CHEMICAL INDUSTRY EXPANDS USE OF PAPERLESS TRADING

CHEMICAL INDUSTRY EXPANDS USE OF PAPERLESS TRADING

For chemical manufacturers, paperless trading is the present rather than the future, according to a just completed study by the Chemical Industry Data Exchange group.

The study was presented at the Second Annual Chemical Manufacturers Association/CMA seminar, Feb. 20-21 in New Orleans.Its numbers paint a portrait of an industry where paperless trading is well on its way to becoming a commonplace way of doing business, chemical industry members said.

"We look at it (paperless trading) as a business tool," said K.C. Depew, systems associate at Tennessee Eastman Co., Kingsport, Tenn.

"We don't think there's that much high technology" behind electronic communications systems, he said.

Virtually all of the nation's leading chemical manufacturers belong to Cidx. The group's membership roster ranges from E.I. du Pont de Nemours & Co., Wilmington, Del., to Dow Chemical U.S.A., Midland, Mich., to Union Carbide Corp., Danbury, Conn.

A total of 41 companies responded to the Cidx survey. Of these, 31 are involved in paperless trading on a day-to-day basis and four are testing the technology.

That number isn't much of a jump over last year's figure of 25 companies testing and using the technology, Mr. Depew admitted.

But the number of companies chemical manufacturers are communicating with electronically has soared, and so has the number of messages sent.

"The big jump is in the number of trading partners," Mr. Depew said. According to the study, the chemical industry went from 800 trading partners in 1988 to 2,600 in 1989. "These are new companies that are involved in EDI with us," Mr. Depew said.

Electronic data interchange is the technology that enables companies to replace paper documents. EDI works through the use of strictly standardized computerized messages. Cidx was established to develop and maintain chemical industry-oriented EDI messages.

The total number of EDI messages being exchanged by chemical manufacturers also has soared.

"Monthly volume went from 140,000 to 450,000," Mr. Depew said. "If we keep up that percentage (gain), that's a pretty good growth rate," he said.

The number of different electronic messages used by chemical companies also is rising rapidly, said Lee Foote, manager, EDI, DuPont. In fact, "our breadth (of messages used) is probably greater than any other industry," Mr. Foote said.

More than 25 different messages are either being tested or used regularly by chemical companies, the Cidx study found.

Electronic documents sent range from purchase orders and invoices to daily shipping schedules, remittance advices, price/sales catalogs, ocean carrier reservations and confirmations and bills of lading.

Chemical companies also are trading electronically with a wide variety of suppliers, customers and carriers.

Transportation companies lead the pack. In an average month in 1989, chemical companies sent 65,000 freight invoices and received 119,400. About 15,000 freight status reports were sent, and 157,000 received, and 4,350 bills of lading transmitted.

The next most popular electronic documents were purchase orders, with 14,540 sent and 10,190 received each month.

Three industries besides transportation dominate chemical industry paperless trading, Mr. Depew said. These are automobile manufacturers, fiber and fabric producers, and other chemical manufacturers, he said.