▪ The past year has been a roller coaster for electrical distributors contemplating an e-business solution. You've had it drilled into your head that the Internet is changing the way we do business. It may be taking longer than expected, but know this: costs are being reduced while customer service and sales are going up. How? The Internet.

Let me ask you this. What if you could see your available inventory, your supplier's inventory and your trading partner's inventory from your desktop in real-time? How would your service levels be impacted? What would happen to your inventory investment?

Let's say you are an electrical distributor that focuses on the contractor trade and you have a trading partner that sells tools to the industrial trade. What if you could sell your buddy's products to your customers, all at a very low transaction cost?

More questions: Are you tired of suppliers sending the wrong product because they could not read your faxed purchase order? What if you could be confident that all elements of the PO could be understood with every transaction? What would that do to your service levels?

All of these questions are being answered today through the use of Internet trading networks. The promise of Internet commerce is here via private exchanges or trading networks linking partners, manufacturers, distributors and customers who can trade products and information with nominal transaction costs.

The first key is having access to all this information direct from the enterprise software powering your business. To be most efficient, you don't want your customer service people to jump to a Web browser to look up an item — you want them using the enterprise solution used everyday for quoting price and availability.

The second key is rationalization. Whether your customer service person is looking for inventory from another distributor or from the manufacturer, how does he know the item codes? A good trading network will rationalize the item codes. If you call one item a SQD 1234 and your partner calls the item a SQ-123, the trading network will do the conversion enabling a machine-to-machine transaction to occur without human intervention. Your customer service person can scan what your partners have in stock and in what quantities as well as check the same information for your suppliers and trading partners.

The third key is turning one distributor's dead stock into another's gold. For example, let's say your customer is an electrical contractor wiring a new housing complex. He needs 150 lighting fixtures, and you ran out of the model he needs. To prevent him from going elsewhere, you log onto the Internet trading network. A search for the lighting fixtures reveals the model is an excess stock item for another distributor. It turns out the distributor is willing to sell it to you below cost without a minimum order amount. Imagine how happy the electrical contractor would be.

This can also be used for normal stock replenishment using an Internet trading network. The information simply appears on your purchase requirements screen. If you want to buy from another distributor for less than you'd pay your main supplier, simply click a button and the transaction is off. You come out the hero by providing the item at the best available price — with a few keystrokes and no time lost.

The fourth key to success is the messaging and transformation services needed to process a business transaction. Internet trading networks provide valuable functions in the e-commerce puzzle, including security and reliability. An Internet trading network should provide security so mission-critical business documents can be sent securely over the Internet. An Internet trading network must be reliable enough to ensure that transactions are sent only once with guaranteed document delivery in the way trading partners format existing documents.

The fifth and final key to Internet trading network success is comprehensive permission management and relationship management. Using an Internet trading network, business relationships are preserved, allowing trading partners to determine who can trade with whom without peering into each other's inventories.

The ultimate goal — increase customer service and reduce costs.

Doug Levin is vice president of sales, Prophet 21, Yardley, Pa. He can be reached via e-mail at dlevin@p21.com or via phone at (213) 493-8900.

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