Making electronic business better

ISA's eBusiness Initiative goes live, and highlights guidelines for distributors and manufacturers wanting to bring some continuity to the supply chain

By Paula Giovannetti -- Industrial Distribution, 6/1/2006

The Industrial Supply Assn. has wrapped up its first version of the ISA eBusiness Implementation Guidelines. The document was created for ISA and its channel partners to support the business process of buying and selling industrial supplies.

The basic building blocks needed to conduct business in the open supply chain include unique identification for items, assets and locations, standardized electronic business transactions and bar codes.

The myriad of item and company cross-reference files that must be maintained in our systems today are no longer manageable. Providing industry guidelines for assigning unique identification numbers in standardized bar code symbologies means we can scan up to 3 million characters without an error, and optimize inventory tracking, shipping and receiving.

eB guidelines are critical today because we conduct business in a global and open supply chain. An open supply chain is a business environment where products, transactions and funds are exchanged among multiple and various trading partners and their attendant ancillary services such as transportation carriers, third party warehouses, Customs and Border Patrol, outside sourcing, etc.

When a product leaves the physical domain of the owner, it is best-business practice to assign unique trade item numbers, logistics serial numbers, ship-to location numbers, bill of lading numbers, etc. This facilitates tracking, tracing, inventory management, shipping, receiving, customer service and returns.

The ISA eB Guidelines recommend the use of the GS1 (formally EAN/UCC) system of Global Trade Item Numbers and Global Location Numbers.

As stated in the guidelines' introduction, "The ISA eBusiness Committee is sensitive to the fact that many trading partners have limited technology resources. The committee is also mindful that inefficiency and cost must be removed from the entire supply chain, not merely handed off to other parties. Methods of item identification and electronic business transactions must be as simple as possible, while still obtaining the objective of better, faster business processes."

The first version of the guidelines is designated as "Draft" and includes a simple, but formal, Change Request Process which will allow suppliers and distributors a vehicle for feedback as well as a mechanism for adding business functionality. It is important to set a democratic tone for the users, who must be an integral part of the guideline maintenance process as they test the principles in the guidelines with real-world implementations.

Let's start by making a distinction between eBusiness and electronic commerce. Electronic commerce originally was a blanket term used to describe business processes augmented by electronic tools, such as e-mail, Web portals, smart cards, Electronic Data Interchange (EDI), and, basically, anything accomplished with computer software. The term "EC" has now narrowed to denote selling products over the Internet. Terms such as eBusiness and business-to-business (B2B), describe the electronic exchange of business information between two trading partners.

The ISA guidelines do not cover selling trade items to business partners or end consumers via Internet web stores or e-catalogues. The guideline is focused on business-to-business technologies.

Another very important distinction is between standards and guidelines. We are familiar with ANSI (American National Standards Institute) and ISO (International Standards Organization): technical standards and specifications that affect, virtually, every area of our lives.

Guidelines, however, are just that. They are not fast and hard rules that must be followed exactly to the letter. Participation is voluntary. Above all, the purpose of our work is to enhance the ability of all industry members to compete more efficiently and effectively so they may provide better value to the customer. Individual companies remain free to make independent, competitive decisions.

Electronic Data Interchange is a mature and stable eBusiness tool. Tens of thousands of trading partners have created successful business applications exchanging documents in EDI. However, many think that EDI can be too expensive. This is due, in large part, to the creation of trading partner—specific and complex EDI maps.

The eB committee strives to design EDI maps that are simple and straight forward, yet robust enough to sufficiently conduct business in the MROP sector. They are adopted from ANSI X.12 EDI standards. This version of the ISA eB Guideline includes EDI maps for the 832 Price/Sales Catalog used to exchange trade item information; the 816 Organizational Relationship transaction used to convey company information; the 850 Purchase Order and the 855 PO Acknowledgement. The committee is currently working on the 810 Invoice and the 860 PO Change document.

The ISA eB Committee looks forward to your comments, suggestions and questions. More information on the ISA eB Implementation Guidelines can be found on their web site, at www.isapartners.com.