Military exchange shops savvy

The Army and Air Force Exchange Service is one of the world’s biggest retail
operations. “We are a monster,” said Ovidio Trevino, section chief and
supervisory computer systems analyst at the service’s headquarters in Dallas.

Boasting 8.7 million customers at military installations throughout the United States,
Europe and the Pacific, and 50,000 employees, AAFES stores earned $337 million last year
from sales of everything from home electronics to jewelry.

To streamline its transactions with more than 2,200 vendors—amounting to millions
of documents annually—AAFES tapped Connect:Mailbox electronic data interchange
software from Sterling Commerce of Irving, Texas.

Connect:Mailbox, a secure data repository that lets authorized users leave, monitor and
retrieve information, supports 17 transaction systems, such as purchase orders, price
changes and shipping orders.

“In a nutshell, Connect:Mailbox is our communication link to the outside
world,” Trevino said. “Any data that comes in or any data that goes out to
outside vendors goes through Connect:Mailbox.”

Another big plus is that Connect:Mailbox provides open communication with AAFES’
myriad trading partners. It supports many combinations of computing platforms, operating
systems, applications and network protocols, including asynchronous, bisynchronous,
Systems Network Architecture, Integrated Services Digital Network and dedicated lines
running at 56 Kbps directly to vendors.

In a typical transaction, an AAFES buyer and a vendor approve a price and delivery
schedule for a product. The buyer then loads the information into the purchase-order
system, cuts a purchase order and transmits it through Connect:Mailbox to the vendor. The
vendor starts filling the order right away and sends an invoice electronically to AAFES
through Connect:Mailbox.

The system is so efficient that it has slashed the time it takes to get products to the
shelves from weeks to days, cutting costs and increasing profits.

“Warehouse inventory balances are reduced because we get the orders to the
suppliers faster and they in turn get the goods to us faster,” he said. “Instead
of a 14- to 21-day lead time, we cut lead times down to seven days.”

In addition, the system benefits vendors because they get paid faster. The ultimate
winners are AAFES’ customers: All of the service’s profits support quality of
life programs, including morale, welfare and recreation projects.

“That’s a biggie for us,” Trevino said. “If we toot our horn about
anything, it’s to the service members. We tell them that in turn for supporting us,
going into stores and buying the merchandise, you get bowling alleys, movie theaters and
greater recreation facilities. It’s a nice circle.”

Until about two years ago, AAFES used an EDI program called Supertracks, a Sterling
predecessor to Connect: Mailbox, to handle transactions with vendors. Supertracks was
limited in its functionality and supported only bisynchronous transmissions. It also was
not year 2000-ready.

“What was really driving the bus was the Y2K issue,” Trevino said.

He and his team decided it was time to move to the next generation in EDI software. By
migrating to Connect:Mailbox, AAFES was able to both solve the date code problem and
vastly increase the usefulness of its EDI system.

Connect:Mailbox resides on IBM Corp. and Amdahl Corp. mainframes running IBM OS/390.
During beta-testing of Connect:Mailbox, AAFES technicians tried a Unix system but found it
couldn’t handle the volume, Trevino said.

“After six months and a lot of testing, we backed off and decided to stay with the
mainframe,” he said. “When we did the testing on the mainframe, it was more than

AAFES is now gearing up to do more business with vendors on the Internet once it
upgrades to the latest version of Connect:Mailbox, which offers file transfer protocol
support. “Shortly, we’re going to offer FTP links so if vendors want to do
business on the Internet, we’re not going to hold them back,” Trevino said.

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