A Toast to EDI

From beer to wine to whiskey, Southern Wine & Spirits of America delivers it all, giving its customers something to hoist their glasses to. Through a number of acquisitions and market-savvy moves, the company has made the most of its more-than-30-year history. It has even established distributorships in well more than half a dozen states throughout the country. Getting to this point, however, hasn't always been easy. As with any company the size of Southern Wine, growth of the magnitude it has experienced can create interesting situations, not the least of which have had to do with its IT infrastructure.

Southern Wine had maintained disparate business processes at each of its distributor locations. This decentralized mode of operation was fine for a while, but, as the company expanded, its nationwide customers, who include large, chain-based retail outlets and restaurants, soon began to expect similar processes throughout the Southern Wine organization. In particular, they indicated that order processing via electronic data interchange (EDI) should be common to all of Southern Wine's distributorships.

"Our customers assumed that, if you can trade EDI with them in Florida, you can also trade in California," said Bill Fitch, Southern Wine's national EDI manager. "It's a natural expectation, especially if the company has a national presence and it wants the best ROI for doing business electronically."

Although all of the company's distributorships had been outfitted to conduct business via EDI, not all of them were using it. Customer pressure mounting, Southern Wine had to come up with a solution for all of its distributorships to give its many nationwide customers the uniform EDI solution they were looking for.

A Learning Experience

For a lot of companies, a rollout such as this might sound like a relatively simple task: Find an EDI solution and implement it on a centralized system. No muss, no fuss. However, Southern Wine faced some industry- and business-specific constraints.

Unlike companies in many other industries, those in the spirits industry have to maintain operations in the state in which they do business. Orders and payments have to be processed at each distributorship location.

Additionally, Southern Wine was dealing with three sets of EDI standards: the Alcohol Beverage Industry (ABI) standard for its suppliers, the Uniform Communications Standard (UCS) for its grocery-industry customers, and the Voluntary Interindustry Commerce Standard (VICS) for its retail customers. The ABI standard wasn't really an issue (because all of Southern Wine's EDI-based suppliers use it), but managing the other two became cumbersome.

For example, the perfect-world Southern Wine/supplier EDI business flow began with an incoming Item Maintenance Transaction set, or 888, from the vendor; the 888 included a product description, quantity, and price. Following this was a Southern Wine-generated purchase order, or 850. The supplier would then send an invoice, 810, and payment would be made with an 820. The difference between the ABI standard and UCS lay in the numbers: When Southern Wine dealt with its grocery-industry customers, its ABI 850 would become an 875 and its 810, an 880. As an Executive Committee member of the ABI/EC Group, Southern Wine was instrumental in the decision to align ABI EDI standards with the Uniform Code Council (UCC). It was decided that the beverage industry would best align with the grocery industry's UCS. This arrangement would allow middle-tier suppliers of the spirits industry, such as Southern Wine, to reduce their efforts to maintain several different EDI standards.

Before this alignment could take place, however, the ABI/EC Group had to go before the UCS Standards Maintenance Committee (SMC) for approval. Approval was granted a little more than a year later, resulting in the addition of ABI requirements to not only the UCS Standards Manual, but also the VICS Standards Manual.

There were two major transaction sets that were added to the UCS Standards Manual: the 850 purchase order and the 810 invoice. ABI's business processes differ from [those of] the grocery and retail industry, mainly due to government regulations. Guidelines were written and added to the standards manuals to define ABI's use of segments and elements.

The ABI/UCS alignment was a long, drawn-out process but was worth the effort. It cut the number of EDI standards for the spirits industry from three to two.

Weighing the Options

While pushing for alignment with the UCC, Southern Wine was also addressing its own, internal EDI situation. It took a second look at its current PC-based solution and questioned whether it should maintain the package or look for a new one that would grow with the company and, more importantly, be Y2K-compliant. After considering the alternatives, the company opted for a new solution that combined the overall computing strength of IBM's AS/400 and the EDI savvy of EXTOL.

No small part of Southern Wine's choice of EXTOL was its widespread but isolated EDI requirements. Rather than have each location run independently, it was decided to consolidate all of its EDI operations under its corporate IT division, Group Services. This was possible thanks to EXTOL's ability to run multi-environments on the same AS/400 simultaneously. Southern Wine was able to consolidate each site by moving its EDI processes to another environment and consolidate each trading partner one at a time. This minimized their exposure to the site by trying to convert them over all at once.

"As a site comes up on EDI, our Billing and Distribution software already has the interfaces built into them. We are like an application service provider to all our sites," explained Fitch. "When they have orders or invoices to go to out, the data is sent to our EXTOL system through our network, where it gets handled and sent out to our trading partner's mailbox. It works just the reverse on inbound processes."

Through EXTOL's Auto routing and External file lookup processes, Southern Wine is able to manage the routing of the data to all the sites with very little outside external program calls. This is very important because programming resources are limited and tend to add more complexity to the process.

Another part of Southern Wine's decision to use EXTOL was the product's Advanced Auto-Mapping feature. When setting up a new trading partner, the company doesn't have to weed through trading-partner requirements, pulling the transactions it wants to use from the standard and defining them segment by segment. It can specify the version of the standard the trading partner is using, and the data is mapped automatically.

Tried and True

Customers have been very pleased with Southern Wine's new EDI iteration, citing the convenience and accuracy of EDI as the primary reasons for their approval. Moreover, this is key to Southern Wine's growth. In the spirits industry, middle-tier distributors are awarded distribution privileges based on the efficiency of their operations. Increasingly, EDI is becoming a vital part of that efficiency.

Because only a small portion of its total number of business partners transact with Southern Wine via EDI, the company relies on tried-and-true customer service to address the majority of its business. As Fitch pointed out, "We don't require EDI to do business. We have vendors and customers of all sizes and shapes; for those who have an EDI initiative, we're working diligently to be prepared. It's our best business practice to be both vendor- and customer-service-oriented." Combining the best of EDI and customer-service know-how, Southern Wine is ready to take on all new customers, EDI-ready or not.