- The 888 Item Maintenance document would set up and amend all product master records in a supply chain.The 879 Pricing document would modify the pricing data stored in those master records.The 889 Promotions document would distribute promotional conditions.
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It's hard to fault this solution in concept. It addresses the root of the problem by generating all master records and modifying information from a single source, eliminating mismatched master records and communication problems in distributing transactional data.
It's simple and elegant. And it turned out to be unworkable.
Infrastructure defects
UCS II couldn't work as a canned solution, not because the proposed documents and procedures wouldn't do the job (they would), but because the relationships of the supply chain participants placed a huge burden on brokerage firms.
In the grocery industry, a retailer requires products from dozens of manufacturers. Because it's logistically impossible for the retailer to deal directly with this many partners, middlemen -- brokerage firms -- do the job for them. A retailer can deal with a handful of brokers, and thereby have access to a huge number of manufacturers, with the logistical burden shifted to the brokers.
It looks the same way on the other side of the supply chain. Manufacturers have potentially hundreds of retail outlets for their products, more potential partners than they could ever realistically deal with. So they, too, deal instead with a handful of brokers.
I visited many of these brokerage offices personally. The middleman in many supply chains is a humble participant, valued only for the willingness to do this massively complex networking with minimal resources. I found many brokerage offices to be very marginal operations, with modest offices, few computer resources, and minimal personnel.
On paper, it looked like EDI would make their lives easier; in reality, it was a gargantuan burden, from a cost-of-implementation and training standpoint.
A retailer, then, has a one-to-many relationship with brokers. A manufacturer, likewise, has a one-to-many relationship with brokers. In the middle, however, everything is many-to-many. Each broker supplies many retailers, from many manufacturers.
In EDI terms, a retailer or manufacturer generally has a single in-house EDI system cranking out orders or invoices and uses a single value-added network (VAN). The broker, however, must accommodate every last one of these partners, interconnecting to all their different VANs, in order to keep their business. This situation is made far worse by the fact that retailers and manufacturers tend to be large and cash-rich, while brokers tend to be small, existing in very slim margins.
The implementation of UCS II, then, with the broker serving as the critical clearinghouse for data flying in both directions, placed the bulk of the expense and responsibility on the party in the supply chain with the least money and the fewest resources.
Lessons learned, round one
Right out of the gate, two things are clear. First, in the ever more dynamic world of supply chain management, the need to be lean and mean generally invalidates any canned solutions to data distribution. Flexibility is a must, of course, and any solution that can't be very specifically tailored to the actual distribution scenario is probably a poor solution. And flexibility here doesn't just mean software and procedure; it also means the building up of infrastructure and the distribution of the burden of putting it together.
Second, it's clear that the age of synchronised data is upon us. The goals of the UCS II initiative are pursued vigorously in supply chains serving most industries at this point. The benefits in error reduction are obvious, and the competitive advantage is irresistible. EDI does offer the means to coordinate data distribution throughout a supply chain: It's just a matter of avoiding the wrong ways to do it, and finding the right way.
The "right way," in this case, is to abandon preconceptions going in--the value of EDI's flexibility is lost if a canned solution is preordained. Data synchronisation is worth all manner of inconvenience to achieve for the long-range savings realised from error reduction. But, like all partnerships, it hinges more on cooperation than elegance.
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