6/15/07
Just speaking as an old general manager here....I always liked my P&L to
show expenses as a percentages of sales.
Let's just look at one transaction set for now, the 850 Purchase order
inbound.
Pre-EDI-cost = total admin expense / total sales ==> $expense per dollar
of sales
Post EDI cost
(total admin expense (non-EDI orders) * NonEDI sales / Total Sales ) +
(Additional EDI-specific expense * Total EDI sales / Total Sales) ===> new
$expense per dollar of sales.
If your post-EDI $expense per dollar of sales is not less than your pre-edi
expense, EDI was a bad investment.
You can play around with the formulas, but conceptually I like the idea of
"expense as a percentage of sales"
What this of course does NOT factor in is "where you count the sales to the
Eight Hundred Pound Gorilla Corporation, who tells you your sales to them
will be precisely ZERO unless you DO start using EDI." Nor does it account
for any sales *increase* at an existing (non-EDI) customer who buys more
from you because "it's just so darned easy to buy from you because you (one
of many possible vendors for this product) now have an EDI setup with us."
It's a lot like VMI (Vendor Managed Inventory) programs... sure the specific
VMI item sales are nice, but getting locked in as a 'preferred' vendor often
results in opportunities to sell OTHER items - opportunities you might never
have had had you not started up the VMI program.
And "EDI Capability" can be a great door-opener for marketing to NEW
customers or customers where you could never get past the receptionist. "Why
are you different?" "Because we have an established computer-to-computer
supply chain business system, which will of course be available to you; you
can use it to reduce YOUR net expense of ordering!"
Michael C. Mattias
Tal Systems Inc.
Racine WI
[EMAIL PROTECTED]
...
Please use the following Message Identifiers as your subject prefix: <SALES>,
<JOBS>, <LIST>, <TECH>, <MISC>, <EVENT>, <OFF-TOPIC>
Job postings are welcome, but for job postings or requests for work: <JOBS> IS
REQUIRED in the subject line as a prefix.
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/EDI-L/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/EDI-L/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:[EMAIL PROTECTED]
mailto:[EMAIL PROTECTED]
<*> To unsubscribe from this group, send an email to:
[EMAIL PROTECTED]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
