The launch of the IDW2 industry data warehouse (IDW) by April 1 will be one of the biggest milestones in the seven year history of the Industry Data Exchange Association (IDEA), Rosslyn, Va. As with any overhaul on this scale, it's pivotal moment for IDEA. Approximately 70 electrical distributors and more than 150 manufacturers now use the IDW as a central data repository of standardized supplier product and pricing data.
Launched in 1999, the IDW now contains product data for more than 1.5 million stock keeping units (SKUs) - an estimated 85 percent of all electrical product SKUs - and is delivering as promised for its earliest devotees. They are getting its well-documented cost savings, reductions in data errors and increases in bottom-line profits. IDEA says IDW delivers distributors an average of $73,000 in profits for every $10 million in sales, and offers manufacturers an additional $97,000 in profits for every $10 million of their sales.
Although relatively few electrical distributors now participate in the IDW, the numbers are deceiving; many IDEA distributors rank high on Electrical Wholesaling's Top 200 listing. But IDEA's board wants more users, and they voted for the IDW2 upgrade to propel growth for IDEA.
IDEA's supporters can take heart in the popularity of two other IDEA product offerings. According to information posted on http://www.idea-inc.org, approximately 120 electrical distributors and more than 50 manufacturers use the IDX2 electronic network to conduct partner-to-partner business document exchange on an Internet-based network using EDI, XML, flat file or Web form transaction sets. IDEA says IDX2 users can enjoy 40 percent to 90 percent cost savings over any other EDI valueadded network (VAN).
IDEA's Data Audit and Certification (DAC) program, launched in November 2003 to assess the accuracy and population of IDW data fields and ensure that maximum data synchronization is achieved between trading partners, already has 125 manufacturers on-board.
Mike Rioux, IDEA's president, has been managing the IDW and IDEA's other products since April 2000. He says in building IDW2, IDEA tapped many different industry resources to build the model, which will be betatested in early March and go live by April 1.
"It took us six months to ask all of the right questions and bring electrical distributors and manufacturers to the table," Rioux says. "Despite all of the efforts to standardize information, manufacturers and distributors don't talk to each other the same way, and they certainly don't go to market the same way."
SPEAKING THE LINGO
A big improvement in IDW2, says Rioux, is that it will be easier for manufacturers and distributors to teach their business systems to interface with the IDW2. In the past, users often had to have their business system provider customize their software so it would communicate properly with the IDW.
"Instead of trying to force everybody into the same model, we felt it was very important that we were very flexible at the front-end for the manufacturer and the distributor on the back-end," he says. "For the distributor, what that really means is that instead of getting their software vendor to modify their software to meet our delivery mode, we are going to modify the end product and create a map for the customer regardless of what software they use.
"We have spent time with each of the key software vendors and asked them for their vendor formats and their data structure. When a distributor says they are using a particular company's software, we will give them the existing map for that product. If they need modifications to it, we modify it. We are trying to avoid having the software company make any modifications. That's time-consuming, costs money, and has an enormous downstream effect. We figured it was easier for us to do it. There had been so many obstacles."
Data input has also been simplified. The IDW2 accepts data in several key formats:
- EDIPro 832
- EZView/PIPE (EVP)
- i2/TSC PFMS 2x80
Another key difference between IDW2 and its predecessor is that distributors can utilize the resource at four different levels, depending on their technical sophistication. It's part of IDEA's push to make IDW2 more user friendly. The four levels are:
Core. IDW2's most basic level is intended for distributors with older legacy systems - even DOS-based software. The core level provides the most basic transactional data.
Extended. At this level, users get additional data attributes for each product record such as weight and packaging, as well as all of the basic transactional data available at the core level.
Enriched. Attributed data includes detailed product specifications, images in thumbnail format, technical data such as Material Data Safety Sheets (MSDS), and engineering specifications. For instance, technical product data included for a lamp would include bulb type, wattage, color temperature and lumens; the product data could include a highresolution JPG image and engineering data such as beam spread.
Catalog. This level includes all of the content available in the extended and enriched formats. Users can take information from this format and build their own product catalogs. The product data shown on-screen in the"detail view" of the IDW2 catalog formatincludes the product's UPC number, catalog number, pricing information, a thumbnail image and other product specifications.
EASY DOES IT
Mike Rioux says another huge difference with IDW2 is that it's 100 percent Web-based, making data entry easier for manufacturers on the front end of the system, and allowing them and distributors to customize some aspects of the fields and view presented for each product record.
Additionally, IDW2 will provide users with messaging capabilities and viewable data logs. In the past, users didn't always have a clear idea on the status of new data in the system. Rioux says IDW2's messaging and report capabilities will provide constant notifications on the status of their data at all times.
A related feature is that every time a manufacturer provides an update or sends a load of information to the IDW2, it will go through a data-certification process to ensure that it's free of errors. Once the data has been audited, messages will be sent out to all authorized users.
Users will also be able to access their data without the multiple levels of authorization that were required in the IDW version. Rioux says one of the reasons the IDW was built with such stringent security measures is that IDEA's early proponents were very concerned with protecting the data and related intellectual property rights against hackers and other security issues. Rioux says the original authorization scheme had six levels in it.
"A manufacturer would put in a new price sheet in the IDW, and if they forgot to check the authorization for their distributors, if it wasn't current, the distributors didn't get the data. The IDW 'machine' itself always worked. But the management of the authorization scheme was complex. It was so complex that even people on the IDEA staff had a hard time managing it unless they used it all the time."
The IDW2 has a much simpler authorization scheme for user access. "We are not talking about nuclear weapons here, we are talking about electrical products and published pricing," he adds.
Rioux is particularly excited about IDW2's ability to provide data certification for electrical distributors, and believes this feature is where IDEA will get "the biggest bang for our buck."
"Electrical distributors will be able to take their own data and put it through IDW2's data validation process and get a status report and a validation of their own information," he says. "When they take their own information out and put it through the system, they will get a report that will measure the quality of their own information. It will help them synchronize their information with vendors much faster."
Key measures of the success of IDW2 will be how many more distributors sign on, and how many more manufacturers provide "direct data." With direct data, manufacturers control, update and manage their own product information. The early developers of the IDW were true crusaders in their quest to get manufacturers to provide nothing but direct data. However, third-party data sources such as I2/Trade Service, San Diego; and Material Express, Carlsbad, Calif., still provide data for the IDW for some manufacturers.
When Rioux joined IDEA almost five years ago, only 40 manufacturers were providing direct data; 155 manufacturers now feed data directly into the IDW.
Of those 155 companies, 125 firms have their data audited in IDEA's DAC process, and some distributor users won't even download data from the IDW unless it's DAC-certified.
DAC certification got a shot in the arm at the 2004 annual meeting of the National Association of Electrical Distributors (NAED), St. Louis, which co-founded and now owns IDEA along with the National Electrical Manufacturers Association (NEMA), Rossyln, Va. With the help of a creative NAED marketing campaign at that meeting promoting DAC certification, Rioux says manufacturers began clamoring to get their product data DAC-certified.
"Manufacturers were willing to do anything to get their DAC logo," he says. "At first it seemed like they did it because they didn't want to look bad. But as they looked into DAC, they realized that there was a value to it, and that if their data was all screwed up and didn't meet what the distributor needs, then they would have to do it.
"It's just as important for manufacturers as it is for the distributor. If manufacturers have those kinds of errors in the back-end system, regardless of where the distributor is getting the data from, it's going to cause 'kick-outs' on orders and other problems.
The hard thing is educating manufacturers' senior management that this is not an IT exercise, and that this is a productivity-gain opportunity for them. We try to convert it into something they will understand from a business perspective."
Rioux says that by year-end he would like to have 300 manufacturers providing certified data to distributors through IDW2. He also wants at least 150 distributors using the IDW2.
The cost to distributors to use the IDW2 is on a sliding scale that depends on company size. Exact pricing details are beyond the scope of this article but can be found on IDEA's Web site. However, there's no significant price increase with IDW2, and Rioux doesn't expect the cost to join IDEA or to use the IDW2 to be game breakers.
A bigger challenge for IDEA has always been to get distributor management to realize the importance of error-free product data that's 100 percent synchronized with their manufacturers' product data, and to understand the cost savings that clean data can provide.
"This is a pretty expensive change we are making, but it's going to provide tremendous value for anybody that wants to use it," he says.