IT choices and challenges

By Staff -- Industrial Distribution, 5/1/2000

Steve Bouza is an IT consultant specializing in wholesale distribution industries. Formerly vice president of information technology at the National Assn. of Electrical Distributors, he has worked with many associations in the commercial/industrial sector and the Uniform Code Council on creating guidelines and standards for bar coding, product identification and EDI. In the electrical industry, he worked on the design and marketing of the first CD-ROM product catalog, the creation of a standardized product descriptor database, and the Industry Data Warehouse.

Bouza offers the following insights on the critical IT issues facing players in the industrial distribution marketplace today:

The Internet. "The movement taking place here is from a mere Web 'presence'-that is, a repository with a slick graphic interface, containing a company profile and product sales information-to a Web site that is a functioning business-to-business product," says Bouza. "Not only will the Web site offer technical documentation, drawings and sales literature, it will also become the front end to the company's database, allowing the customer to search a catalogue, place an order, check stock and order status, and pricing, while building an online customer profile for the distributor.

"There is some fear on the part of distributors that supplier B2B technology will eventually be made available to end-users, by-passing the distributor. My advice here is that distributors should develop their own B2B Web sites set up for e-commerce so that customers can go to the distributor's page as opposed to going to the manufacturer's."

EDI. "Expect a continued growth in EDI traffic supported by an ever-increasing array of transaction sets to automate many of the traditional paper processes. However, the industry must work toward getting their EDI software off stand-alone PCs and mapped and integrated into their databases," says Bouza. "There are significant costs-many of them hidden-attached to doing EDI in this manner. There is also a significant change in the way EDI data is being communicated.

"The Internet is becoming the highway for moving the data-in effect eliminating a good deal of the value-added network charges. Also, look for the encryption technology available to provide secure transactions, as well as digital signatures. And watch for the growth of extranets, or private Internets, to alleviate current concerns over the Internet's speed and security."

Standardized product identification and bar coding. "Comparing the rapid implementation of standard product identification and bar coding in the retail sector with the glacial creep of their implementation in the commercial/industrial sector, it is evident that much still needs to be done to realize the benefits offered by these technologies," Bouza notes. "But the persisting impediments to progress that need to be addressed are: the lack of standardized product identification and bar code symbology, inaccurate packaging indicators, missing bar codes, and poor bar code quality."

Vendor Managed Inventory systems. "The growth of this technological discipline has been hampered by a shortage of technology use. VMI cannot function effectively with companies that are not using product I.D., bar coding, and EDI," says Bouza. "Point-of-sale systems, so prevalent in the retail sector, are only slowly gaining a toehold in the commercial/industrial sector-but generally at the customer-distributor level, not at the supplier-distributor level.

"In today's marketplace, if distributors have no problem getting customer information, but they are reluctant to share this with manufacturers, then they have to decide whether they are interested in partnering or not, and what the nature of their relationships is with their suppliers. With VMI and POS, the issue is probably not so much a technological one as one involving loyalty and trust."