Northumberland Contracting - 2,200 people in a Directorate made up of five operational divisions. 'The five are Highways, both maintenance and improvement works; Transport, including the provision and maintenance of vehicles; Catering, school meals and civic catering; Building Cleaning; and Grounds Maintenance. A sixth division, Contract Support, provides administrative, personnel and financial back-up. Says Director of Commercial Services, David Maxted: 'We buy everything from baked beans to tyres, from soap to truckloads of asphalt.'

The initial impetus to use EDI came from two directions: financial and technical. 'We take a look at our costs every year, and every year we'd been asking ourselves the same basic question: why is everything so expensive? Why is it costing us so much to do these basic activities - in terms of both labour and computer costs? Then Mike Smith, our Senior Purchasing Officer, and David Malthouse, who handles Systems Management, came up with the same idea at the same time: EDI.'

We started out by identifying the biggest areas for orders and invoices - which were the Highways Division, followed by Transport. Highways has the highest turnover at around £12million a year, and probably the highest number of orders, around 10,000. Transport spends around £5million a year, and involves loads of little bitty one-off orders, for spare parts and the like. So they seemed the obvious first targets.'

The Council started out by organising a seminar for its suppliers - the potential 'spokes' to their 'hub'. 'We outlined what EDI was about, the benefits that we saw potentially coming from a move to EDI, what sort of timescales and resources would be involved. We got a pretty good response: of the 50 or so suppliers who attended, there were only two or three who pulled faces, saying "this isn't for us".'

With the foot-draggers, the Council made its position quite clear from the outset. 'We said to them we're going this way. We're going to run this pilot, and at the end of the trial we're going to be deciding whether EDI has proved itself. And if we take the view that it has, then obviously the degree to which suppliers are EDI- enabled will be a significant weighting factor in the awarding of contracts. Bluntly, those who are EDI-enabled will have a significant competitive edge over those who aren't.'

'Some of the other suppliers proved to be pretty much past masters at EDI. But some of the more recalcitrant ones grumbled about how it was going to push up their costs by five or ten per cent, which sounded like nonsense to us - the up-front costs are minimal. But we didn't bother arguing the toss. We just said, "well that's not the message we're getting from your competitors. If you really believe that's the case, then obviously it's something you're going to have to take on board ... but it won't stop us going the way we're going".'

David ascribes most resistance to nothing more than inherent conservatism-with-a- small-c: 'It's basically because it's new. It's not what they're used to. It's change. It's different. And there are some people out there who just don't like change - full-stop.'

The trial, running since October, means that staff, sitting at a PC terminal, can:

• request a quotation
• submit an order based on that quotation
• arrange for invoicing to be carried out via the system

The Council are looking toward staff cost savings of the order of 5-10% of the total payroll, but at least as important are the twin issues of accuracy and timeliness. Getting orders right, first time, every time, would save a great deal of hassle and wasted effort. And ordering electronically can slash lead-times in the ordering cycle. 'If you have a complex ordering process working via the post, you're adding - what, two or three days - to each stage of the process. With electronic trading, that comes down to 24 hours at the outside.'

Five years of Compulsory Competitive Tendering (CCI) have already dictated a steady reduction of inventory, but Just In Time (JIT) is still very much a live objective, and EDI is seen as a key element in its pursuit.
The project is in its early days, so judging progress isn't quite an exact science, but overall, David's happy with the way things appear to be going. 'BT have been very good so far - we've had no problems. I think both BT and Kewill-Xetal have gone out of their way to facilitate the process. Having said which, of course, this is just the pilot. The real test, I'd guess, will come when we're aiming to put all the ordering and processing systems on there ... we'll see how they handle that one when the time comes!'

David offers a few hints and tips for the EDI-beginner:

• Decide exactly what you're trying to get out of it. 'You need to keep a clear focus on just why it is you're heading down this route.'
• Establish the extent to which you're actually equipped - in terms of hardware, software and skills - to take it on and get the maximum benefit out of it.
• 'Get suppliers on board at the earliest possible stage.' Make sure they understand what you're doing, and why, and how. This maximises your chances of a successful pilot and a smooth implementation.
• Don't rush. 'There's a temptation to try to do everything at once and by yesterday. It's important to keep a focus on getting the most out of it, and if that means nine months rather than three, so be it. Allowing a bit more time also helps ensure that you bring others with you - that they don't see it as a top-down imposition.'
• Share what you're doing with colleagues in other parts of the organisation. We're only one Directorate among seven in this authority, and we've done our best to keep our colleagues informed. They're looking over our shoulders with a mixture of interest and perhaps a touch of cynicism - but we're doing our best to keep them in the picture.'

'It's early days, yet,' says David, 'there's a lot of learning going on - both here and among our suppliers. Inevitably that means a number of hiccups. But even now, I'd say we're getting it right about 95% of the time ... I think we're starting to get within sight of the fine-tuning stage.'

Summary

• EDI enabled Northumberland Contracting to take action to decrease costs
• EDI is a key element in the pursuit of JIT inventory management
• Problems and glitches are inevitable - best identified and addressed through running a pilot before progressing to a full working set-up
• Ordering electronically slashes lead times
• Less paperwork improves efficiency
• Getting orders right first time, every time, saves time and money