There's important news regarding electronic data interchange, better known as EDI. Some major brand marketers are aggressively expanding their connection with retailers in the area of direct store delivery. These developments couldn't come at a better time. It sometimes seems that EDI has been around since the invention of the telephone. One of the roadblocks to progress is proprietary systems vs. those driven by industry standards. Most of the activity remains confined to purchase orders and invoices. To make matters worse, EDI has been getting some bad press lately, courtesy of the housewares industry. For the benefit of the technically challenged, EDI simply is the computer-to-computer exchange of information between trading partners using a common language or standard. For example, the retailer sends a purchase order to the supplier, and the supplier later sends an invoice. This is the most common "transaction set" today to replace the long and winding paper trail. Among the two dozen others: promotion announcements, price information, product activity data and direct-store-delivery.
You would think that computers talking to computers would be more efficient and more accurate than people talking to people. The folks at the National Housewares Manufacturers Association believe that something is being lost in the translation. About 70% of EDI transactions require manual intervention, says the consulting firm Coopers & Lybrand, which studied the issue for NHMA. Reasons for this include mismatch of pricing and promotion, mismatch of invoice or bill of lading with the order and misunderstanding about the "basic deal." Tom Conley, who heads NHMA, says, "If people change things like deductions and allowances at the last minute, then all the EDI in the world isn't going to help."
So EDI can't flourish until the relationship between trading partners improves. To help, the association has just unveiled an initiative called Great Performance Alliances (see Brand Marketing's Feb. 12, 1996, issue, Page 12). This effort is commendable. However, nobody believes that progress on EDI should be suspended until slotting allowances are better understood by brand marketers. There was plenty of good news about EDI at the Food Marketing Institute's MarkeTechnics convention last month in New Orleans. For example, Anheuser-Busch and Ambassador Cards are using EDI to improve DSD operations with retailers (See Pages 1, 28 and 29).
