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Milwaukee Electric Tool Offers Prophet 21 Trading Partner Connect As Alternative to Traditional EDI

Links/Die Casting Engineer Magazine, June 2005

Milwaukee Electric Tool works with a wide range of customers - from big-box retail chains to independent distributors - and knows that not everyone can afford to make substantial investments in electronic data interchange (EDI). "It would be cost-prohibitive for a lot of our regional distributors to make the investment required to do EDI with each of their manufacturers," said Rick Showers, director at Milwaukee Electric Tool.

Making it easier and more cost-effective for distributors to do business electronically is precisely why Milwaukee joined Prophet 21 Trading Partner Connect. Trading Partner Connect, the leading Internet trading network for distributors, streamlines the commerce process between distributors, manufacturers/suppliers, and end-users. Through this trading network, distributors can access millions of items, enabling them to compete on a larger scale and improve customer service, while benefiting from eliminated EDI VAN charges.

Milwaukee executives understand that Trading Partner Connect reduces the need for human intervention and the chance of errors caused by re-keying - driving down costs on all sides of each transaction. "The traditional ways of doing business are labor-intensive and expensive," Showers said. "In the past, our customers had to write up an order and fax it, or pick up the phone and talk to a call center rep. Trading Partner Connect allows one computer system to talk to another, making the process fast, easy, and inexpensive."

A Concentrated Focus

For years, distributors and manufacturers separately concentrated on using technology to reduce operational costs, improve customer service, and grow sales. Both parties lacked the ability to impact the commerce processes beyond their portion of the supply chain.

Responding to the needs of distributors and their manufacturer partners, the tool harnesses the power of the Internet to streamline the commerce process. The service turns the supply chain into an information channel, allowing distributors and manufacturers to electronically exchange information in a secure environment. Most important, trading partners choose with whom they conduct business and how much information to share with each trading partner.

How and Why It Works

The service enables manufacturers like Milwaukee Electric Tool to connect directly to their distributors' back-end business solutions. Through the network, manufacturers and their distributor partners can exchange an entire suite of documents, including purchase orders, acknowledgements, invoices, electronic funds transfer, and point-of-sale data, using multiple technology formats (including EDI and XML).

Manufacturers better service distributors by automatically sending documents directly to their computer systems thereby avoiding manual entry, reducing costly re-keying errors, saving time, and eliminating Value Added Network (VAN) charges.

This connectivity enables manufacturers to accept orders directly into their business system. Plus, since manufacturers like Milwaukee Electric Tool receive distributors' point-of-sale (POS) data, it enables them to adjust production to coincide with market needs.

Distributors, on the other hand, benefit from the ability to view up-to-the-minute product price and availability information, cutting lead times and the need to carry excess inventory. The back-end connectivity also cuts redundancy and re-keying errors, saving them time and money.

A Less Expensive Way to Do Business

Dayton Supply and Tool Company uses the service to send Milwaukee Electric Tool about $400,000 worth of purchase orders annually. The major benefit for the 100-employee, Ohio-based tool distributor? Accuracy.

"It's one computer speaking directly with another," says Carl Woessner, a manager at Dayton Supply and Tool. "We don't have a clerk entering orders. It eliminates a lot of the mistakes that can occur throughout the transaction process."

Manufacturers Sales Company, a Texarkana, AR-based master wholesaler, also buys hundreds of thousands of dollars worth of tools and accessories from Milwaukee each year.

Mike Adams, purchasing manager at Manufacturers Sales, estimates that working with Milwaukee via Trading Partner Connect improves lead times by two or three days. "Using Trading Partner Connect pushes our purchase orders into their system faster, which helps them pull our orders and send them to our warehouse more quickly," said Adams. Adams also believes that the service will decrease the amount of time he spends purchasing items from Milwaukee in half - allowing him to focus on better managing inventory.

"Trading Partner Connect will make it easier for dozens of our customers using a Prophet 21 solution to do business with us," Showers concluded. "And, we'll be able to contain our costs and expand the services that we offer all of our distributors. Everyone wins."

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