I have a problem. I don't normally like to talk about it, but you may share the same problem and if we get it out in the open, then maybe we can all cope with it better. The problem with this problem, is it doesn't have an obvious name. So while no one likes to be labeled, without a label it is hard to communicate easily. How to describe it? Where to begin?
The problem stems from the nature of the product we supply and how it is handled by EDI (Electronic Data Interchange). These widgets come in different sizes. There are industry standard sizes. 10 different widths, 15 different heights, 5 different depths.
So that is 10 x 15 x 5 = 750 different sizes.
Then there are the colors. We bring out new ones each year, some colors are retired and some popular classics are always going to be available. Say about 25 colors are current with about 5 changing each year.
750 x 25 = 18,750
Don't think these are just boring old boxes. We have several 'styles' to choose from. Contemporary, Classic, Gothic, Art deco. The list goes on. Like colors, say 15 styles with about 3 changing each year.
18,750 x 15 = 281,250
As an available option we can supply a low power economy version, standard, high power or "Max Power" business version.
281,250 x 4 = 1,125,000
They can be with or without an extra adapter port. With or without the toughened, rubberized embedded protection. With or without an "easy-grip" handle.
1,125,000 x 2 x 2 x 2 = 90,000,000
That is 90 million different products! I will stop there but actually there is more. We don't just do widgets. We do widget fittings and widget accessories. We deal with products that are alternatives to widgets and complementary to widgets. We also do bespoke "made-to-measure" widgets.
Now here is the killer contradiction. By volume and by value, 80% of everything we supply is covered by 2000-3000 products, so we give them individual product codes. The catalogue is more than 50 pages. However this 80% of products only gives us 20% of our profits. The bulk of our earnings come from the 20% "non-standard" product.
Now I am ready to confront my problem, "My name is EDI Eddy and my catalogue has been living a lie!".
Most EDI assumes ordering is done by product code reference. This means that for a customer, with a computerised (and EDI enabled) purchasing system, to order from us, they must set up a database with millions of entries. Even if this was achievable, problems still remain.
- How does a purchaser find the correct product code in their database?
- If it is difficult to order electronically, will they order manually or order from some one else?
- When our range of products change regularly, how do thousands of database entries get added and deleted?
So the reality is our EDI is limited to the low margin, less valued end of our product range. Over the years we have been constantly expanding EDI, handling higher message volumes, supporting more message formats and more delivery methods. The reality is EDI has been getting less and less important :(