Cost reduction in the industrial-distribution chain was the topic at a summit on electronic commerce collaboration in the MROP Industrial Channel held in Cleveland at the Weatherhead School of Management at Case Western Reserve University. The Industrial Supply Manufacturers Association (ISMA), Cleveland, sponsored the summit, which involved manufacturers of industrial products, industrial distributors, and academic supply-chain authorities from Case Western Reserve and Texas A&M Universities.
The groups discussed how, for most industrial distributors and manufacturers, the distribution channel cannot keep up with customer's expectations for cost reductions. E-commerce and electronic data input (EDI) for order input and invoicing, along with real-time shipment and delivery information, are functions of e-commerce, which provide reduced costs and information that can help manufacturers, distributors, and end users.
The limiting factors to widespread implementation have been standardized product codes and apprehension about the cost of implementation. While many view the standardization process as a cumbersome one, the ISMA e-commerce committee pledged to bring various resources together and form a steering committee to accomplish the task, pending ISMA Board of Directors approval. With ISMA, Industrial Distributors Association (IDA), and UCC Inc. supporting standardization, along with software and content providers such as I2, IBM, Profit 21 and Prelude providing technical support and cost-effective implementation assistance, the costs of software and implementation expertise have come down dramatically. Summit sponsors and participants are hopeful that many more companies will take time to investigate the benefits of e-commerce and join in the overall program for MROP-distribution-channel cost reductions.