August 14, 2013

Collaborative Standards-Based Solutions Build a Strong Foundation for Growth

Summary:

IDEAL and Kirby Risk both credit IDEA’s Standards Adoption as a top reason why they are able to work together efficiently. In their world, a mutually beneficial relationship must include the ability to consistently communicate with ease and without error. IDEA’s standards-based, business-to-business (B2B) eCommerce solutions have helped them build a strong foundation to optimize performance, increase electronic activity and automate more of their business processes.

Background:

IDEAL (www.idealindustries.com) is one of the world’s leading manufacturers of professional quality tools and supplies, serving installation professionals in the construction, maintenance, data communications and original equipment manufacturing industries. Kirby Risk Electrical Supply (www.kirbyrisk.com), a distributor of high-quality, state-of-the-art electrical, automation, lighting and power distribution solutions, has sold IDEAL products across Indiana, Illinois and Ohio for more than 60 years. IDEAL and Kirby Risk utilize products and services within all of IDEA’s solution categories which include Synchronization, eCommerce and Business-to-Business, Standards Adoption and Professional Services. 

Stacie Braffet, eCommerce Supervisor at IDEAL and Marilee Anderson, eCommerce Manager at Kirby Risk have both played an active role on the IDEA Industry Standards Committee (ISC) for many years. The ISC develops standards and guidelines for the electrical industry including Data Content, EDI, EDIFACT, XML and most recently the Electrical Attribute Schema.

Challenge:

Manufacturers and distributors must collectively agree on a standardized platform to communicate and conduct B2B eCommerce. Without synchronized communication, timely and expensive errors can occur, orders for obsolete products might be placed, pricing information might be incorrect and time can be wasted tracking down the source of incorrect information. 

IDEAL found that other available solution and service providers weren’t asking for input on both the demand (distributors) and supply side (manufacturers) before implementing and/or changing their solutions. These providers were performing quick fixes to satisfy one side of the supply chain without consulting the other. Furthermore, their solutions were not based on globally-accepted standards which caused significant roadblocks in the long-term. 

“One of our biggest pain points when working with other service providers was their lack of collaboration and communication with manufacturers and distributors. Their technology was built on data that was not globally-accepted and we were forced to comply. The team effort just wasn’t there,” said Stacie Braffet, eCommerce Supervisor, IDEAL. 

A common focus for IDEAL and Kirby Risk, throughout the last year especially, is on cost savings. They want to work efficiently, but more importantly, they need to save money. They need to cut costs internally to increase their profit margin. Without a common platform from which to conduct B2B eCommerce, it’s challenging to achieve this goal. 

The use of non-standardized data can lead to costly mistakes and slow transaction time. “Before IDEA, we couldn’t guarantee our product information in real-time to ensure our trading partners like Kirby Risk were using the most up-to-date and accurate information to place orders,” Braffet added.

Solution:

To cut costs, distributors and manufacturers must streamline processes, centralize information and standardize data. The IDEA Industry Standards Committee (ISC) brings distributors and manufacturers together to listen to the needs of both and create standardized solutions and services that are mutually beneficial. For Kirby Risk and IDEAL, the ISC has played a vital role in improving their collaborative working relationship. The standards and processes that result from committee participation provide a strong platform from which they can work to cut costs. 

“The ISC provides an environment to bring manufacturers, distributors and service providers together to reach a consensus on collaborative solutions that benefit everyone. This makes IDEA’s solutions stand out from the rest,” said Braffet. 

Braffet noted IDEA’s efforts on the United Nations Standard Products and Services Codes (UNSPSC) and the attribute schema as examples of collaborative solutions that position distributors and manufacturers for success. 

“We are now coming together as an industry with UNSPSC codes; a single way of categorizing products. This makes a huge difference in the way we distribute and consume product information. UNSPSC code adoption, used in correlation with the schema, allows us to communicate descriptive information in the same language. This is a significant time-saver for all of us conducting eCommerce in the electrical industry,” said Braffet. 

Kirby Risk uses IDEA’s Synchronization solution, Industry Data Warehouse (IDW); the B2B eCommerce solution, Industry Data Exchange (IDX); and takes advantage of multiple Professional services including the new Synchronization Audit. 

“For Kirby Risk, eCommerce is a high priority. We’re always looking for the best solutions out there and IDEA has risen to the top on many occasions,” said Anderson. “Through the implementation of IDEA’s B2B eCommerce and Synchronization solutions, Kirby Risk is seeing a reduction in error through a more streamlined process. We are definitely seeing more business efficiencies internally as well as in working with manufacturers like IDEAL.” 

IDEAL synchronizes product data with demand partners using IDW and IRD CERICOMX®, participates in the Data Audit and Certification (DAC) program to ensure their product information in IDW is accurate and recently signed up for the UNSPSC Assistance Program, a new Professional service for manufacturers. 

IDEAL values IDEA as a business partner and said that implementation has always been seamless. “IDEA is a great company to work with and their support has been phenomenal. I was impressed with the team that implemented our conversion to IDEA solutions. The process was laid out step-by-step for us so that we would know what to expect throughout the process,” said Braffet. 

IDEAL also takes advantage of Industry Data Exchange (IDX) to exchange documents electronically and to automate the synchronization process in IDW via electronic data interchange (EDI). They utilize the EDI 832 Price/Sales Catalog document to automate updates to their product information in IDW. 

For IDEAL, integrating the IDW Data Synchronization Platform and IDX is a great time-saver. “IDEA’s Data Synchronization Platform updates distributor systems with changes to our product and pricing information in near real-time thanks to flexible integration features and standardized formats – much faster than other solution providers. Only IDW gives us the ability to synchronize product, pricing, packaging and marketing information in one location. By having both manufacturers and distributors on the same standardized platform, costs are cut out of the supply chain,” said Braffet. 

Just knowing that their trading partners are using IDEA’s solutions gives Kirby Risk a sense of security and confidence. “Having suppliers like IDEAL that use the same solutions and standards-based methods increase the credibility of the data. It is reassuring to know we are working with the same solutions and speaking the same language to increase supply chain efficiencies. We are all aware of standards adoption and its benefits which makes implementation much easier,” said Anderson. 

Both IDEAL and Kirby Risk added that IDEA’s championing of standards is the fuel that drives efficiency. “IDEA was the first to bring manufacturers and distributors together to make collective decisions. Both parties are literally in same room voicing hardships and pain points and coming up with solutions together. It’s a very collaborative environment and any manufacturer or distributor that is not participating in the conversation is really missing out,” said Braffet.

Results:

Kirby Risk and IDEAL continue to realize the benefits of participating in the ISC and utilizing multiple standards-based solutions and services. They are now better positioned to optimize their working relationships with existing and future trading partners. The time that may have previously been spent on trouble shooting errors can now be spent on increasing B2B eCommerce activity and profit through additional automated processes. 

“The standardization of data and documents, made possible with the assistance of IDEA, aids in reduction of errors thus lowering the cost of the business transaction. This also helps improve the invoice-to-payment time cycle,” said Anderson. 

It’s standardization that facilitates the setup of additional electronic document types. Kirby Risk has experienced growth from implementing EDI solutions with additional businesses and utilizing additional electronic documents with existing partners. “The IDX Tracker has been an excellent tool for analyzing our EDI usage,” Anderson added. 

IDEAL depends on IDEA for more than just B2B eCommerce solutions. They take advantage of the educational and training resources available in IDEA’s eNewsletter, This Week in IDEA, and the IDEA Portal

“IDEA not only provides top-notch solutions, they have the resources and services needed to help me continually improve performance. They take training seriously and provide online resources that help me develop business cases for senior management,” said Braffet. 

Kirby Risk and IDEAL discussed how IDEA’s solutions and standards adoption helped them to take the next steps to automate inventory processes using Vendor Managed Inventory (VMI) from Datalliance (www.datalliance.com). VMI enables IDEAL to receive daily updates of stock levels from Kirby Risk and determine when an order needs to be replenished so that quality service levels can be maintained. 

“Kirby Risk is extremely selective about which suppliers we work with to automate inventory management via VMI. It’s no surprise to me that the majority of those suppliers are IDEA customers like IDEAL. We’ve invested time in enhancing our electronic business relationship which builds trust. IDEA’s solutions give us the capability to automate even more supply chain processes and add onto our joint cost savings,” said Anderson. 

Braffet agreed and expanded on how the IDW Data Synchronization Platform provided Datalliance with a strong infrastructure to implement VMI. “Our VMI relationship with Kirby Risk takes EDI a step further. Our third party VMI vendor, Datalliance, retrieves our product and pricing data from IDW, which is a huge time-saver for us. The integration of IDEA solutions and our VMI strategy help eliminate the main challenges of order management – distributors ordering wrong quantities or obsolete products due to inaccurate information,” said Braffet.

“IDEA gets it. They are part of the electrical industry so they understand the concerns and are able to analyze our data to come up with ways to optimize our performance,” Braffet added. 

 

You can read more about Kirby Risk’s experience implementing VMI from TED Magazine.

Download PDF version here