TRADING PARTNERS TAKE TO THE WEB

When it comes to real-time sharing of data, retailers and their trading partners are turning to the Web for fast, efficient and inexpensive communication.Retailers, wholesalers and manufacturers can meet the ever changing needs of their customers by exchanging up-to-the-minute information, such as inventory movement and sales data, using secure Internet sites.The Internet also gives trading partners

When it comes to real-time sharing of data, retailers and their trading partners are turning to the Web for fast, efficient and inexpensive communication.

Retailers, wholesalers and manufacturers can meet the ever changing needs of their customers by exchanging up-to-the-minute information, such as inventory movement and sales data, using secure Internet sites.

The Internet also gives trading partners an electronic forum for sharing forecasting information, planning promotions and measuring their effectiveness.

Certified Grocers of California, Los Angeles, for example, is currently installing a third-party electronic-commerce system that will allow the wholesaler to build an electronic data catalog.

The catalog is aimed at improving price authorization and item synchronization, as well as sharing promotion information with suppliers throughout its supply chain.

"Item and price information are foundational elements for all electronic commerce transactions, and synchronizing this complex information has been an industry objective for many years," said Jack Scott, chief information officer and vice president of MIS for Certified.

The system allows suppliers to access data using a variety of methods, including a Web browser or EDI, according to a source familiar with the situation.

"We're leveraging the value of our legacy systems without having to re-engineer," Scott said. "[The catalog] provides a single interface, which is a dramatic departure [from past practice]."

"Although we have electronic catalogs, this [system is] more interactive, and complements [Certified's current] interactive order system," Scott said.

By eliminating of a lot of the paper that passes between trading partners and reducing error rates, the system could produce a significant operating cost savings and improve efficiency throughout the supply chain.

"By establishing a single, shared item and price database with our key suppliers and eliminating inefficient manual processes, Certified will realize improved transaction accuracy," according to Scott.

The initial implementation will focus on 200 trading partners with the ability to communicate item data for about 60,000 stockkeeping units.

The system should be fully operational within the next few months, according to the wholesaler.

The data catalog not only offers an item price synchronization solution, it also provides all members of the supply chain with inexpensive and easy access to vital business data, the wholesaler said.

Although the current data catalog addresses synchronizing the item information between Certified and its suppliers, eventually it could also be tied in with the retailers, completing the supply-chain circle.

"We expect to be taking the electronic item catalog to our retailers around October or November," Scott told SN.

Oklahoma City wholesaler Fleming Cos. recently revamped its extranet to allow retailers and vendors real-time access to special pricing opportunities and item information on-line, as well as to provide communication between stores.

According to one supplier in Fleming's program, Kraft, Glenview, Ill., their having this real-time business data is beneficial on many levels.

"The ability to see our data on-line and see our inventory will certainly help us to better manage our business, as well as learn more about the customer," said Jan Macy, sales information specialist for Kraft.

Fleming provides retailers with free access to the on-line order-management system. In addition to product price information, vendors are able to post bulletins out on products and on the system and can offer special pricing to promote products.

"If we have a big ad breaking with a retail group, our teams can look at the system and see how the product is doing," Macy told SN.

The manufacturer has been a participant in Fleming's program for about two years.

"It's evolving well, and the program has become more user friendly. I think Fleming is out front on this," Macy said.

One supermarket-industry expert said that information sharing at the item level should also lend itself to scaling up business processes like collaborative planning, forecasting and replenishment, which have seen sales increases and dollar savings in small-scale pilots.

Glenn Hershey, a principal with Kurt Salmon Associates, Princeton, N.J., said he believes that with most companies on-line, there is potential for a complete change in the supply-chain model.

"The whole barrier to entry is dropping," he said, adding, "You don't have the big [investment in technology required]."

With the increased used of massive databases that can send and receive information in real-time, the cost of sharing information becomes negligible, according to industry observers.

"You log onto the Internet and pull down [information] off the server," according to Hershey.

"Some of the [benefits] we're seeing early on I would classify under administrative benefits," Hershey told SN.

Some of these administrative benefits may come in the form of product information, tracking promotional dates and product numbering.

Sharing information through the Internet allows the trading partners to stay in sync, reduces error rates, and cleans up invoice exceptions and deductions, he added.

Information sharing via the Web provides the capability to react to exceptions and issues of whether a particular item at a particular location is overstocked or out-of-stock.

"Getting quick visibility provides a heck of a lot of value," Hershey said, adding, "We're just starting to see that."

"By having the visibility for promotional items, we can balance out promotions geographically and the manufacturers can smooth out production and get [product] where it's needed," he told SN.

The third area of benefit that is not happening yet, but will be interesting, is a move to a more efficient and dynamic marketplace, Hershey told SN.

The real regimented and structured deals and environment could move more to a bid-based and very dynamic market place, making it much more competitive, according to Hershey.

"It's a carefully structured, secure environment. You're sharing it because there is a reason to do so. You share it because you figured out there is a business reason and there is a corresponding benefit for both [trading partners]," he added.