This Week in IDEA | October 10, 2007

New IDEA Customer: Connexion Electric Supply, Inc.

Connexion Electric Supply, Inc., a distributor from Buffalo Grove, IL, became an IDEA customer on October 3, 2007. They will be taking advantage of the cost saving features and reliability of Industry Data Exchange (IDX) and will be relying on the Industry Data Warehouse (IDW) for their suppliers’ product and pricing information. Connexion ES is a proud member of Equity/EDN. Welcome Aboard!

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New IRD CERICOMX® Customer

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 supplier: 

•          Tootsie Roll Industries

This company 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, IRD Product & Customer Support Manager, at (703) 562-4624.

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IDEA and A-D Form Partnership

Affiliated Distributors (A-D), the largest wholesale buying and marketing group in North America, has signed an agreement with IDEA to move all of its electronic transactions through IDEA's Industry Data Exchange (IDX).

In addition, A-D will encourage its electrical distribution member affiliates to switch their electronic (EDI) transactions to IDX. This move will provide greater efficiencies for the A-D affiliates and support an electrical industry wide initiative.

Industry Data Exchange (IDX) enables manufacturers, distributors, and service providers to conduct partner-to-partner electronic business on an Internet based network using EDI, XML, Flat File or Web Form transaction sets. Activant Solutions provides the core network services. IDX also provides direct connections to other similar Internet based networks.

"A-D makes every effort to provide leadership to its distribution members," said David Oldfather, Vice President of the Electrical Supply Division, A-D. "This move will help improve efficiencies and continue to encourage standardization of electronic communication for distributors. We encourage manufacturers and affiliates to follow suit and support this industry wide initiative."

”Our core mission has always been to provide tools that allow companies to be more efficient. The agreement with A-D is a great stride towards overall industry improvement and we are proud to be a part of this,” said Mike Rioux, President, IDEA.

About A-D
Comprised of over 370 independent distributor companies with over 3,000 locations in the U.S. and Canada, A-D's membership commands over $24 Billion in sales across five industries: electrical supplies, industrial supplies, plumbing supplies, HVAC equipment and supplies, and pipe, valves and fittings. A-D is committed to the success of the independent distributor. A-D differentiates itself from traditional buying groups by building positive, marketing-oriented relationships between members and suppliers. Year after year, A-D members in every A-D division have grown faster than the industry as a whole. Affiliated Distributors works to level the playing field for the best independents in the five industries served and works to ensure that the suppliers treat members fairly are treated fairly in return. For 26 years, A-D has been proud to say, "We stand with independents" and we always will.

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Top 5 Reasons to Outsource Your EDI Operation

EDI is a critical business function, and like many other functions in a company, it can be outsourced. In the early days of EDI, a company would purchase an EDI system and assign someone from the IT department to look after it. Over the years, the technology has evolved. Trading relationships have expanded, and the cost to support an in-house EDI system has increased. Outsourcing EDI was not an option until the Internet came along and offered alternatives.

Outsourcing your EDI operation is now a viable option. The objective is not to eliminate jobs, but to become more efficient in a very competitive global economy. It is not economical for some companies to purchase software and dedicate staff to an in-house EDI system. Other companies have come to the realization that they should focus more time on their core business, and less time on operating an EDI department.

Here are the top 5 reasons to outsource your EDI operation: 

1.  Reduce operating costs

There are many costs involved with operating an in-house EDI system, which makes this the number one reason for outsourcing.

Infrastructure. This includes the one-time purchase of hardware, EDI software and communications software, plus the recurring cost of annual software maintenance, support and upgrades. An entry-level configuration costs $5,000 - $15,000, while a mid-level configuration costs $25,000 - $50,000. Enterprise configurations cost $50,000 to $150,000 or more. The annual maintenance cost is 15% - 20% of the initial purchase price. At all levels there are additional costs for network security, backup and disaster recovery.

Staff. Some of the activities required to operate an EDI system include setting up new trading partners, mapping and integrating new documents, changing maps, co-ordinating trading partners, testing, daily monitoring, and troubleshooting problems. Small companies can operate an EDI system with one staff member, while large companies require more staff. Costs include salaries and benefits, plus the cost of hiring, training and managing an EDI department. An EDI analyst’s salary ranges from $50,000 to $75,000, and an EDI co-ordinator’s ranges from $25,000 to $50,000. The cost to hire an EDI consultant is $100 - $150 per hour.

Penalties and charge backs. EDI is a complex process, and trading partners in some industries are unforgiving of mistakes. Keying errors, incorrectly formatted transactions, missing data, duplicate transactions, failure to acknowledge a transaction, and not adhering to data transport schedules can all lead to penalties and charge backs. The Advance Ship Notice (856) is one of the most complex EDI transactions that result in penalties because of a late transmission, missing data or other errors.

2.  Improve responsiveness to customers

The use of EDI around the globe is increasing, with new companies adopting the technology, and experienced companies expanding their EDI programs by adding new trading partners and new documents. As demand for EDI increases, companies face the following challenges:

• Implementing new trading partners and documents on time
• Implementing and maintaining changes to trading partner implementation guides
• Providing support outside of normal business hours
• Dealing with customers’ global requirements 
• Meeting customers’ new technology demands, not just EDI
• Up-scaling infrastructure to handle the increased volume

3. Focus on core business activities

Keeping up-to-date with technology is mandatory for companies wishing to stay in business, and it can be a burden for some companies. EDI is one of the many technologies that can take the focus away from core business activities. Keeping track of changes to several trading partners’ EDI requirements is time consuming and costly. Every company should concentrate on activities that increase revenue and profits. There are many industry experts out there who can do a better job of running an EDI operation.

4. Pass on the complexities

E-commerce is never stagnant, and it is easy to fall behind in your EDI program because of the complexities involved. Large companies are more adept with technology and can use it to their advantage, while technology can be a burden for smaller companies. Through outsourcing, you can pass on the complexities of EDI to a service provider who has the expertise to readily respond to trading partners on your behalf.

5. Reduce frustration

One trading partner in an EDI relationship is usually ‘forced’ into EDI by their customers. Even though it’s a cost of doing business, there can be resentment, especially when unilateral penalties and charge backs are imposed. It can be a struggle to keep up with the EDI demands from customers, which causes frustration throughout the organization. Losing a key EDI resource creates additional stress, and can cause a company to fall behind, which can lead to costly errors until a replacement is adequately trained.

IDEA’s Industry Data Exchange (IDX) allows trading partners to send and receive EDI, EDIFACT, XML, Flat File, binary, or graphic documents via the internet, 24x7x365. Best of all, IDX is highly secure, allowing only authorized partners to view the documents you send.

Key benefits:

• Spend less time on tedious document exchange processes
• Easily track documents to ensure receipt
• Save at least 30% - and up to 90% - over other leading VANs

Contact Tom Guzik at (703) 562-4626 for more information about outsourcing your EDI operations using IDEA's IDX.

Excerpt from the whitepaper "Outsourcing Your EDI Operation". Copyright 2007 Vantage Point & Associates, Inc. Reproduced with permission.

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Note from the President: Data Synchronization Challenge

“There is a great difference between what is supposed to be, what we think it is and reality. Reality is that is not one man’s job, it is not one organization’s job to drive the outcome, it is all our jobs. So I challenge each of you to make the goal of what IDEA was founded to facilitate, information sharing and data synchronization, a priority at your company. No more lip service but a focused and dedicated effort by manufacturers to provide accurate and timely business information that your trading partners need and for distributors to stand tall and demand that your suppliers support this initiative. It is no easy task as even Lowe’s, Home Depot and Wal-Mart effort with their mandates for data synchronization are struggling with their suppliers. So take a message to Garcia and make the IDW a top objective at your company.”

Mike Rioux, President, IDEA

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Did You Know? IDW Hot Fact

IDW stores prices with six decimal values to the right of the decimal point. Most manufacturers provide prices with two decimal places, but IDW is designed to handle whatever the industry requires. Also, there are tools to tailor these prices for older systems that are designed for only 2 or 3 decimal places.

Contact Supriya Reddy, IDW Tech and Training Representative, at (703) 562-4616 to sign up for a free IDW training class to learn more about the Outbound Transformation tools. 

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