Cleveland — Will MRO distributors and manufacturers ever agree on transaction standards to conduct business electronically?

That was the key question raised at a conference on e-commerce collaboration hosted by the Industrial Supply Manufacturers Assn. Aug. 20-21. About 50 participants, including several distributors, manufacturers, technology providers and academics, debated the pros and cons of e-business standards at Case Western Reserve University.

Members of ISMA, the Industrial Distribution Assn., and other distributor groups like the Safety Equipment Distributors Assn. were urged to look at what the electrical industry has done as a model. Electrical distributors and suppliers created an electronic repository for product information called the Industry Data Exchange Assn., which was hailed as a success. SEDA and its manufacturer partners are also working on common data formats for transactions.

Participants largely agreed that manufacturers and distributors would benefit from adopting industry standards for electronic transactions.

The benefits include improved production forecasting, lower inventories and lower transaction costs. That involves consistent product coding and marking, eliminating special ticketing, more accurate and timely re-orders from customers, better capture of sales and inventory data, and the opportunity to track products and collaborate with channel partners, experts said.

But it remains to be seen how soon players on both sides will commit to creating standards, and how industry leaders will attempt to convince small distributors and suppliers to support the effort. Some participants urged flexibility to allow transactions to be done in numerous formats, including electronic data interchange, eXtensible Markup Language, or sending spreadsheets and flat files using Internet connections.

"There seems to be an opportunity now and the timing is right,'' said Gary Buffington, I.D.A.'s executive vice president. I.D.A. and ISMA board members were expected to consider what to do next at a September meeting.

Tom Berger, president of Fuchs Machinery, Inc., Omaha, Neb., and an I.D.A. board member, said it shouldn't be too hard to convince distributors why they should adopt standards. His company has had success rationalizing part numbers with its suppliers, using Prophet 21's Trading Partner Connect network, which he said has resulted in few errors, for example.

Another I.D.A. board member, Gary Mull, president of Cunningham Supply Co., Akron, Ohio, cautioned that time and resources are big obstacles for small distributorships like his.

''I'd be happy to rationalize everything we have to be in line with manufacturers, but it has to be in line cost- and resource-wise,'' he said.

Cutting tool manufacturer Carboloy, Inc. is one supplier that is seeing gains from electronic order entry and other transactions online.

Paul Kieta, manager of distribution and business development, said last year one third of the company's orders came through EDI. Carboloy expects that to grow to about 50 percent during the next year via both EDI and by using Prophet 21's trading network.

''We've already focused on inventory,'' Kieta said. ''We wanted to lower it. We want [Carboloy's] distributors to identify dead stock ... the focus is on end-user customer service and the technology is just the vehicle to get there.''

Kieta also said Carboloy will soon use Web-based applications to cut more costs. Those include online tracking of orders and shipments, automated returned materials processing, dead stock exchange and moving distributors' point-of-sale reporting to an electronic format.

Some participants questioned whether small distributors and manufacturers would follow if large national players attempt to create standards, or data formats, for business transactions. W.W. Grainger and MSC Industrial Direct were represented at the conference. Lee Eagan, president of Oliver Van Horn Co., New Orleans, La., said small distributors will turn away if it appears large players are dictating the standards to them.