From Vision to Reality Alison Cameron & Lucy Abbruzzese

History…performance issue. The industry’s performance in the implementation of key enablers such as EDI has been less than encouraging. March 1997…Reality check. Move from involvement to commitment. Issue

To realize the full benefits would require: Implementation of full suite of transaction sets for procurement, settlement, and database synchronization Critical mass Efficient Consumer Response

Process Supplier Distributor Banks 879, 889, Data Entry Ordering Shipping Invoicing Payment Price, Promotion, Item Information Accounts Receivable Invoicing Shipment Processing Order Entry Accounts Payable Invoice Matching Receipt Processing Purchase Order Management Price, Promotion, Item Information ECR - Product Supply Chain Closed Loop E.D.I. 6 Transportation = optional process) (

Distributor Perspective Manufacturer Perspective Barriers …all parties frustrated

DISTRIBUTOR PERSPECTIVE SMALL CO’S MEDIUM & LARGE CO’S ISSUES u COMPLEX IMPLEMENTATION u COST/BENEFIT QUESTIONED u LACK OF UNDERSTANDING ISSUES u COMPLEX IMPLEMENTATION u BENEFITS RECOGNIZED u LACK OF SENIOR MANAGEMENT SPONSORSHIP FOCUSING ON RESOURCES AND PRIORITIES u LACK OF UNDERSTANDING -NOT A TECHNOLOGY TURNKEY SOLUTION BUT A BUSINESS PROCESS SOLUTION

SUPPLIER PERSPECTIVE SMALL & MEDIUM CO’S LARGE CO’S ISSUES u COMPLEX IMPLEMENTATION u NOT COST JUSTIFIED u LACK OF UNDERSTANDING ISSUES u COMPLEX IMPLEMENTATION u BENEFITS RECOGNIZED u LACK OF SENIOR MANAGEMENT SPONSORSHIP FOCUSING ON EDI RESOURCING AND PRIORITIES u LACK OF UNDERSTANDING -NOT A TECHNOLOGY SOLUTION BUT A BUSINESS PROCESS SOLUTION

Industry Average for EDI Transaction Sets March 1997 % EDI Transactions

New Commitment From Industry New Structure for ECR in Canada Assimilate Food and Drug User Group

ECR Sub-committees Mandated to address EDI Issues

Standards Resolution: Move to common standard Move to common version Efficient Consumer Response

Resolutions: Determine as an industry the feasibility of moving to a common standard and version. VICS 4010

Within the 4010 Standard you must make choices regarding the sub-sets of the standards you will use. UCS - traditional grocery standards - currently used by most of the grocery companies VICS - traditional general merchandise standard - Hudson Bay, Sears, Wal -Mart utilize X12 - used by companies that have special requirements - Shopper’s, Canadian Tire UCS - limited transaction set - for example, transportation transactions are not supported VICS - very highly used in North America - Release 4010 has grocery requirements added - each’s, inner packs, variable weight, etc. X12 - individual company oriented - not a recognized industry standard Position Adopt the 4010 VICS Standard. Change the use of:Purchase Orders from 875 to VICS Standard 850 Invoices from 880 to VICS Standard 810

Strategy For Common Standard Ensure that VICS met all business requirements of traditional UCS Develop common Canadian implementation guide based upon VICS 4010 Develop web based “knowledge network” Develop small company solutions program Efficient Consumer Response

For future Releases after 4010 the food and drug industry agreed to evaluate the Release as an industry and make a common decision regarding it’s adoption. Strategy For Common Version

All purchase order and invoice transactions in the food and drug industry must be executed via EDI no later than May 31, Note: There are organizations that have strategically moved to an evaluated receipt program. In this case the timeframe for invoices will not apply. Efficient Consumer Response

Communications Series of seminars to educate industry Implementing 4010: Moving Towards the Year 2000 June 2,1998 Toronto; June 14, Calgary; June 18, Montreal and June 24, Halifax Efficient Consumer Response

Created web based knowledge network with ECR information, committee minutes, structure Efficient Consumer Response