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'RE-ENGINEERING' ISN'T WRIGHT

MINNEAPOLIS -- Supervalu is no laggard when it comes to efficiency initiatives, but its top executive takes a contrary view about some of the industry's efforts.Unlike some other wholesale executives, Michael W. Wright, chairman, president and chief executive officer, doesn't focus on re-engineering and massive overhauls of business processes."I don't even know if I like the term 're-engineering,'

MINNEAPOLIS -- Supervalu is no laggard when it comes to efficiency initiatives, but its top executive takes a contrary view about some of the industry's efforts.

Unlike some other wholesale executives, Michael W. Wright, chairman, president and chief executive officer, doesn't focus on re-engineering and massive overhauls of business processes.

"I don't even know if I like the term 're-engineering,' " Wright explained. "Re-engineering is a term that implies massive layoffs and massive restructuring, and that's not the way we see things happening. "I think we are continuing to evaluate how we do business, and that's been an ongoing process. We see an evolution and some changes coming about in the industry. But I wouldn't call it a re-engineering. It's a part of the natural evolution process." Another evolutionary change concerns the Efficient Consumer Response initiative's call for streamlining the deal and promotional structure. Here, too, Wright won't provide his unqualified endorsement and doesn't foresee a total elimination of that method of business.

"We still believe that promotions and off-invoices and such things will be a major part of the industry because those people who are not No. 1 in market share will continue to use these as ways of promoting their products. We and others, including retailers, will be there to support them."

Wright blames manufacturers for creating the forward-buying cycle, and claims that they have been the beneficiaries. "It hasn't really enhanced our profitability," he stated. "Manufacturers, on the other hand, during the 1980s enjoyed their greatest decade ever. So were all these practices inefficient? Well, maybe. But manufacturers didn't complain then, did they? The rules were set up by them. Now, as times get tougher and they don't have the flexibility to increase prices every six months, they're looking for ways of cutting out expenses."

What's needed is for manufacturers to re-evaluate their relationships with wholesalers now that ECR's cost-cutting regimen is becoming a reality, Wright insisted. "There was to be a sharing of these savings, and a lot of them ignored that. They need to focus on the services provided by distributors and work with us so there is an evolution of this."

But none of this will threaten Supervalu's future, said Wright. He contended that Supervalu is poised to benefit from ECR in a big way.

"We've got the size and capacity to be able to do these things very well," he said. "And the total vision of ECR plays into the hands of the most efficient operators who can afford to stay on top of massive technology changes. And we're positioned beautifully for that."

TAGS: Supervalu