NEWARK, Del. -- A team of industry experts assembled by the Produce Marketing Association here has prepared a report on electronic data interchange, one of the best practices outlined in the Efficient Consumer Response initiative.
Under the direction of Doug Grant, director of information services for the David Oppenheimer Group, Seattle, an industry-wide EDI task force created a blueprint for an EDI system that would be applicable to all areas of the produce business -- from invoicing and payment to purchase orders and shipment confirmation notices. The resulting white paper discusses how produce businesses can implement and benefit from EDI. The document examines current EDI issues and offers recommendations to overcome barriers.
"The overall intention of the paper is to educate readers about what EDI is, what it can do for their businesses and how to make it work," said Grant.
The paper introduces ECR and its counterpart, Efficient Foodservice Response, and provides a historical overview of EDI, product identification and bar-code technology as it relates to grocery retail and the product distribution chain. It highlights potential business benefits and discusses current roadblocks preventing EDI from being widely implemented in produce.
It also recommends hardware, software and communications options to implement EDI technology. Grant said the options are related to how companies can link their product coding information, regardless of the system that is currently in practice.
"[EDI] offers such advantages as a reduction in data entry, telephone calls, faxes and expenses involved in mailing," Grant said. "It also allows for more timely and accurate updates of data, creates a better audit trail and increases the likelihood of invoices being paid on time."
EDI has been in use for over 25 years in various industries, and, according to Grant, has been used for tracking dry grocery goods for a number of years. He expects its use "will increase dramatically after the year 2000."
He said the produce segment has been slow to follow other industry segments primarily because of the difficulties in describing produce in comparison with grocery items. "Technically, we have tried to link the EDI practices for produce to what [retailers] are accustomed to for their dealings with dry goods," said Alicia Calhoun, industry efficiency specialist for PMA. "[Used] this way, the transactions are similar and therefore easier to implement."
Greg Zwanziger, director of electronic commerce for SuperValu, Inc. and task force member, said a lack of ready systems among some retailers makes it difficult to establish a standardized integration for EDI. However, he also said the top 10 or 15 shipper/growers are moving ahead swiftly and taking advantage of EDI's benefits beyond simple invoicing and ordering.
"This [report] lays a good foundation for helping the produce industry move forward and become more sophisticated," said Zwanziger. "The historical, manual way of operating is very time consuming and allows for greater error. EDI will allow retailers to track a particular item to its shipper/grower quickly and easily."
In addition to drafting the guidance document, two EDI subcommittees are being formed to work on product attribute standards and EDI transaction data elements. The subcommittees will also participate in events sponsored by the PMA to help further EDI use in the produce industry.
The EDI task force is made up of delegates from various segments of the produce industry. Besides retailers, the group also includes the Washington Apple Commission, the Canadian Produce Marketing Association and Sunkist Growers, Inc., among others.
Grant, Calhoun and Zwanziger agree that produce industry response to EDI's implementation has been very positive.
"This is a breakthrough for the industry," continued Grant. "These linkage possibilities were not available just a few years ago, and overall people seem very excited about the progression."
Grant believes the wave of the future is in binding companies together, allowing them to move product through the distribution chain with maximum efficiency. Investing in EDI, he said, is a step in the right direction.
"Implementation of EDI should be viewed as a journey, not an end in itself," he continued. "It will take an ongoing investment of skilled personnel, technology and financial resources to achieve success in the long-term."