The consumer electronics industry is fairly
compact in terms of the number of suppliers,
Stewart says. Whereas a department store might
have 5,000 to 6,000 suppliers, an electronics
retailer may have 400 or 500. The top 20 percent
of companies doing the bulk of the business
don’t change much, but the bottom 20 percent of
the supplier base can look completely different
over time. Providing a way to quickly get new
suppliers up and running electronically with
those six core documents has been beneficial.
“When a buyer goes into negotiations with a
supplier, they don’t want to wait to write
orders,” Stewart says, adding that GXS web forms
have been instrumental in improving the speed
and security of dealing with foreign suppliers;
the process has eased the previous 12-hour waits
between e-mails that can also be impacted by
language barriers.
Getting high scores
The emphasis on EDI is obvious to all who enter
the lobby of Circuit City’s Richmond, Va.,
headquarters, Varghese says. EDI compliance is
one of the criteria listed on suppliers’
scorecards, which are posted on a billboard in
the lobby, and it accounts for 10 percent of the
overall score. “It’s about educating suppliers
about why they’re doing this and why it’s a good
thing that can help the retailer and the
supplier to be successful,” Keifer says.
Trust is a major challenge in an electronic
environment, says Stewart. “If folks lose
confidence and feel the form is not going to
work for them, they tend to revert to fax or
e-mail and that defeats the purpose: It puts us
back in a manual world.” And that, she adds,
opens the door for security concerns and
inefficiencies that the company prefers to
avoid.
Stewart’s advice to other retailers who have not
moved toward comprehensive EDI is to do so as
quickly as possible. “It’s never too soon,” she
says. “A total electronic model is an absolute
must.”
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