The Industry Data Warehouse is underway, and distribution software vendors are queuing up to put their systems through their final paces.
The Industry Data Exchange Association is out to show the industry that pipe dreams can come true. After two years of sweat and hard labor from some dedicated people, and some clever navigation through the backwaters of the electrical industry's timeless political swamps, the IDEA is bringing its first brainchild, the industry data warehouse (IDW), into the mainstream of electrical life.
The deadlines have moved back a bit, but the pieces are coming together. Final preparations to make standardized product and pricing data available to distributors through the IDW are nearing their end. As this issue goes to press, the IDEA is committed to having its systems ready for public consumption by Sept. 7, when the association's proprietary extranet, IDXchange, will become available.
For the majority of distributors that run their businesses on packaged software, the IDW won't really be of much use until their system providers are ready to offer IDW data-handling capabilities. Fortunately, most of the major distribution software vendors in the electrical industry are well along the development path. Most will be testing their systems with beta-site distributors over the next few months and expect to offer upgrades and new releases incorporating IDW capabilities by the end of the year.
The IDW system itself has been up and running at the offices of Triad Systems Corp. in Livermore, Calif., since July 6, with about 25 manufacturers and a comparable number of distributors already sending and receiving product and pricing data. Initial transmissions are being done via file-transfer protocol (FTP) over dial-up connections or through value-added network providers (VANs) while MCI WorldCom puts the finishing touches on the IDXchange.
Trade Service Corp. has delivered its entire price-file maintenance service (PFMS) database of electrical industry product data to IDEA, a total of more the 800,000 discrete SKUs that will form the initial mass of formatted product data for the IDW, says Andy Dobbs, director of implementation services for Triad Systems.
San Diego, Calif.-based Trade Service has a contract with IDEA to provide various services, including supplying the initial mass of formatted product data for the IDW. Initially Trade Service will supply all its data to the IDW and will update it weekly at no charge to either manufacturers or distributors until the end of April 2000. After that date, Trade Service will update the IDW product files for those IDEA member manufacturers that contract with Trade Service to do so and pay a fee for the update service.
The original idea behind building the IDW was to synchronize data throughout the supply chain, with manufacturers updating their own data files directly so those data would pass through the fewest possible hands moving from manufacturer to distributor. This direct upload is still the goal and will be the norm among IDEA member manufacturers, but Trade Service will provide its service for manufacturers that choose otherwise, says Malcolm O'Hagan, president of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., and a member of the IDEA board of directors.
Operationally, the top priority now is to help the providers of distributor business software packages get their systems IDW-compliant and ready for release as soon as possible, says Dave Crum, chairman of IDEA and president of Crum Electric Supply, Casper, Wyo. Those providers represent the largest critical mass of distributors necessary to carry the IDW project forward. The primary providers in the industry are making good progress in getting their systems ready to integrate IDW data, Dobbs says.
According to Dobbs of Triad, Eclipse, Inc., Shelton, Conn., and NxTrend Technologies, Colorado Springs, Colo., were expecting to test their first distributor installations of IDW-compliant software by the end of August. Plus Systems, Inc., London, England; Prophet 21, Yardley, Pa.; Tecsys, Dorval, Quebec; Trade Service Systems, Blue Bell, Pa.; and Ustaad Systems, Harrisburg, Pa., will test their initial installations this month. Capp Associates also will have its system ready to test in September, but doesn't yet have an installed user ready for the test, Dobbs says. Mincron Software Systems, Houston, Texas; Distribution Resources Co., Englewood, Colo.; and Systems Design, Inc., South Holland, Ill., have begun work but are still in the earlier stages of developing IDW-compliant software.
Once the first systems are installed it will be "a fairly straightforward process to roll these releases out to their other distributors," Dobbs says. "The first one is always the hard one."
While they've taken different tacks to get there, most have ended up with similar solutions to the problem of integrating the IDW data into systems that have never used it before. The idea is to download all the IDW data the distributor is authorized to receive--what some call the "million-product load"--into a separate server where it will become a local data wareh ouse of nonstock items. Only items carried in inventory will be loaded into the distributor's business system to keep it cleaner and easier to search than hunting through all electrical product data in the industry. Many of the system providers have licensed the add-on server systems from Triad Systems.
Some providers have taken their own tack. Eclipse, which is furthest down the development road, according to IDEA, has integrated the local warehouse of all IDW data into its main system, where it's browsable by users, says Scott Raderstorf, Eclipse's V.P. of product development . He says the total data file, if efficiently stored, takes up less than 100MB of space.
The process of integrating IDW data into the business system revealed that the Trade Service price file data format was far more deeply imbedded in the systems than anyone realized, Dobbs says. "It will probably take two or three releases before they're all cleaned up and converted to the more flexible IDW data format," he says.
IDEA will certify systems as IDW-compliant, but the processes for that testing aren't developed yet. Until then, Triad Systems is testing the systems with the IDW itself to make sure they comply, Dobbs says.
Distributors with proprietary software systems vary in their preparation for use of the IDW, Dobbs says. Cameron & Barkley Co., Charleston, S.C., has been up on the IDW since July 1. Graybar Electric Co., St. Louis, Mo.; Steiner Electric Co., Elk Grove Village, Ill.; Mayer Electric Supply, Birmingham, Ala.; and Edson Electric Supply, Phoenix, Ariz.; have all begun testing communications with the IDW. WESCO Distribution, Pittsburgh, Pa., is still in the development stage. While these distributors with proprietary systems include some of the industry's largest, Dobbs says getting the software package vendors ready is the highest priority because they represent the largest portion of the distributor base.
The work that these software vendors are doing with electrical distributors may just be the tip of the iceberg. Prophet 21 reports that its users in the industrial and MRO fields are interested in implementing an IDW-like system in their industries, too.
IDEA may be an exceptional case of the fractious electrical industry interests working together on a common goal, but it's by no means above the political realm. In fact, some believe the association is poised to sink back into the established regime. The IDEA board of directors is considering a proposal to move the IDEA back under the umbrellas of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., and the National Association of Electrical Distributors (NAED), St. Louis, Mo. The move is necessary, says NEMA President Malcolm O'Hagan, because it's the simplest solution to questions over IDEA's tax-exempt status.
A recent review by the association's counsel has thrown IDEA's status as a nonprofit entity under section 501(c)(3) of the Internal Revenue Code into question. "Early information is that because of the nature of the activity of IDEA, it may need to be a taxable entity rather than a nontaxable entity," says Dave Crum, chairman of IDEA. "I'm not an expert on the definition of a 501(c)(3), tax-exempt company, but I think it's the commercial nature of what we do."
The IDEA board of directors is considering making the association a wholly owned subsidiary jointly owned by NEMA and the NAED. "They've told me there are really no strongly negative implications for IDEA," he says. "Our expenses have outstripped our revenues, and our projected expenses will outstrip our revenues for a time, so we really don't have a problem at this point. There won't be any profits for awhile."
IDEA budgeted all along for its initial expenses to come out of a capital fund made up of membership dues from manufacturer and distributor members, Crum added. Revenues from ongoing fees for the operation of the IDW and the IDXchange extranet now under development were not expected to fund operations for some time to come. Further information on the association's tax-exempt status was not available.
The association was originally set up as a separate entity to make sure both manufacturers and distributors would have equal say in its activities. O'Hagan believes making it a 50/50 joint subsidiary of NAED and NEMA will preserve the balance of power. It will still be run as a not-for-profit entity with the same board of directors and committee structure it has as a stand-alone association, he said. The ownership arrangement will not increase NEMA and NAED's liability exposure, O'Hagan said.
Electrical Online hopes to make EDI available to smaller distributors.
Since the beginning, the industry's technology thought leaders urged distributors to prepare for electronic transactions, or electronic data interchange (EDI), which must, they said, be the way of the future. Finally, the industry seems to be positioning itself to make electronic transactions the norm rather than the exception.
One driving factor is the Industry Data Exchange Association's (IDEA) development of the Industry Data Warehouse (IDW) and the IDXchange extranet. Another is the falling cost and spreading availability of electronic commerce systems and services.
One service aspiring to bring electronic transactions to those thousands of smaller electrical distributors who had considered EDI too costly is Electrical Online (EO) from Unilink Group, Atlanta, Ga. Electrical Online was developed as a way for distributors and manufacturers to capture the benefits of EDI with minimum investment. The hookup of a distributor costs a manufacturer $500 to $750.
The system is able to process purchase orders and acknowledgements, advance-ship notices, invoices, cash remittance advices, inventory activity data and warranty and returned goods correspondence with a package that is cost-free to the distributor. Distributor personnel don't even have to learn anything about how EDI works with Electrical Online. According to Unilink, EO translates the distributor's output automatically into any format required for the manufacturer's system.
The company has made a splash in the electrical industry with the help of Bob Snyder, president of Equity Electrical Associates, Boston, Mass., and former executive vice president of Carol Cable.
Snyder wanted an independent evaluation of EO's claims. One of the first people he turned to was Ben Lazar, then director of electronic commerce for Hubbell, Inc., Orange, Conn. Lazar was impressed enough with the Electrical Online business model that he left Hubbell to become chief technology officer of Unilink Group.
"I saw when I was at Hubbell that not nearly half of distributors use EDI," Lazar says. "What they're looking for is quick implementation. In traditional EDI, each relationship requires work to map the data from one system to the other. Electrical Online requires no implementation on the part of the distributor, which makes EDI available to the smallest end of the supply chain."
The biggest obstacle to EDI has been the integration of the distributor and manufacturer information systems, an obstacle for which there still is no generic solution, says Lazar. Electrical Online's solution is to place a personal computer it calls a "Powerlink PC" at the distributor's facility to act as a silent node on the distributor's network.
The distributor doesn't have to buy any software or hardware, and he pays no transaction charges. With one connection to Electrical Online, a distributor can transact EDI business with any of its manufacturers affiliated with the service. Electrical Online's simple system may even help the industry adjust to the IDW.