July 3, 2006

An IDEA whose time has come: industry leaders strongly urge data wharehouse participation

Experts agree that business efficiency and a lean supply chain are key ingredients to increased profitability. When these attributes are combined with speed and convenience, the entire channel reaps the benefits. The value proposition offered by the Industry Data Exchange Association (IDEA) includes improved data synchronization, enhanced data supply, and a lower-cost means to communicate that data electronically.

IDEA’s Industry Data Warehouse (IDW2) provides manufacturers the most efficient means to deliver one version of the truth-a place and process for accurate, timely, and current business data that meets the needs of distributor trading partners through one central repository. The self-service model allows updates by both the supplier and distributor to be performed as needed, while also providing suppliers the option to review and update their data online.

Graybar President and Chief Executive Officer Robert Reynolds, Jr. and NEMA Chairman Tim Powers of Hubbell Incorporated recently sat down to share their thoughts with electro industry.

ei: Why is the Industry Data Warehouse (IDW2) so important to Graybar’s business?

Robert Reynolds: If Graybar and the entire distribution channel are to drive up sales and efficiency while driving down supply chain costs, it is imperative that every one of our mutual suppliers participates in the Industry Data Warehouse program. IDW2 is the fastest and most cost effective way to deliver the specific product and pricing information distributors need to sell more of our manufacturers’ products.

ei: That makes sense. Tim, what would you tell the industry about the IDW2?

Tim Powers: Both manufacturers and distributors are responsible for driving the adoption and use of the IDW2 solution. Manufacturers will not do the work if their distributors are not pulling the data out and vice versa. Distributors will not participate unless manufacturers provide information. This model also facilitates speed-to-market gains, because data needed to load in operating systems prior to new product purchases can pass seamlessly from supplier to channel partner.

ei: It appears to be a pragmatic solutionfor the industry. Does it give the data an immediacy heretofore impossible?

RR: Distributors need immediate access to manufacturers’ data, especially when there is a price increase or the products change. Considering the volatility of raw material prices and rising transportation costs, we cannot wait for a CD in the mail or a weekly update service. Price and product changes are dynamic and the best way to save money and plan ahead is to have access to the data as soon as it’s available on a 24×7 basis.

ei: Is there anything else Graybar needs to continue benefiting from this service?

RR: Greater benefits and increased sales can easily be achieved if our suppliers would provide complete product information, attributes, and images. These are critical for all phases of sales and marketing. Graybar and its customers need long descriptions and searchable attributes in the IDW2. If these additional data files were provided, our customers could make better business decisions, making it easier for our company to sell more products.

ei: Tim, as a manufacturer, what do you suggest the industry do to get more out of the IDW2?

TP: I certainly agree with Bob. Enriched data is a major necessity for distributors. Top management needs to make this a business priority and reflect that need throughout their sales and marketing teams. Most manufacturers already have this information in their possession; it’s just a matter of giving it higher priority to supply it to the IDW2. However, distributors need to request, request, and request some more. They need to stress how important this information is to their sales efforts and bottom line results.

ei: Bob, it is evident this is an important tool for the industry. What would you say to a manufacturer that is not sending data to the IDW2?

RR: Manufacturers that do not participate in IDW2 are less efficient and are costing both themselves and their distributor-trading partners money. The manufacturer/distributor business channel would be greatly improved if we could take a daily download of certified business information right into our business system without having to make corrections or process it manually-it makes perfect business sense.

ei: Tim?

TP: The key is to think about all the efficiency and profitability that the channel is missing out on. The recent industry focus on supplier report cards underscores the need to eliminate inefficiencies. I suspect that review of the quality of a supplier’s data, determining how accurate and often it is updated, will become a benchmark for the future. But distributors need to use the information from IDW2 and not rely on inefficient usage of CDs, disks, and faxes provided by others and manually keyed into their systems.

ei: IDEA recently received "Excellent" ratings on IDW2 security. Shouldn’t this make manufacturers more confident about supplying their Net-Price information now?

RR: Absolutely. Using IDW2 means being able to access our suppliers’ net cost information from one location; for Graybar, the IDW2 is a much more secure, efficient, and timely method. I don’t know of any distributor who wants to process e-mail files, CDs, or other methods that require manual processes to keep up with the thousands of special pricing arrangements for each of their suppliers. Receiving net cost data directly 24×7 can reduce Graybar’s invoice and purchase order discrepancies from 15 percent to 3 percent just for one vendor.

 

ei: As a manufacturer, do you concur with the distributor position on this issue?

TP: For starters, IDEA did a great job of addressing their customer concerns about IDW2 security. Distributors thrive on net cost into stock information; therefore they should seriously consider leveraging the IDW2’s "Excellent" security audit rating to ensure that their manufacturers supply net pricing information to the IDW2. This rating should motivate more suppliers to populate IDW2 and begin experiencing the benefits of participating. With specific authorizations, only the specified location receives the data. So, yes, I agree with Bob, and reiterate that distributors need to communicate their preference to leverage IDW2 as a means to get this type of data.

ei: Bob and Tim, are there any closing comments about IDW2 participation that you would like the readers to take away?

RR: Besides providing the information we mentioned earlier, manufacturers need to address the quality of their business data and how significant it is to conducting error-free business. Suppliers have to accept the fact that they have the primary responsibility for data quality. Data is a business asset of equal importance to the product it represents. Graybar will sell more products and aggregate savings by improving inventory management, boosting productivity through automated interactions, and reducing revenue leakage through accurate data. With distributors and manufacturers standing side by side, this industry can continue its transformation to become the leader in real-time e-Commerce business practices.

TP: Think of your product information as a strategic asset. Treat it with the same care and maintenance you do the products it represents. Get your information technology, marketing/communications, and e-business staff focused on delivering this data to IDW2 on a regular basis and measure the results yourself. Use the IDW2 as the means to deliver your strategic asset to your trading partners in the most cost-effective way. Your distributors can read everything that is out there in the market place, but it makes more of an impression when it comes from you.