Handling electronic purchase orders via electronic data interchange is standard procedure for most suppliers these days, according to Marty Stewart, manager of EDI for Circuit City. “Advance ship notices can get a little trickier due to the complexity of the information,” she says. And then there are the order forecasts.

Circuit City has initiated an automated collaborative forecast process that is EDI-based. A weekly order forecast is sent to suppliers, who review it, make appropriate changes to the forecasted quantities and return their committed quantities to Circuit City, referencing the original order forecasts. Circuit City then creates a purchase order. The process is integrated into Circuit City systems, providing security and automated data entry.

                  
“When we first started sending out EDI order forecasts, we were getting manually created e-mail or phone responses back from a great many suppliers with their commit quantities, rather than an EDI transmission,” Stewart says. The inventory group would have to re-key the information from those e-mails and calls — a time-consuming task rife with the potential for error.

The merchandise payables group continued to receive paper invoices from a few suppliers, and not all were able to send the advance ship notices required by the distribution centers when receiving supplier shipments.

“We knew there had to be a better way,” Stewart says.

Circuit City committed itself to enabling all of its supplier partners to electronically trade each of the six core documents that the consumer electronics giant requires: purchase orders, purchase order changes, order forecasts, invoices, advance shipment notifications and order forecast commits.

To enable its supplier partners to comply with EDI requirements, Circuit City signed up last year for Intelligent Web Forms (IWF), a feature of the Trading Grid by GXS, a Gaithersburg, Md.-based provider of business-to-business e-commerce solutions. The subscription-based IWF solution allows suppliers that don’t have the e-commerce infrastructures required for traditional EDI to benefit from a quasi-EDI solution by filling out fields in a customized web form.

Not every Circuit City supplier deals with the GXS web form; many don’t need to because they are EDI-capable and conduct direct exchanges with Stewart’s office. But there are suppliers that have not yet invested in that type of infrastructure.

Consider a supplier that makes a single cable used in the installation of home theaters, says Steve Keifer, vice president of industry solutions and product marketing for GXS. “It’s a lot of these smaller suppliers who generally don’t have the resources or the expertise or the technology in house to do e-commerce.”

Through GXS Intelligent Web Forms, every business with an Internet connection and a web browser can electronically interface with Circuit City to view, create, manage and transmit electronic documents. “Circuit City literally does nothing different on their side,” says GXS product manager Tom Varghese, because GXS takes that burden off the retailer and handles the translation.

Circuit City has been involved with EDI exchanges with some of its suppliers since 1993, Stewart says. Until last year, however, testing of those EDI documents had been done in house — a process that isn’t ideal for efficiency. Such testing “is not work that you can give to temporary employees or associates that don’t have some sort of knowledge foundation,” she says. “But my team is comprised of senior analysts, and it’s not senior analyst work, either.”

So Circuit City — already up and running with IWF — decided to hire GXS to handle the testing, freeing Stewart’s staff to focus on value-added projects.

Many of Circuit City’s suppliers have infrastructures advanced enough that they don’t need the web form, and would rather conduct traditional EDI exchanges. Circuit City is ready and willing to accommodate them. “If the vendor is EDI-capable, within a reasonable amount of time — maybe two to three months — we then move them away from web forms and GXS tests them on EDI,” Stewart says.

But there are some vendors that choose to remain on web forms — at least for order forecasts, which are required by Circuit City but aren’t yet part of every retailer’s EDI repertoire.

Serious business
Circuit City currently trades the sales forecast base and lift data stream with traditional EDI suppliers; only order forecasts are done over the IWF option. But the retailer is working with GXS to expand the capability of the IWF process and make sales forecasts available on web form, as well, because, as Stewart says, “forecasting is integral to our supply chain.”

That’s one of the reasons Keifer applauds Circuit City for making EDI compliance serious business: It can offer a retailer a much-needed edge. After all, Circuit City does business in an arena where it can be nearly impossible to predict which color cell phone will ring customers’ bells from one week to the next. “They really need to have a very efficient supply chain to deal with this,” he says.

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