Hunt says 3M also benefits because the EDI purchase orders it receives through the hub have fewer errors than those through its extranet and require few if any customer service contact from 3M back to its distributors. Doug Lescarbeau, director of e-commerce at Loctite, another manufacturer that is trying out the hub, says Loctite receives 1,000 calls daily to customer service about pricing and availability. Tackling dead inventory Several distributors are excited about the trading hub's potential to tackle their dead inventory woes. While several online exchanges exist for surplus MRO inventory, and end users can also bid for items on auction sites, observers suggest none of those make it as easy for distributors to source and conduct orders from one another. By standardizing distributors' and manufacturers' parts numbers, the trading hub claims to make it easy for distributors to source products they don't stock from a trading partner with one stroke, sorted by best price if they want.
Distributors maintain control over who they trade with.
Fees for the hub are transaction based. A manufacturer like Loctite pays fees when a distributor orders products, or Eagan's distributorship pays if it sources products and receives them from another distributor, for example. Some obstacles remain, such as how distributors should identify slow moving items - whether by price or by last shipped dates, for example. Terry Conder, purchasing manager and legacy systems administrator at Midwest Industrial Tools in Omaha, Nebr., another distributor that is trying out Trading Partner Connect, believes those technical issues will soon be worked out. Maybe we're all carrying too much inventory.