Technology Today (Guest): 7.27.2010

Posted by TED Magazine on Tuesday, July 27, 2010

Busting the Net Pricing Quandary, Part 3

A 3-part series on solutions, challenges, and the progress of automating net into stock pricing

by Sonia Coleman

As the electrical industry continues to automate, one of the most frequently discussed topics is developing more efficient processes for transmitting net into stock pricing. As discussed in Parts 1 and 2 of this article, the standards have been created, but implementation is still an issue for many companies. In this section of the article, we’ll hear feedback on how IDEA is helping distributors and manufacturers successfully automate their data.

Many companies consider automating the net into stock pricing data to be an industry issue. Since IDEA was created “by the industry, for the industry” to take costs out of the channel, the industry looks to IDEA for a solution.

An Individual Approach

IDEA president & CEO Bob Gaylord has been on 34 customer visits to listen and understand how to develop more effective solutions for each customer. What he found was that this issue has to be solved between individual companies.

“As the ‘industry,’ we can wring our hands about the problem of net into stock pricing from the global perspective. Generally speaking, you’re going to solve large industry problems by starting with a smaller reach and expanding it beyond that,” said Gaylord. “To solve this issue, we need individual leaders who are courageous enough to invest upfront today to make it happen. This battle will be won on the eaches: each company working this issue out individually.”

Gaylord responds that the National Association of Electrical Distributors (NAED) has contributed greatly by developing best practice documents on net into stock pricing. Now that best practices have been communicated, IDEA can facilitate solutions for individual trading partners.

“If it’s a communications business process issue, we can facilitate with a consulting synchronization program that will walk a distributor and a manufacturer—those two individual trading partners—through the process and help them translate this complexity into something simple enough that they can accomplish,” Gaylord said.

It can be centric with either a distributor or a manufacturer, he said, but once one of those makes the net into price connection with one of their trading partners, then it becomes easier to do with a second trading partner, a third partner and so on.

The consulting program, Synchronization Audit Service, initially focused on specific trading partner to trading partner interactions; however, it can also be applied across an entire community. This service, which can be combined with other IDEA professional services, is tailored to meet individual company’s needs. For example, a manufacturer can assess the needs of all its distributor trading partners to not only automate net into stock pricing data, but also to identify ways to make other business processes more efficient.

Customized Solutions

IDEA’s professional services won't take the ball out of that company’s court to get it accomplished, but will take away a lot of the stress that they have over limited resources, Gaylord said.

“These consulting services help them through the process, because on the surface it can look rather intimidating,” he said. “We can have people work with them and their individual trading partners to simplify the process as best it can be simplified and walk them through it.”

According to Nick Manzo, Director of Business Development and Integration, the synchronization audit service has been in a pilot phase in collaboration with Affiliated Distributors (A-D).

“With the participants that we've had in this pilot program, net price has been one of the more prevalent issues. What’s interesting is that when we’ve done a little bit of measurement on where they are and the opportunities available, it’s not as complex as perceived. It’s not that they don’t have the ability to do it, but rather it’s not part of their core competency. We know of technologies and processes that could assist them and that are that are proven and tested in this environment,” said Manzo.

Chris Carter, Director of Marketing Services for North Coast Electric, shared his company’s experience with IDEA’s synchronization audit service as a pilot participant.

“IDEA conducted a thorough analysis of our data foundation. They listened attentively to our biggest concerns to help prioritize our top three goals and provided multiple recommendations to ensure success,” Carter said. “Price and data synchronization with our trading partners is essential to reduce transaction cost, and I believe future data match and sync audits will be important to accomplishing our goals.”

IDEA’s professional services will continue to be expanded this year. The services can be tailored to the needs of each trading partner, whether that be trading partner to trading partner, across communities, or specific data and transactional issues.

Looking Ahead

It has been a long journey, but progress toward a more efficient channel continues.

 “We’ve got to keep pushing to move this forward: to get software vendors to implement the standards and for companies to make it a priority and put resources in place,” said Ron Schlader, IDEA Chairman and Vice President of Operations & Quality at Crescent Electric Supply in East Dubuque, Ill.

IDEA will continue helping distributors and manufacturers understand the value of synchronized data at the master, into stock, and SPA level, Schlader said. “Synchronized into stock pricing enables distributors to save time, lessens the load on the manufacturers’ customer service people and frees the agents to spend more time selling.”    

For more information the IDEA’s Synchronization Audit Service, contact Nick Manzo at 703-562-4646 or nmanzo@idea-esolutions.com.

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Sonia Coleman has been involved in electrical industry issues for over a decade. She serves as a freelance writer and communications & web consultant. She can be reached at scoleman@colemanunlimited.com .