EDI: Internet revolutionizes EDI - electronic data interchange

Discount Store News, May 24, 1999

Sara Lee Branded Apparel, which already works closely with Target on collaborative forecasting, expects that Partners Online will prove valuable in its efforts to help the retailer streamline its supply chain operations. The reason: a more complete collection of data upon which to draw conclusions, explains Wallace Bulwah, director of logistics.

Other Internet- and extranet-related projects are bound to push the supply chain evolution even further. Notably, IBM recently introduced TransConnect, a vehicle through which manufacturers' carriers and freight forwarders worldwide may link up with IBM servers for the purpose of tapping into customers' order systems, booking shipments, transmitting waybills, executing load planning, tracking shipments, creating shipping histories and planning supply chain activities. Servers are accessible via EDI, the Internet or direct server-to-server links.

Ryder Integrated Logistics, a division of Miami-based Ryder System Inc., has announced plans to enlist TransConnect in serving its clients. "We believe TransConnect has the capability to address some of the major problems facing the shipping industry because it can integrate complex supply chain processes through a common network," says Larry Mulkey, president, Ryder Integrated Logistics. "This can help move product to market sooner at potentially lower costs."

Meanwhile, representatives of high technology suppliers and retailers, including Microsoft, Compaq, Ingram Micros, CompUSA and others, have formed a standards organization dubbed RosettaNet. The group is developing a common language and a set of more than 70 standardized partner interface processes (PIPs) geared for use in electronic communication among high-tech manufacturers, their suppliers and the merchants that sell their products. Pilot implementations are slated to get under way this summer notes RosettaNet board member Honorio Padron, CompUSA's senior vice president of process engineering and chief information officer.

"Everybody's going to speak the same language and the same way; the processes that we're going to undertake for upgrading catalogs, placing orders, etc. will be common processes," Padron asserts. "The hypothesis is that [standardization] will lower costs significantly," with savings shared by trading partners and, eventually, passed on to consumers.

Toward an identical end, a subgroup of the Voluntary Industry Standards Committee (VICS), which formulates industry standards for general merchandise in such areas as EDI and bar coding, is setting recommended standards for collaborative planning, forecasting and replenishment (CPFR) via the Internet. The CPFR subgroup includes executives from Kmart, Wal-Mart, JCPenney, Staples, Kimberly Clark, Kodak, Levi-Strauss, Mead and Procter & Gamble, among others.

Paul Benchner, chairman of the VICS board of directors, says the standards-based on process models that leverage distributor and manufacturer competencies-will be reviewed shortly. On June 18, the board will make a decision as to whether to move forward immediately with the recommendations or get further information on the CPFR effort.