508) 386-0261.

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Automating Credit Work

Using vender eCredit, IDEA offers the industry the ability to streamline credit processing.

Mayer Electric Supply, headquartered in Birmingham, Ala., is one of three electrical distribution companies working with IDEA on automating its credit processing—by using the vendor eCredit.

“It would sometimes take two or three days for our company to come to a good decision on whether or not to grant credit to a new customer,” said Brenda Lovell, corporate credit manager for Mayer.

“Sometimes we could do it the same day, but it usually took time to pull all of the information to gether,” she recalled. “There are a lot of manual steps and processes in looking at a credit application.”

Today, the credit application process at Mayer is automated. “Now, 98% of our credit applications go straight through the system,” said Lovell. “On those, we’re granting approval in about 30 seconds.”

Lovell claims there is more than just time savings. “In 2006, before our company had implemented this new system, we approved approximately 800 customers who never purchased anything from us,” she said. “We think the problem was our turnaround time: A potential customer would come to us, ask for credit, and take the time to fill out a credit application.

“But by the time we had granted it, the customer had wandered away,” she continued. “That is not going to happen anymore. We are very sure that using eCredit is going to increase our sales.”

Building a tunnel

Mike Rioux, president of IDEA, noted that Mayer’s approach with eCredit will soon be typical. “We want to help distributors and manufacturers via online portals and hosted applications,” he said.

Essentially, Mayer takes advantage of the eCredit online portal. It has built its own scorecard—which each distributor will be able to customize, just as Mayer has. The service also allows Mayer to access a range of credit information. For example, Lovell included in the scorecard the personal credit rating of individuals—valuable in rating the credit of the many sole proprietorships that Mayer typically encounters.

“As we’ve automated the process, we’ve gained built-in consistency,” Lovell said. “We don’t look at a credit application unless it’s one of the 2% that don’t automatically go through—meaning there’s some thing there that merits our attention.”

Dan Dougherty of eCredit said his company offers a tunnel to the credit report ing agencies. “With this tunnel, Lovell and Mayer can go to alternative information sources,” he said. “Previously, she had to pay a premium, say, for information from Dun & Bradstreet.”

Turning their attention

Those who imagine layoffs following the implementation of this new service aren’t thinking like Lovell and Mayer. Because there is no longer a need to manually review hundreds of credit applications, the company’s credit department is now able to focus more of its attention on collections and credit reviews.

“We are also in the midst of working on regularly reviewing the credit status of our existing customer base,” Lovell said. “This is something we previously didn’t have the time to do. We’ve just gotten a start on this with the time we have been able to free up—we just be gan working with eCredit through IDEA back in May 2006.

“From one perspective, it’s shame on us—we haven’t stayed on top of existing credit lines like we should have in the past. Now we review each customer on an ongoing basis,” she continued. “Some customers will merit an increase in their credit lines, while others might see a decrease.

“We report this to salespeople,” she added. “It has to have value in increasing our sales when the salesperson learns that a given customer now has an increased credit line with us. Of course, when a credit line is decreased, that might well save us trouble in the future,” she said

How IDEA eCredit Works

What’s exciting about the IDEA relationship with eCredit is the potential for more electrical distributors—including those that don’t have a credit department—to make use of the service.

Here’s the concept: Distributors working with this automated credit arrangement will supply their accounts receivable files to the company. This information will be combined with data on customers that has been gathered from other sources.

An IDEA Credit Score will be developed on customers in the database. This number will be very much like the FICO score that mortgage lenders routinely apply to potential home buyers.

According to Dan Dougherty of eCredit, distributors who are members of IDEA, but not working with eCredit, will get a discount; others will pay a higher rate. An appealing aspect of this is automating the sharing of information on customers that is already in place between distributors. Another is the IDEA Credit Score—offering a handle on the credit-worthiness of a given customer, provided in a single figure.

TED Magazine April 2007
By Joe Salimando

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Distribution's Competitive Edge

Standardized, timely, and accurate information drives supply chain efficiency. When IDEA was founded in March 1998 as a joint venture of NAED and the National Electrical Manufacturers Association (NEMA), the founders’ vision was to provide a central repository for delivering standardized product and pricing information throughout the electrical industry to reduce costs for all parties involved.

The IDEA Standards Committee (see the side bar on the opposite page) was established to help make this vision a reality by developing data-formatting standards. The volunteers on the committee devote countless hours to developing electrical industry specific versions of open and public nonproprietary international and industry group standards, including the American National Standards Institute (ANSI) ASC X12, GS1, and the United Nations Standard Products and Services Code (UNSPSC).

Data-formatting standards in EDI and flat file formats are available for the EDI 850: purchase order, EDI 810: invoice, EDI 844: product transfer account adjustment (also known as a SPA credit
request), EDI 849: product transfer account adjustment response, (also known as SPA credit/discrepancy), and EDI 845: price authorization acknowledgement/status (used for SPA quotations and pricing). It’s time to put these to use across the industry.

Industry data-formatting standards reduce friction and gridlock within the supply chain—so that products can be delivered more efficiently, operations costs reduced, trading partner relationships improved, and internal business processes enhanced. They also enable manufacturers to prepare and communicate information in one format on a real-time basis when new products are added and product information is changed or updated.

In addition, data-formatting standards allow distributors to automatically download information from all manufacturers in one format in a real-time basis so business systems always contain the most up-to-date information. And once their systems
are up dated and the data synchronized, distributors can rely on their business systems for accurate price and product information, rather than calling manufacturers for up-to-date pricing every time a customer requests a quotation, providing better customer service.

Trading partners that adopt and use IDEA’s data-formatting standards have a competitive advantage over those who do not. Membership on the IDEA Standards Committee is not required to take advantage of the standards that the committee develops—but commitment to supply chain efficiency is.

TED Magazine April 2007
By Ann Adams

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DAC Hot Fact

IDW2 customers can immediately check the certification status of their suppliers, given that they participate in the Data Audit and Certification program (DAC). This can be found under the Subscribers Directory on the IDW2 web site for either Manufacturers or Distributors. Look to the far right on the screen to view manufacturer status.

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