Price updates made simple

An electronic subscription service for vendor price updates helps Petter Supply save time and money.

by Richard Vurva

When the Henry A. Petter Supply Company started urging vendors to submit price updates electronically a few years ago, company executives envisioned major benefits. Instead of re-keying data from price sheets or catalog pages, employees could import data electronically and let the computer do the number crunching. But the change didn’t occur quickly or easily, says marketing manager Ron Overton.

“Each vendor gives us information differently. It’s like vegetable soup,” he says.

Some send price updates in Microsoft Excel, others send diskettes using a comma delimited format or Word documents and some even send Portable Document Format (.pdf) files which have to be manually updated into Petter’s computer system. So, while the move eliminated some manual data entry requirements, it also created an entirely new set of problems.

In mid-2003, the Paducah, Ky., company started using the i2 eDataFlex Pricing Service, an electronic subscription service that supplies weekly price and product information updates to distributors. It enables distributors to greatly reduce the time-consuming and costly task of manually updating price and product information in their databases.

In the past, manufacturers mailed price sheet updates and distributors like Petter had to key in the information manually, explains John Henry, director of marketing for i2 Trade Service, provider of the electronic subscription service.

Over time, some manufacturers started submitting price updates on floppy discs, but then distributors would have to write a routine for each particular diskette.

“Some distributors employed an entire IT staff because they had to integrate 100 or more formats,” Henry says. “This service puts all of that data into a common format that addresses all the different business systems that distributors use. It streamlines what otherwise is a labor-intensive process.”

Henry says the i2 industrial product database includes more than 1 million items from hundreds of vendors, and the list continues to grow.

Previously, fewer than one-third of Petter’s vendors sent price updates electronically. Since utilizing the eDataFlex Pricing Service, Petter now receives automatic price updates from about 55 to 60 percent of its major vendors, including Danaher, Stanley and Klein Tools.

“Plus, the information is more timely, more concise, and easier to map into our system,” says Overton.

Major productivity gains
Once a week, i2 sends Overton an e-mail notifying him there’s new information available. “I go to a Web site and log in with a password and download the information into my system,” he says. Distributors select the manufacturers included in their report, and can also choose to receive the data on tape, disc or online. A permanent identity key (PIK), a unique code assigned to each product item, matches up eDataFlex data with Petter’s internal data, eliminating pricing update errors.

Overton says the electronic updates will save Petter Supply countless hours of data entry time.

“We see this as a major productivity enhancement. In our active SKU file, we have around 46,000 items. In our total database, we have over 300,000 items. To have somebody sit down and update that manually, well, it’s hard to calculate how much effort that would take,” he says.

Instead of two people entering price updates, Overton says one person will be responsible for data integrity in the future. Since the price updates arrive automatically, it eliminates the need for buyers to call up suppliers searching for accurate pricing.

“By improving productivity, it’s unlocking staff time for other activities. Now, we have buyers in our purchasing department who solicit price increases. With this service, we can take that responsibility away from those people, freeing them for other tasks,” he says.

Improving invoice accuracy
The updates happen almost instantaneously. For instance, one recent update affected about 1,000 items in Petter’s Prophet 21 Acclaim software database.

“From the time I received the e-mail notification, went to i2’s Web site, retrieved the data and plugged it into our database, it took maybe 30 minutes,” he says.

Petter pays about $300 a month for the pricing service, far less than the cost of labor for time-consuming data entry. In the future, Overton hopes to utilize i2’s eDataFlex Catalog Connect, a quarterly electronic subscription service that provides product information updates for distributors to populate Web site storefronts or print catalogs.

About 75 percent of vendor pricing updates arrive between the last week of December and the first week of February, which used to create a data entry time crunch. In the past, it may have taken weeks to update the entire database, which either delayed billing or invoices had to mail with outdated pricing. With the new service, invoices scheduled to mail the day updated data arrives reflect the new price.

This article originally appeared in the March 2004 issue of Progressive Distributor magazine. Copyright 2004.

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