Promoting a standard

PTDA/BSA electronic price update format gaining momentum.

by Rich Vurva

When Bearing Belt Chain Company of Las Vegas started using a single, uniform electronic pricing format with suppliers, it saved more than $60,000 in data entry costs. Instead of manually entering prices from hundreds of vendors or writing computer programs to accommodate multiple formats, the company uses the PTDA/BSA Product and Price Information Format (PPIF) developed by the Power Transmission Distributors Association and the Bearing Specialists Association. Company president Steve Philpott is so convinced that PPIF lowers his cost of doing business that he insists manufacturers utilize the format if they want him to carry their line.

“I have potential vendors in all the time, and one of the first questions I ask is if they use the PPIF format. If they don’t, that’s a deal killer for me,” he says.

Since adopting the PPIF, Philpott eliminated a full-time staff position, no longer searches for price books and catalogs, and spends considerably less time writing credit memos and correcting purchase orders for incorrectly priced items.

Philpott previously maintained pricing on about 13,000 stock items, but wanted to add non-stock items from key vendors into his database. Manually keying in parts numbers and prices for the company’s full vendor line would have required hundreds of hours in overtime.

“I sure didn’t want to maintain a half-million part numbers. By adopting this format, what would have taken weeks to do, we can now do in minutes,” he says.

The PPIF is a single-format, single program designed to allow suppliers to provide complete, accurate and up-to-date pricing and product information to distributors. Endorsed by other trade associations including the Association for High Technology Distribution and the American Bearings Manufacturers Association, use of the format has caught on fastest among PTDA members.

“Most major players in the industry have endorsed it and use it. In terms of volume through the channel, we’ve made great inroads at getting the standard utilized,” says Mary Sue Lyon, PTDA executive vice president.

Fifty-seven manufacturer and 54 distributor members of PTDA have endorsed the standard, including the three largest power transmission/motion control distributors, Motion Industries, Applied Industrial Technologies and Kaman Industrial Technologies. Lyon anticipates adoption will increase because the association plans to intensify its efforts to communicate how it can help distributors and manufacturers lower their costs.

One manufacturer saved more than $100,000 in the first year because the company no longer had to send updates in multiple formats using different media. Lyon says the need for a standard is even greater now than when it was first introduced in 1999.

“In the last couple of years, there haven’t been many price increases because customers wouldn’t accept it. Because of rising steel costs, price increases are coming through more often. The consequences of not having a standard format are even more significant,” she says.

Rockwell Automation’s Craig Deitchley says the rising cost of steel forced the company to pass along an unscheduled price adjustment in June.

“Historically, after reviewing costs, we schedule one price adjustment per year, which we communicate in advance to our distributors. The PPIF provides a quick way of communicating price adjustments to our customers,” he says.

The format is also a valuable tool for communicating product changes andintroducing new products, Deitchley says.

He estimates that about 70 percent of his distributors request electronic pricing. Deitchley e-mails price updates to them using the PPIF. He previously used aproprietary Rockwell Automation format. He says distributors and manufacturers both benefit.

“The benefit for the distributor is using just one format of pricing communication for all vendors. The benefit for the manufacturer is the need for only one program for industry-wide distribution, instead of having to use a variety of programs,” Deitchley says.

He acknowledges that some manufacturers still offer custom electronic pricing formats, but doing so requires distributors to plug into dozens of different programs or key in information manually.

PTDA hopes distribution software vendors will incorporate the standard into their technology to spur even greater acceptance. So far, Prelude and Computer Insights are the only software companies to endorse the format.

Steve Epner, a technology consultant with Brown, Smith Wallace in St. Louis, anticipates that other software vendors will incorporate the format into their programs if customers request it.

“As soon as somebody says I will buy your package if you have this, everybody else will jump on the band wagon,” he says. “It is a very simple to use, simple to transmit file, but very complete.”

The format allows channel partners to transfer data in a tab-delimited ASCII file format via disk, e-mail or the Internet. It is easier to use and less complicated than the previous ANSI X.12 832 standard.

Carlos Ingram of Kaman Industrial Technologies estimates that his company saves up to three hours per vendor using the PPIF.

“This year, we’re working on our third round of price increases from manufacturers. I would estimate we’ve saved about 600 hours of labor by updating prices in our system from those vendors who have adopted that format,” Ingram says.

He says about half of Kaman’s vendors that belong to PTDA have already adopted the format. He’s hopeful it will become more widely used by fluid power vendors also.

“I think the way to get it more widely accepted is to work with other trade associations to try to get them to adopt it within their channel so it becomes more universal,” Ingram says.

The format was last revised in October 2001, prompting some channel members to suggest it’s time for an update.

Philpott wants to incorporate links to product images. Salespeople who want to see a photo could simply click on a link that would direct them to the image stored on the manufacturer’s computer server. Before any changes occur, a PTDA/BSA joint revision task force must approve them.

“We don’t want companies to alter the format on their own. When that happens, it erodes the integrity of the program and defeats the benefits that having an industry-wide standard provides,” says Lyon.

This article originally appeared in the September/October 2004 issue of Progressive Distributor. Copyright 2004.

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