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July 18, 1990

SIMPLER TRADE PROCEDURES BOARD ON AGAIN ABOUT ELECTRONIC DATA INTERCHANGE IN ACTION

By CBR Staff Writer

SITPRO, the government-sponsored Simpler Trade Procedures Board, once again put on its electronic data interchange hat last week to show how the much-hyped technology is being implemented in two major organisations, Graham Builders Merchants Ltd and GEC Plessey Telecommunications Ltd. Graham Builders is a UKP400m a year distributor of building materials and a founder member of Edicon, the group set up to promote the introduction of EDI into a by and large unimpressed UK construction industry. As Mike Shippin of Graham Builders pointed out, the reason that the construction industry is so far behind sectors like shipping and car manufacturing in its take-up for EDI is the fact that many of the orders passing between firms are not repeat business: accordingly, to use EDI needs both more complex software and a lot more work. Nonetheless, Graham Builders is determined to see EDI process the 750,000 transactions it has with suppliers each year, and has notified suppliers of its intention to use EDI over the INS Tradanet network. Shippin sees EDI as being effective, cheap and a good way of improving cash-flow; apart from using EDI to handle all transactions with its suppliers, he would like to see its application in aspects of the manufacturing, storage, sale and delivery of products; although more difficult to set up in practice, EDI-based selection and specification of products would also be particularly advantageous, and Shippin even conceives that the technical direction of a project could be managed – using graphics as well as text – over Tradanet. At the moment, however, computer-aided design over EDI is in a bit of a mess because of the lack of standards. As a whole, the UK construction industry processes around 450m paper-based transactions a year, costing more than UKP300m: if EDI were taken on board successfully, Shippin reckons savings could be as high as 50%. Meanwhile, GEC Plessey Telecommunications is well under way with its programme to deal with its components suppliers through EDI, affirmed GEC Plessey purchasing analyst David McKears. McKears unflinchingly described the EDI programme as being part of the winning culture at GEC Plessey, with the aim being to reduce response and lead times, and eliminate errors. As most EDI exponents accept, the actual communication aspect of EDI is relatively easy and the user cost reasonably small; similarly, apart from labour, the cost of getting into EDI in the first place is low UKP10,000 for the DEC VAX/EDI software, and UKP5,000 for subscription to the Tradanet network. But as McKearns acknowledges in the case of GEC Plessey, 80% of the work was in developing our own internal systems – in other words, making sure that EDI did the job it was supposed to do in the specific context of GEC Plessey and its suppliers. After deciding to use the INS Tradanet service – already used at some level by many of its suppliers – GEC Plessey’s first problem was that no EDI software existed for the Unisys 2200 that serves its sites at Beeston, Kirkcaldy and Wellingborough. The Unisys machine had to be linked to the DEC VAX 8530 that covers all GEC Plessey sites, which then used DEC VAX/EDI software to gain access to the Tradanet conduit. Now, GEC Plessey has 19 EDI-based supplier relationships, including ones with Texas Instruments and Philips. Underlining yet again that EDI cannot be used in a vacuum, the validity of EDI transactions still has to be checked by an electronic authorisation system that took a further one man-year of programming to develop. GEC Plessey is currently testing with, among others, SGS Thomson, Siemens, STC Cables and Hitachi: if these next round of EDI links are successful, McKears estimates that 23% of GEC Plessey’s purchasing will be through EDI – not bad considering that the EDI programme only got off the ground last July.

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