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Hardware Technology Forum focuses on EDI, data synch

BY HBSDEALER Staff

Memphis, Tenn. While data synchronization has become the new reality for many manufacturers, this year’s Hardlines Technology Forum (HTF) did not overlook Electronic Data Interchange (EDI), the backbone of ordering and billing between retailers and their suppliers. Sessions looked at EDI’s increased use in transportation, the roles played by various EDI documents, and in today’s final presentation, the changing nature of the EDI coordinator’s job.

EDI also surfaced during the Retail Panel, a conference highlight where retailers and distributors discuss their upcoming IT initiatives. There were no major announcements this year, however, as the buyers in the home channel seem to have their hands full with projects they’ve already started.

Approximately 225 people attended the four-day conference, held April 21 to 24 at the Peabody Hotel. Technology vendors peddled everything from EDI outsourcing to data encryption to help with U.S. Customs requirements.

During the two-hour Retail Panel, representatives from Orgill, Lowe’s, Do it Best and True Value answered pre-submitted questions from the audience. Some of the inquiries sounded like repeats from the previous day’s “Seller’s Forum,” where vendors complained about fines and “scorecards” that give them little feedback on what they’re doing wrong.

Brett Hammers, vp-marketing for Orgill, said his organization prefers to works one-on-one with problem vendors. “We don’t just put information out there,” he said. “It’s in our best interest to handle [feedback] strategically rather than globally.”

Greg Linder, director of supply chain operations for True Value, spoke of a visible supply chain solution the co-op is rolling out, through Sterling Commerce, that will result in more consistent lead times for incoming products. True Value is not planning to implement data synchronization anytime soon, he said, adding: “You can synch all the data in the world, but it’s [data] accuracy that keeps us up at night.”

Lowe’s, on the other hand, implemented data synchronization with most of its vendors and has moved on to a marketing data pool initiative. Last year the North Carolina retailer began collecting images and data for Lowes.com and in-store use through Big Hammer, a division of EdgeNet. The retailer is doing the project in phases, with the three categories, lumber, rough electrical and rough plumbing, set to be completed by the end of 2008.

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Tough talk at HTF

BY HBSDEALER Staff

Memphis, Tenn. The Hardlines Technology Forum, held here April 21 to 24, offered in-depth seminars on data synchronization, supply chain visibility and other essential topics for tech-savvy manufacturers. But this year’s conference, organized by the American Hardware Manufacturers Association (AHMA), added a new feature that appealed to suppliers of every stripe: “How to Do Business with [insert retailer].”

Do it Best went first, with a two-hour session on its new vendor portal, vendor scorecards, market enhancements and efforts to develop a consistent set of product attributes for all its warehouse items. The Fort Wayne, Ind., co-op brought six executives to the event, and three of them gave presentations and answered questions during “How to do Business with Do it Best.”

One of the executives was divisional merchandise manger Dave Cole, who came from the business side of Do it Best. After asking for a show of hands, Cole noted that many of the conference attendees worked in non-IT positions. The AHMA made an effort to recruit these individuals this year by adding a new track aimed at “business side professionals” who work in tandem with EDI and logistics staff.

“How to do Business with Lowe’s” was a primer on the basics of setting up new items, sending advanced shipping notices and ironing out the kinks in invoices and purchase orders. An all-female team from Lowe’s, clad in red shirts and blacks pants, represented EDI/vendor support, electronic commerce, product information, accounting and PCM initiatives. They responded to specific inquiries and dispensed advice, although the latter often ended with a visit to LowesLink.com. The team also included Michelle Adams, director of merchandising operations and planning for Lowe’s.

The conference continues today with more educational sessions, “How to Do Business with True Value” and the retail panel presentation. This year’s panel includes representatives from Do it Best, True Value, Lowe’s and Orgill. Other retailers who attended the conference include Home Depot and Mitre 10, the Australian home improvement chain.

Patrick Wischmeier, vp-information technology at Oatey Co., used one of the many networking breaks to get face time with Howard White, Home Depot’s manager of sourcing and vendor management. “Our biggest customers are Home Depot and Lowe’s, and they’re both here,” Wischmeier said. “I’m very interested in what their agenda is for the next year.”

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Ace reports revenue increase in 2007

BY HBSDEALER Staff

Oak Brook, Ill.-based Ace Hardware reported wholesale revenues of $3.97 billion for the year ending Dec. 29, 2007, which was a $39.4 million — or 1 percent — increase over wholesale revenues of $3.93 billion in 2006.

This jump, the sixth consecutive annual increase for Ace, came despite declines in the U.S. housing market and a weak economy, as well as a sizable internal accounting error discovered in August that put Ace’s equity — previously reported at $320 million — at $168 million.

Ace said the revenue increase was driven, in part, by 171 new Ace stores worldwide, as well as an increase in international revenues of $24.1 million, or 14.4 percent. Ace currently operates stores in all 50 states and in 63 countries.

“Our operations are solid, and we’re making investments in both our retail and wholesale infrastructure for the benefit of both the short- and long term,” said Ace president and CEO Ray Griffith. “We are pleased to have the audit of our 2007 financial statements complete and are encouraged by our 2007 results, especially in light of the economic pressures on our sales and overall operating expenses.”

Ace reported net income of $86.9 million for the full year 2007, which was down from record net income of $94.5 million generated in 2006. The decline in net income in 2007 reflected lower gross profit rates due to one-time gains realized in 2006 on commodity pricing and opening stock order discounts associated with the opening of a new distribution center and higher expenses to support new retail initiatives and the cost of the 2006 financial restatement, the company said.

Year-end patronage dividends distributed to retailers for 2007 were $81.2 million.

Griffith said Ace continues to focus on re-engineering its supply chain and employing software enhancements for added efficiencies throughout its distribution, merchandising and inventory control systems. He also highlighted a retail rollout of an exclusive initiative to improve service and the overall customer experience at Ace stores, as well as a piloted test of an enhanced product offering to increase retail sales and profits throughout the store.

Other programs going forward include a 2008 roll-out of an all-new integrated consumer marketing plan to drive traffic, retail sales, retail profitability and average transaction size; and an effort to enhance store growth by attracting new investors and helping existing Ace retailers branch out and open additional locations. Ace anticipates 125 new stores will open in 2008.

“Along with the sluggish economy and waning consumer confidence, we’ve been faced with many challenges this past year,” Griffith said. “We’ve had to look at our business differently and make some difficult strategic decisions to operate smarter and leaner.”

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