WEST BRIDGEWATER, Mass. -- Officials at Shaw's Supermarkets here said it will be implementing a new program that will enable the retailer to do business with its small- and midsized suppliers electronically.
Shaw's spokesman Bernie Rogan said the retailer has contracted with Advanced Data Exchange, Newark, Calif., to provide electronic data interchange services for these suppliers. Shaw's already has a program in place to serve its larger suppliers.
By using EDI, suppliers and retailers convert paper transactions, like purchase orders and bills, into electronic transactions.
"We see a paperless society in the very near future," Rogan said. "Our goal is to get the best products while constantly building sales and improving speed-to-shelf. The electronic connection is a better value for all involved."
ADX will provide translation services, eliminating the burden of costly, in-house EDI implementations for smaller companies, Rogan said.
He would not comment on the cost of the service.
According to ADX officials, the system will enable about 500 suppliers to begin exchanging electronic business documents, such as purchase orders and invoices.
Shaw's officials anticipate its business transactions with small- and midsized suppliers will become more efficient and costs will decrease once the new system is in place. The system is expected to be operational within 90 days, officials said.
Rogan explained that it can take up to 15 manual steps for sign-off on a single, new product. Eliminating the paperwork reduces the potential for human error while dramatically cutting down on administrative hours, he added.
Shaw's has been dealing in EDI-formatted documents with its larger vendors through UCCnet, Lawrenceville, N.J., for roughly a year, Rogan said.
"This step is going to fill in the spaces," he said. "ADX is going to integrate directly into the UCCnet program and all of our vendors will be able to participate.
"There are so many products out there for our buyers to source. This way, even the smallest companies will have their face before the buyers."
With the advent of the electronic trading exchanges and use of more sophisticated Web-based computer languages, like extensible markup language, some industry observers had predicted the demise of EDI.
However, that has not happened. Moreover, industry observers have noted that many companies have committed millions of dollars to their EDI legacy systems and plan to continue to make the most of these investments.
"At Shaw's we don't decide to take on a project like this and change our minds overnight," Rogan said. "Our commitment to this concept is substantial."
An ADX associate said while suppliers participate voluntarily, Shaw's will enact a penalty provision for suppliers who are not compliant by charging suppliers for each paper invoice.
While some may cast retailers in the role of bully, forcing the initiative on their trading partners, Rogan said manufacturers are beginning to see the benefits.
"The larger companies were fairly quick to see the potential. The smaller guys are beginning to catch on.