OUTSOURCING ADDS EDI FUNCTIONALITY FOR KMART CHAIN

ADAM BLAIR

TROY, Mich. -- Along the way to moving all its merchandising, purchasing, payment and related transactions from paper-based communications to electronic data interchange, Kmart discovered that its in-house information technology resources were not up to the challenge.

"We had computer systems and processing time capable of handling 1,000 different vendor document combinations," said Leonard Maida, director of implementation services at Kmart here. To fulfill the company's paperless EDI vision, however, "we needed to be able to handle 8,000 such document combinations, with a volume of 80 million to 100 million [inbound and outbound] transactions per year."

Rather than seek a larger in-house staff, Kmart used a third-party company to "develop, implement and support an aggressive and dynamic EDI program," said Maida.

Maida spoke at Solutions '99, a user conference sponsored by GE Information Services, Rockville, Md, held Feb. 21 to 24 in Orlando, Fla.

The migration to an outsourced EDI solution took place from May 1997 to September 1998. Eventually, the number of Kmart employees working on EDI went from 17 to three, he noted.

Currently, Kmart and GE Information Services are handling more than two million inbound and outbound EDI transactions per day, said Maida. "Our eventual goal is to have no paper for transactions covering 2,100 stores, 13 hard-line distribution centers and four soft-line DCs," he said.