RosettaNet Interest Grows

By Rob Spiegel -- Electronic News, 6/11/2004

The long promise of RosettaNet standards is that they can improve supply chain efficiencies by uniting suppliers, distributors and customers into a seamless and global electronic communion. That promise is finally turning into reality.

Arrow Electronics Inc. recently announced it has achieved that intimate connection with AVX Corp., an international component manufacturer and distributor with offices in Myrtle Beach S.C. The two companies have connected their component supply chain via RosettaNet’s partner interface process (PIP) 3A4 and PIP 3A7.

The RosettaNet PIPs allow the two companies to share real-time purchase order requests and acknowledgements. According to Arrow, the bilateral communication reduces the cycle time by as much as 90 percent and improves visibility and service to customers.

In the past, order processing has been slow and prone to errors. “In a best-case scenario with EDI, you were in a batch process that took 24-hours for response on a P.O. requisition. You would get 60 percent acknowledgement in a day, but then there would be change orders. With the remaining 40 percent, you would get acknowledgement failure,” says Paul Katz, Arrow’s VP pf digital supply chain solutions. “It used to take people two to three days to get everything into alignment.”

Katz notes that RosettaNet PIPs have taken the process forward dramatically. “With RosettaNet order management you get 80 percent-plus with full-blown acknowledgement in a matter of minutes with no exceptions,” says Katz. “There rapid resolution in exceptions and things are worked out in 24 hours.”

Arrow has been working on RosettaNet implementation for years. The distributor is in full validation process with five suppliers. “In validation, we’ve agreed to implement the RosettaNet PIP and prove that it works,” explains Pamela Webber, senior manager of application development eCommerce at Arrow. “That validation ends in June. It’s more than a beta test. In validation, it becomes a proven model for the supply chain.”

According to Katz, the biggest recent development in RosettaNet is the shift from experimentation to actual supply chain implementation. “We’ve evolved from the phase where we were just experimenting,” says Katz. In many cases, a RosettaNet PIP allows Arrow customers to peek through Arrow and check the product availability at the supplier. “We have an implementation with National and Phillips where we facilitate real-time product availability. The price availability PIP streamlines the flow of information from our suppliers to our customers.”

Asia: A Big Push for RosettaNet

Though RosettaNet connections are being forged in North America and Europe, the standards are taking deepest root in Asia. The Far East is ripe for RosettaNet for two big reasons. First, companies in Asia have very little in the way of legacy systems to hinder their moves straight to RosettaNet. And second, governments in Malaysia, Taiwan and Singapore have contributed resources to indigenous corporations to encourage RosettaNet development.

The idea is to help their own companies create a technologically adept supply chain. Even China has recently acknowledged the importance of RosettaNet. “Companies demonstrating a commitment to RosettaNet are Taiwan, Malaysia and Singapore,” says Katz. “And back in the fall, China established a memorandum with RosettaNet. That’s an important development when a government entity in China favors RosettaNet.”