NGA BACKS INTERNET EDI/EFT BUSINESS INITIATIVE

PATRICK SCIACCA

RESTON, Va. -- The National Grocers Association here is supporting an initiative to bring electronic data interchange and electronic funds transfer to the Internet, offering a lower-cost business-to-business communications alternative to the supermarket industry.

The Internet solution allows NGA member trading partners to perform EDI/EFT functions without the need for customized software and expensive system upgrades, according to Stuart Zlotnikoff, president of NGA Service Corp., a subsidiary of the NGA that develops a variety of turnkey operational programs.

"It's allowing all trading partners, regardless of size, to communicate," he said.

The solution, developed with input from the supermarket industry, allows distributors to improve their business efficiency by moving to paperless invoices, purchase orders and other EDI functions such as electronic payments, transaction tracking, inventory management, promotional information, advanced shipping notices and real-time pricing.

Fairway Foods, Bloomington, Minn.; K-VA-T Food Stores, Abingdon, Va.; Mitchell Grocery Co., Albertville, Ala.; and Piggly Wiggly, Richlands, N.C., have piloted or are in the process of piloting EDI/EFT Internet programs, Zlotnikoff told SN. To date, the primary pilot program applications of the new technology have been purchase orders and invoices.

Even though the new technology is in the early testing stages at Mitchell Grocery, Doug Masters, information systems director, hopes to see both dollar savings and freed-up staff from its use.

Mitchell currently uses a value-added network for its EDI communications, which charges on a per-character basis. The wholesaler uses the VAN about three times per day, and monthly charges are approximately $3,000. Masters believes that if the NGA-supported Internet solution works, these communication charges could be reduced by one-third.

According to the NGA, one $400 million wholesaler who has been using the Internet for EDI functions reportedly showed an annual savings of $300,000 using the new technology.

To use EDI through the Internet, distributors need to identify what EDI sets they want to use and identify the trading partner they want to communicate with. The transaction itself takes a nominal amount of time, according to Zlotnikoff.

The NGA is working with E-Com Systems/Orange Technologies, Gaithersburg, Md., and Concord EFS, Memphis, Tenn., to offer the Internet-based EDI.

In addition to lower costs, the Internet-based system does not require a distributor to translate data into different formats to meet a manufacturer's requirements, as is sometimes necessary when using a VAN.

Mitchell Grocery's Masters told SN that, with Internet EDI, he sends a flat file and then E-Com translates the format. Outsourcing this function should free some in-house staff who would normally be translating data, he said.