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From The CEO

When I launched DiCentral, I wanted a service that would be scalable and versatile wanted to design an EDI service that would work for everyone -- the large retailer and the little supplier.

This month’s newsletter underscores how DiCentral helps small companies jump through amazing logistical hoops, working with suppliers on the other side of the planet.

We believe in small business. Our job is to make EDI easy and efficient. We want our customer service, our user interface, our label printing, our reporting, our billing, and our overall operation to make EDI the small business owner’s silent partner.

Our goal is to stay versatile. With the introduction of DiIntegrator, we have given the little guy the ability to handle large orders with ease.

Thuy Mai, CEO

August 2005 Newsletter

Reprinted from the Wall Street Journal

Shoemaker Scales Great Wall of China With Help from Versatile DiCentral Service

Whether our customers are warehouses, trucking companies, ocean freighter companies, factors, banks, overseas manufacturing partners, suppliers, or retailers, DiCentral helps its customers meet the data requirements of the groups they work with.

Mia Abbruzzese, founder of Morgan & Milo, uses DiCentral to communicate with DMS Logistics, her third party warehouse in New Jersey. DMS stores her goods that ship to Abbruzzese’s EDI clients – Nordstrom and Parisian. DMS uses DiCentral services to track Morgan & Milo's inventory from Asia. DiCentral also allows DMS to build the ASN with carton label information.

The following article, reprinted from the May 9, 2005 Wall Street Journal, is a story of one woman’s success made possible in part because of DiCentral.

Mia Abbruzzese had to grit her teeth as she toured a Chinese factory to talk about production of her children's shoe line. Barely into the season, the factory was already copying her line of sneakers and sending them to Taiwan under a different label.

“I said, 'OK, they've already knocked them off,'” she recalls. “I put blinders on.” she says, since she had other things to worry about.

It's been part of her education as a fledgling children's shoe maker in a land where business runs on a handshake and not everyone plays by American rules.

Ms. Abbruzzese, who ran cross country in high school in Boston and earned a degree in economics, did a stint in finance but found herself working for a variety of athletic and children's shoe manufacturers for 17 years, including New Balance, Fila and Stride Rite.

During those years, U.S. goods makers were moving production to Asia to take advantage of the low costs. She made a point of learning every facet of the business --product development, marketing, manufacturing-- as she went from job to job, traveling the globe.

“It was absolutely fascinating,” she says, recalling, for instance, how she presented lines of boots to the Singapore military for New Balance. As for China, in those years, she says, “it was just a bunch of factories and dirt roads.” Few women in business traveled there.

A pivotal assignment came at Stride Rite, where she worked on special lines, called Baby Smart and Kid Smart, to be sold exclusively at Target stores. The lines were a success, and by then, she had been at Stride Rite for several years. Ms. Abbruzzese recalls thinking to herself, “If I can do this for Target, what's to say that I can't do it for myself?” She struck a deal to leave with six months of severance pay to attempt to launch her own line.

Ms. Abbruzzese doesn't have children, so she kicked around her ideas with hersiblings and tried prototypes of her designs on her nieces. She envisioned the same market niche that Target has mined so well: inspired design at a midmarket price. She admired some European designs, not cutesy, but stylish and fun, and able to withstand a day of hard play. She called her concept Morgan & Milo, and she began sketching out designs and brochures.

She went back to her contacts in China, looking for factories that might want to take a chance on a new U.S. brand, including providing some upfront investment. Through an agent she knew from her travels, she found a shoe- component maker that wanted to begin producing complete shoes. The manufac- turer invested the initial costs as a loan, payable, Ms. Abbruzzese says, over several years. No contracts, just a handshake. “It's based on trust there,” she says.

She hired free-lance designers to sketch out her designs. Her agent oversaw the prototype production in China and sent the plain white leather prototypes for her review in Boston, with details and color to be addressed later. Ms. Abbruzzese traveled to the factories herself for the start of the production run to closely monitor quality. The first year's run in 2004 was about 65,000 pairs of shoes, a tiny first step for her brand, and about $800,000 in sales.

Her adventure hasn't been without bumps, however. Ms. Abbruzzese says she disagreed with her first sales representative, who was happy to sell the shoes anywhere without regard to the image of her brand. Soon, she replaced him with Mark McCormick, a veteran of the Keds shoe brand, who will take a 5% equity stake over five years on top of his salary. “He's realigned our customer base, who we want to go after,” she says, primarily upscale retailers.

What's more, the line is too small to warrant a full-time factory. And she requires two separate facilities, one for sneakers and one for dressier shoes. Ms. Abbruzzese says she would love to see fatter profit margins, but she's hardly in a position to negotiate forcefully about costs. “When you are small, you can't argue too much,” she says. “You're grateful to have a product.”

She had hoped to double the production run for the 2005 season, but managed to produce about 40% more. Profit margins weren't quite as thin, she says, and the line is in some Nordstrom and Macy department stores as well as some independent chains. She also scored a small coup in getting Morgan & Milo on the Zappos.com Web site for next fall.

Ms. Abbruzzese counts off her many responsibilities, and stops to laugh. “Had I known what I was getting into...,” she says.

Indeed, she has been busy planning a trip for later this month to China's Guangdong province to oversee proto- types for the 2006 line.

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EDI Helps Dallas Company Maintain Its Business Model

For Alliance Style Group, EDI is not an option – it’s a requirement – for doing business.

“EDI is required by all large companies, and we want to sell to them,” says Alliance MIS Director John Baccellieri, adding that EDI helps his company stay competitive. Alliance Style Group uses EDI for both sides of its business: manufacturing and wholesale.

Alliance produces bedding, pillows, and other soft goods as part of its product line, and the company also works with a large number of suppliers who serve major outlet stores.

The retailer gets ASNs from us informing the retailer that they’re about to receive the goods. This is all conventional EDI using DiCentral. We invoice immediately after shipment using EDI for those customers set up to receive invoices electronically.

In all cases we simultaneously send copies of those invoices to our factor, resulting in immediate cash availability.”

But the wholesale side of his business is more complex and requires more of DiCentral’s EDI service.

“Retailers send us a purchase order conventionally, which we immediately enter into our ERP system and into DICentral’s DIReports application”, says Baccellieri. “We use DIReports to help us pull data to write purchase orders to our suppliers and for creating the labelswhich we then distribute via the web to our suppliers for fulfillment. Finally, the supplier sends us proof-of-shipment, which we use to send ASNs to the retailer notifying them of the shipment to come.” Without DiCentral’s service, Baccellieri’s company would have had to change its business model. “In the past, we had lots of time to respond to a purchase order, but today we have only one or two days to perform all of our logistics operations,” says Baccellieri. “Using DICentral’s web and PC based tools we are able to meet the new timeframes and we’ve been able to eliminate a parttime data entry position”.