A MANAGER TAKES CHARGE Toys "R" Us EDI System Rescued Toys "R" Us is a leading retailer of toys and baby products worldwide. The company sells merchandise through its stores and its Internet site. Toys "R" Us operated as a public com- pany from 1978 until July 2005, when a private investment group acquired the company for 86.6 billion. Tim Meester came to Toys "R" Us in 2003, as the director of vendor partnerships. His primary responsibility was to develop compliance and supply-chain performance programs. Before he could start any new initiatives, however, he saw a need for signifi- cant improvements in the accounts payable and electronic data interchange (EDI) groups. A recently implemented EDI system was ereating problems in payment processes and information flows between the company and its vendors. Meester and his team learned that errors in EDI data exchanged between the company and its vendors was making it diffi- cult for the vendors to get paid. The errors also were creating extra work and inefficien- cies both for Toys "R" Us and its suppliers. "We had to clean our own house before we could even address vendor perfor- mance," Meester said. "We estimated that 60 to 80 percent of the issues came from a lack of internal consisteney and discipline, so we worked together with our vendors and inter- nal partners to understand the process issues, identify gaps, and ensure that processes were integrated, product kept flowing, and vendors were paid accurately and on time."2 Perhaps the biggest challenge was to change the Toys "R" Us culture and make employees realize that less than 100 percent accuracy was unacceptable. Resolving the accuracy problems required cleaning up the data that Toys "R" Us transmitted to its vendors and the information they sent back. Meester and his team had to learn the detailed technical aspects of the EDI system and the business needs it was intended to address. Then the team had to develop corrective actions, address recurring problems both at Toys "R" Us and the vendor sites, and provide consistent advice to each vendor. To aid in this process, Toys "R" Us implemented an extranet to link itself with all 1300 of its vendors. The extranet enabled the company to share information, identify problems with the EDI system, and resolve them.24 Discussion Questions 1. What essential complements and managerial actions were missed during the ini- tial implementation of the EDI system? Why do you think they were missed? Was there really any negative impact from the initial "poor implementation" of this system? After all, Toys "R" Us was able to correet the situation. 3. How do you think Meester got employees to improve the accuracy of EDI data? 2.