The time has come when retailers may begin moving fast-forward with electronic data interchange.
Much of the technology required to make greater use of EDI for a broad range of applications has been available for some time. Until now, however, a number of factors, from security fears to corporate backing, have slowed the rollout of EDI.
But that is starting to change, at least according to some retailers interviewed by SN.
"EDI is not just a technical project, because from a technical perspective, I would have had it done five years ago," said Bonnie Van Overbeke, management information systems director at Kash n' Karry Food Stores, Tampa, Fla.
Dennis Wisdom, MIS director at Furr's Supermarkets, Albuquerque, N.M., cited the growing importance that EDI is assuming in the industry. "EDI hasn't yet become a requirement for doing business, but it probably will. More and more stores are doing it. It's on a roll."
The expansion of EDI for many applications had a slow start because, like all technological initiatives, it requires strong and consistent corporate backing before it can fully take hold.
In many respects that is changing, driven in large part by evolving business practices and needs. Today, EDI projects typically move forward only when contracts with vendors have been hammered out by a chain's marketing executives, Van Overbeke said.
The expansion of EDI is "based on the deals that can be worked out between manufacturers and our marketing group. They'll tell me, 'OK, we've worked out this deal, now go and put this vendor on.' They are the ones who negotiate who is going to pay what cost on the whole EDI network," Van Overbeke said.
"I'd love to see it go faster, but there's a lot of business issues involved. When we implement something like EDI, it costs us more in the short term, and so we really have to have plans for the long term," she said.
"You have to get the whole map with everybody on it before EDI is totally beneficial. Right now, until we get everybody on, you just don't see a whole lot of savings."
Another factor cited by retailers is apprehension about transmitting data considered classified, such as promotion and price change information, on a computer network.
"Most of my bosses really don't see [using EDI for transmitting promotion and replenishment data] within the next three to four years," said one retailer, who asked not to be named. "It's not something they want to do or are pushing for.
"It is a very competitive business," the retailer added. "They've done it the same way for so long. They've been cautious for so long and closely held on to all this data. It's tough for them to let it loose now."
But Kash n' Karry's Van Overbeke said telecommunications between retailers and trading partners are generally acknowledged to be secure enough to eliminate the possibility of sabotage for most applications.
"We're all going to have to address security issues involved in having information go across computer lines. But I think there's enough safety in the network so you won't have to worry about someone sabotaging the information, whether it's some college kid or whoever," Van Overbeke said.
But there still is some distrust of EDI at the corporate level, she admitted. "Every time we have a system problem, everyone says, 'Ah hah -- EDI! The computer did it again.' Also, once in a while things are transmitted on wrong days and transmissions sometimes get lost. When things go wrong, they really go wrong on a computer."
Retailers need to overcome their mistrust of using EDI for strategic functions, she stressed. "We need to be cautious and test everything to death almost. EDI is a way of improving the industry and getting some of the cost out of the system. But it is long-term." "EDI will take time," said Rick Rowan, manager of EDI communications at Fleming Cos., Oklahoma City. "A lot of reluctance is due to fear: Employees are concerned that their jobs are going away. And many simply don't like change."
Other executives, though, see a fundamental shift in attitude in support of EDI. "I see reluctance disappearing very rapidly, because the technology kind of pushes you in that direction," said Larry Elias, senior vice president of MIS at Pueblo Xtra International, Pompano Beach, Fla.
"What was interesting a few years ago was how shallow the penetration of EDI was," he added. "There were not a lot of transactions being done; it was just scratching the surface. It has changed in the last two years. I see a lot of activity now."
