But it wasn't long before Wal-Mart started asking for more. "It can be tough with that company breathing down your neck," says Willman. This time Wal-Mart was pushing Cedar Works to send invoices electronically and to use Wal-Mart's proprietary point-of-purchase information and communications software, called Retail Link. For $5,000, Cedar Works bought the software and an NCR 486-DX computer, which Wal-Mart insisted be purchased through it to standardize technical support.
Now Cedar Works runs a UNIX-based serial network that integrates its Macs, PCs, and workstations to support some 25 nodes. The company uses Retail Link to communicate with Wal-Mart's buyers and to access information such as inventory forecasts, allowing Cedar Works to create tighter production schedules. Recently, the company upgraded both its accounting package and EDI software to sophisticated UNIX-based programs that can be networked and integrated. In the near future, when a purchase order is downloaded, the computers at Cedar Works will automatically transfer the order from the EDI software to the company's accounting software, which will then generate an invoice and return it electronically to the customer. Cedar Works also expects to join the ranks of those Wal-Mart suppliers who are so tightly wired to the retailer that they don't wait for purchase orders to come in -- they write their own on Wal-Mart's behalf based on anticipated demand at the stores.
Taking the Offensive
Some growing companies are so enthusiastic about EDI that they're not waiting for customers to ask them to go on-line. Instead, they're actively seeking the opportunity. CRC Products Inc., a 60-year-old, $6-million food-service equipment and supply distributor, in Terre Haute, Ind., decided three years ago it could improve its financial performance if it could forge electronic links with some of its larger customers. As it turned out, only one customer was amenable. Fortunately, it was a big one: the U.S. government. A number of U.S. government agencies have been using EDI for as many as 10 years, and the government hopes that eventually all federal agencies will make purchases through the governmentwide Federal Acquisition Network.
When government agencies or military bases need to procure goods, they often submit requests in writing to the General Services Administration (GSA), which posts the bids in newspapers such as the Commerce Business Daily. CRC looks to the paper for opportunities and also solicits the GSA directly, constantly updating the agency on CRC's offerings. In the past when the government needed 5,000 serving spoons, CRC would draw up a bid and either fax or mail it to the GSA. The agency would review the bid and then return a purchase order. The process could take as long as a week.
However, using a 486 computer and a modem over a private network connection from Harbinger Corp., based in Atlanta, CRC now has access to government "electronic bid boards." Although the GSA still requires signatures, many government agencies post requests for goods electronically. Every day, CRC downloads the government's requests from its "mailbox" at Harbinger.
To make the process more efficient, CRC electronically filed a registration form with the government, marking off the categories of supplies the company offers. Each category corresponds to a different national stock number, which Harbinger's computers can use to sort incoming government bids and filter the pertinent ones to CRC's mailbox.
Not only is CRC privy to more bids, but the company can secure contracts faster, giving it more time to fill orders. Vice-president Scott Rohleder uses the extra time to combine orders and to buy stock at a lower cost as well as to save on the cost of freight. In addition, Rohleder sends his invoices electronically to the GSA, shaving four or five days off his pay cycle. "We are ready and waiting for other partners to come along and trade with us electronically," says Rohleder.
Beyond EDI
Some growing companies are expanding the form of their data sharing with large customers. Ironically, that often requires less technical know-how than standard EDI. That's because instead of having to set up a system that's compatible with their partner's, they access the partner's system directly and use it as if they were an employee of the partner.
G&F Industries Inc., a $20-million maker of plastic molding, in Sturbridge, Mass., got the idea for deep data sharing from its largest customer. Four years ago, Bose Corp., headquartered in Framingham, Mass., asked G&F to put one of its employees on site full-time at the Bose plant in Westborough, Mass., as part of a just-in-time manufacturing-resource-planning approach known as JIT-II.
At the time, the notion of an on-site supplier was considered radical, but since then, G&F planner John J. Argitis has spent part of almost every day at Bose. As an on-site supplier, he has access to all the information available to any of the Bose buyers, and he has the authority to place purchase orders with G&F on Bose's behalf. Argitis begins every Monday by logging onto Bose's internal network and calling up a materials, requirements, and planning report for the Westborough plant. The report predicts Bose's inventory needs for six weeks. G&F uses the reports to plan its production schedule and to ship product that goes straight into Bose's production process, eliminating Bose's need to inventory G&F products.
