Time for a change

The PTDA/BSA product and pricing format continues to gain acceptance

by Rich Vurva

Since it was introduced in 1998, use of the standardized Product & Price Information Format (PPIF) among manufacturers and distributors has steadily increased. Developed by the Power Transmission Distributors Association (PTDA) and the Bearing Specialists Association (BSA), the PPIF is a single-format program designed to allow suppliers to provide accurate and up-to-date pricing and product information to distributors. It eliminates the need for companies to write special computer reports or manually enter data to handle routine product and price changes.

Based on the PTDA’s latest report, 77 manufacturers and 69 distributors have endorsed the format, and 84 percent of respondents to a recent BSA survey of members and manufacturers say they use PPIF.

Actual usage may be higher, however. NTN Bearing uses the format with its entire distribution network, which numbers more than 200 distributors. All price increases and updates from the bearing manufacturer now go out electronically.

“We format all of our price files going out to distribution based on that format. I would say that 90 percent of our distributors are utilizing that format,” says Jim Little, general manager of aftermarket sales for NTN Bearing. “The format makes it easy for us to communicate not only price updates, but superseded parts and obsoleted parts. Whatever may go on in our product line, we’re able to communicate that data in a form that’s usable for the distributor to update their systems. So it has made the transfer of information much easier.”

NTN previously sent price updates in Excel spreadsheets.

After eight years, the PPIF is clearly a valuable tool for its users, adds Dan Duffy, director of industrial sales and marketing for SKF Sealing Solutions. “The PPIF allows us to provide detailed product and price information to our distributors on nearly 14,000 items in one simplified format,” he says.

PTDA and BSA agree that as more large distributors and manufacturers begin to adopt the format, it will gain more widespread acceptance. The Fluid Power Distributors Association and the National Fluid Power Association also recently endorsed the format, which should encourage support among distributors and manufacturers in the fluid power industry.

“We’ve encouraged members to let their business partners know they’re an endorser of PPIF and want them to use the PPIF,” says Mary Sue Lyon, PTDA executive vice president.

“There is no better endorsement of PPIF than actual dollars saved,” adds Jerilyn Church, BSA executive secretary. “Use of the PPIF simplifies the whole process of creating and communicating updates, providing a bottom-line difference to those companies that implement its use.”

Robert Schwarz of Chicago Train & Transmission in Countryside, Ill., is among the growing list of independent distributors encouraging their suppliers to use PPIF instead of other communications methods.

“It’s easier for me to set up my computer to update prices,” says Schwarz. “I’m able to keep up with the newer part numbers and the obsolete part numbers. I don’t have to spend as much time updating price lists.”

He says about 15 manufacturers, 25 percent of his supplier base, currently send updates using the PPIF.

“What used to take me anywhere from two to three weeks to do, I can do now in two to three days,” Schwarz says. With price changes occurring more frequently because of the rising costs of fuel and raw materials such as steel, the standardized format is especially useful to small distributors with limited IT resources.

“Every time I turn around, we’re getting a new price increase what with all the fuel surcharges and steel price increases. Every few months another manufacturer calls me up and tells me I have to change the price,” he says.

Schwarz has told some manufacturers that he won’t actively promote their products if they don’t use the standard format. He’s even gone so far as to remove their products out of the system.

“We have increased sales with companies that use the PPIF because it’s a lot easier for our salespeople to push their products,” he says.

Cash to the bottom line
In addition to decreasing data entry time, the format enables distributors to pass along price increases to customers faster, which adds to their bottom line.

“During times when prices are going up rapidly, we can get price increases out to our customers quicker because the information is available to us from the manufacturer,” says Doug Savage of Bearing Service Inc. in Livonia, Mich.

When manufacturers send paper-based price sheets to distributors, it might take weeks to get all of that data loaded into the computer. Customers who place orders in the meantime would be invoiced at the old rate, Savage explains.

“Before you know it, we might be as much as 90 days behind. That’s a one-time turn on the inventory in some cases. The ability to implement price changes quickly might have a 1 or 2 percent affect on our bottom line,” he says.

About 25 of Bearing Service’s suppliers, representing about 80 percent of the company’s total product line, use the preferred format. The company also requires that all of its primary vendors implement PPIF. Even among manufacturers that have adopted the PTDA/BSA format, Savage says most still send updates to distributors on disk via mail or UPS. He’d like to see more suppliers give distributors online access to download price changes.

“I want my manufacturers to be competitive. If he’s providing price sheets to other distributors outside of this format, it costs him more money to do that,” Savage says.

For small distributors especially, the format helps relieve the pressure from understaffed and overburdened technology departments. One Bearing Service employee who previously spent all of her time updating prices was transferred to another job.

“Our IT department doesn’t have to write special reports for every supplier. It takes the burden off of them. They can devote their time to other projects,” says Savage.

Jeff Ramras, vice president of marketing and supply chain management for Applied Industrial Technologies, says the format helps distributors be more efficient, which ultimately benefits end-users.

“I believe that the benefits primarily fall with the distributor. That said, when suppliers use the PPIF and populate many of the fields, besides just pricing, it makes our information in our systems more robust and enables us to employ systems that make us a better supplier to our customers,” Ramras says.

This article originally appeared in the September/October 2006 issue of Progressive Distributor. Copyright 2006.

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