August 29, 2007

Distribution’s Competitive Edge

Standardized, timely, and accurate information drives supply chain efficiency. When IDEA was founded in March 1998 as a joint venture of NAED and the National Electrical Manufacturers Association (NEMA), the founders’ vision was to provide a central repository for delivering standardized product and pricing information throughout the electrical industry to reduce costs for all parties involved.

The IDEA Standards Committee (see the side bar on the opposite page) was established to help make this vision a reality by developing data-formatting standards. The volunteers on the committee devote countless hours to developing electrical industry specific versions of open and public nonproprietary international and industry group standards, including the American National Standards Institute (ANSI) ASC X12, GS1, and the United Nations Standard Products and Services Code (UNSPSC).

Data-formatting standards in EDI and flat file formats are available for the EDI 850: purchase order, EDI 810: invoice, EDI 844: product transfer account adjustment (also known as a SPA credit

request), EDI 849: product transfer account adjustment response, (also known as SPA credit/discrepancy), and EDI 845: price authorization acknowledgement/status (used for SPA quotations and pricing). It’s time to put these to use across the industry.

Industry data-formatting standards reduce friction and gridlock within the supply chain—so that products can be delivered more efficiently, operations costs reduced, trading partner relationships improved, and internal business processes enhanced. They also enable manufacturers to prepare and communicate information in one format on a real-time basis when new products are added and product information is changed or updated.

In addition, data-formatting standards allow distributors to automatically download information from all manufacturers in one format in a real-time basis so business systems always contain the most up-to-date information. And once their systems

are up dated and the data synchronized, distributors can rely on their business systems for accurate price and product information, rather than calling manufacturers for up-to-date pricing every time a customer requests a quotation, providing better customer service.

Trading partners that adopt and use IDEA’s data-formatting standards have a competitive advantage over those who do not. Membership on the IDEA Standards Committee is not required to take advantage of the standards that the committee develops—but commitment to supply chain efficiency is.

TED Magazine April 2007

By Ann Adams