Apparel Firms Cope With EDI at FBI Seminar
Preparation and taking advantage of new technologies are the keys to helping young, growing apparel companies cope with the sometimes confusing world of electronic data interchange (EDI), said retail and technology executives speaking at a Fashion Business Inc. (FBI) seminar held Jan. 29 at the New Mart in Los Angeles.
About 75 company representatives attended the “How to Prepare for EDI” seminar hosted by FBI, a nonprofit organization that helps young companies grow their businesses. The event was co-sponsored by software firms AIMS, Innovative Systems and Progressive Label. Attending panelists were Chris Noble, EDI administrator for Fresno, Calif.- based departmentstore chain Gottschalks; Matt Sperr of Innovative Systems; Scott Chaban of AIMS; Marvin Davila, EDI specialist for YMI Jeans; and Jose Flores of Progressive Label.
EDI, which is the electronic-driven communication between retailers’ selling floors and their trading partners’ accounting offices and warehouses, has become a standard for anyone doing business with chain stores. For up-and-coming companies however, it could mean a costly and confusing endeavor as a result of charge-backs, hardware and software costs and additional manpower.
The problem most young and established apparel firms have is complying with the range of standards set by retailers. While Universal Product Codes were established years ago, retailers continue to set their own variations in protocol and procedures. Their trading partners have been finding it tough to keep up with the changes, the panelists said.
Nordstrom, for example, recently changed certain EDI accounting procedures to eliminate accounting steps for its back office. The Seattle-based specialty chain now demands one invoice per shipment for each purchase order rather than one invoice per store with each purchase order. Sears recently added a new payment order procedure, Dillard’s engaged new bill-of-lading requirements and Wal-Mart and Meijer have instituted new AS2 protocols.
“It’s like one big puzzle,” said Sperr of EDI supplier Innovative Systems.
“It’s hard enough to produce garments,” added Henry Cherner of Santa Ana, Calif.- based AIMS.
Cherner said apparel firms can deal with EDI through vehicles such as AIMS’ online service bureau, which, through FBI, provides EDI and management services using the Internet. Customers pay month-to-month, with prices starting below $400. That could be easier than making a $10,000 to $20,000 upfront investment for a complete software package, Cherner said.
Costs have become a big issue in recent years. Obtaining the Uniform Code Council (UCC) codes necessary to operate EDI can cost more than $3,000 today compared with $300 to $400 only a few years ago, Cherner explained. The problem, he said, is that UCC and QRS have a lock on the marketplace. QRS runs the database used to upload identification numbers that vendors need to work with a retail account.
Service bureaus such as Innovative Systems have developed fully integrated systems that do all the work for vendors, including providing translators and mapping tools necessary for deciphering data.
But EDI experts like Davila, who has worked with a number of companies on the vendor and technology side, said that even when working with service bureaus, preparation is necessar y for successful EDI operations.
“You need to be careful and have the proper setups, terms, store numbers, etc.,” he said. “You have to have a procedure in place. If you don’t, you’ll definitely get chargebacks. You have to have a specific way of doing things and never take shortcuts.”
While EDI is often seen as a burden placed upon the vendor by the retailer, Noble of Gottschalks said that it helps trading partners and speeds up the distribution channel.
Added Virginia Moreno of V. Moreno Inc.: “When I started, I couldn’t send an email. Now I’m doing everything. And if I can do it, anybody can.”
Experts said the evolution of EDI may call for the present system to be eventually phased out as more businesses conduct their supply-chain functions over the Internet. —Robert McAllister
