EDI: a boon for retailers and wholesalers

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Wthout EDI

customer service and costs that hold the line. Interchange, which can whittle a retailer's ordering process down to a few simple procedures, is not in wider use.

Only large retail operations are currently using EDI to send purchase orders to wholesalers and receive invoices from their primary wholesale suppliers, enwre although the system can help a retailer to improve inventory management and eliminate unnecessary paperwork

Story at a Glance

Ways retallers and wholesalers can benefit from Electonic Data Interchange ... better inventory management, improved cash management, elimination of paPerwork and redundant data entry. and redundant data entry. However, as a study of the flow charts accompanying this article will show, the system could work for most retailen.

While the retailerbenefits the most from EDI, the wholesaler also gains. In the long run, the wholesaler re$rns these gains to the retailer with befier

"An order that took two hours for us to process now takes 10 minutes," says Alan Kirk, OrePac Building Products, Wilsonville, Or. He feels the faster order entry and proces sing help to reduce the overall cost of servicing a large account.

"We had to implement EDI for one customer, but we'd like to do it for more," says Don Klein,

Grand Rapids Sash and Door, Grand Rapids, Mi. His company's direct, per transaction costs of EDI versus forms, postage and handling are a wash. "Basically we break even on EDI," he observes. The cost of EDI is no more than the cost of paper billing, so the benefits of reduced data entry and customer service are a bonus.

In addition to reducing inventory and cutting overhead by shortening the delivery cycle, EDI can benefit a retailer's cash management by eliminating paperwork. Retailers receive invoices directly into their computers, remit via wire transfer and send remittance reports back for cash posting. The wholesaler also benefits with no invoices to handle and no check to get "lost in the rnil."

Despite the advantages, a retailer who wants to transact with its vendors via EDI may need to force the supplier to provide it. One Southeast distributor says, "We'll go to EDI when the retailers we sell require iL"

Transmits lnvoice and Receives Remllance Advice.