Portal Power

Portal Power

Retailers and manufacturers are trying several new technologies to form electronic connections to each other, including data synchronization and RFID. But for some retailers, a more mature technology, the Web-based vendor extranet, or portal, remains the communication vehicle of choice. Portals have proved themselves to be versatile instruments, allowing suppliers to get new products to market in

Retailers and manufacturers are trying several new technologies to form electronic connections to each other, including data synchronization and RFID. But for some retailers, a more mature technology, the Web-based vendor extranet, or portal, remains the communication vehicle of choice.

Portals have proved themselves to be versatile instruments, allowing suppliers to get new products to market in the quickest time possible and to “see” products at any point in the supply chain, minimizing out-of stocks.

“It's a community-building relationship tool that lets both sides more effectively communicate key business data quickly and efficiently,” said Patrick Walsh, vice president of industry and trade development for the Food Marketing Institute, Arlington, Va.

Other benefits, sources said, include increased warehouse and store-level inventory turns; enhanced food safety operations; swift transfer of products from store to store; and better replenishment and forecast planning with suppliers.

Portals are catching on across a broad range of retailers. “It used to be just the highest-volume companies doing this, but now leading regional chains are also developing portal/extranets and/or licensing portal content applications,” said Jim Hertel, a partner in the Barrington, Ill.-based consultant Willard Bishop. “It's become a competitive necessity in the sense that retailers are now competing with each other for supplier resources.”

Some portals, such as Wal-Mart's Retail Link — the granddaddy of retail portals — and Target's Partners Online, are “extensible,” said Lora Cecere, a research director for Boston-based AMR Research. This means data can not only be viewed by suppliers and other partners outside the company, but can be imported into the outside partners' systems and used by them to make business decisions.

Having an extensible vendor portal/extranet, said Cecere, can, among other things, significantly decrease the amount of time it takes for store-level point-of-sale data to reach suppliers. “Instead of waiting two weeks, suppliers can see what's being pulled from the store daily and respond immediately to the replenishment needs of the shelf,” she noted.

Portals can also be used to support data synchronization, though some retailers believe portals will ultimately be replaced in part or completely by data synchronization,


Commerce, Calif.-based Unified Grocers built both a retailer extranet called Memberlink and a vendor portal four years ago. The two work hand in hand in communicating information throughout Unified's supply chain, said Greg Vick, Unified's executive director of supply chain and ecommerce systems.

Unified's first Web-based content application for its vendor extranet was a New Item Setup application, which allows suppliers that are not using the Global Data Synchronization Network (GDSN) to add new items, via the Internet, to Unified's product mix.

Unified then developed a Speed-to-Shelf Web-based application to reduce the time it takes to bring new products to the retail shelf. Its Speed-to-Shelf application also provides key merchandising information that helps the hundreds of Unified's retail customers who are using Memberlink to make appropriate purchasing decisions.

All the vendors authorized to log into Unified's vendor portal can put their new product data into the Speed-to-Shelf program, and each of Unified's retail customers can search for new items and immediately see such data as the item name, description, pack and size, as well as price, advertising and other key merchandising information.

“It's critical information that the store really needs to make a decision on whether to carry a new item,” Vick said.

Next, Unified developed a Cost and Promotions application that allows suppliers in real time to communicate cost and promotional information to Unified's procurement department, a feature that is not yet mainstream in the GDSN data synchronization network. (It is expected to be a standard data sync procedure sometime this year.) Those promotions are visible to Unified's retailers through a search engine within Memberlink.

Earlier this year, Unified developed and launched a sixth Web-based vender application, Hot Deals, which Vick describes as “an innovative program that allows us to give our retailers unique access to special first-come, first-served deals such as close-outs and spot buys.”

Unified has over 1,400 suppliers and several hundred brokers on its vendor extranet and is adding more vendors at the rate of about 20 to 30 a month, said Vick.

Currently, more than 150 multi-unit supermarket operators, some with as many as 50-plus stores, and more than 200 single-unit operators use Memberlink programs. That means more than 50% of Unified's retail customers currently are taking advantage of its extranet.

Vick noted that while it is absolutely necessary today to be able to synchronize data as the “foundation” for a portal, applications like Cost and Promotions will deliver the real savings.

“You set up an item once for data sync, but you set up costs and promotions for the rest of that item's existence,” said Vick. “So, costs and promotions are where you have quite a bit of accounting work as well as too many discrepancies in the manual processes of keying in this information. There's quite a bit of expense and we're anxious to reduce that.”


Another major vendor portal is supported by Supervalu, Minneapolis. The retailer/wholesaler has streamlined many of its business processes by communicating via the Web with its retail customers, suppliers, brokers and carriers through its extranet, SVHarbor.

“The process of sharing data is much more efficient, the data is more reliable, and significant redundant data entry has been eliminated,” said Greg Zwanziger, director of ecommerce, supply chain services for Supervalu.

SVHarbor, said Zwanziger, “facilitates the creation of best practices with suppliers of all sizes and technical sophistication. Our suppliers have successfully leveraged its sales-driving capabilities to collaborate with Supervalu and our retailer customers.”

These applications, said Zwanziger, address everything from promotion management to dock scheduling. For example, the eCategory Management application facilitates the development and sharing of planograms, as well as sharing sales data, and facilitates the auto-distribution of new items.

The eMerchandising application provides tools for retailers to view and download real-time information related to promotional funds, order management, item information, inventory management, warehouse withdrawal history, weekly ads and event surveys.

“SVHarbor eliminates a number of inefficiencies and creates opportunities for collaboration that paper and manual processes often make cost-prohibitive,” said Zwanziger.

Other retailers, said AMR's Cecere, including Giant Eagle, Safeway and Kroger, have vendor portal applications in which retailers and suppliers collaborate on the details of promotions: when the promotion will start, what volume and product characteristics it will have, and when it will end.

That is not the same as Collaborative Planning, Forecasting and Replenishment, which is a way of sharing future forecasts, said Cecere. Retailers like Wal-Mart, Target, Home Depot and Lowe's are handling CPFR on their extranets.

Other retailers are exploring the portal arena. For example, Lakeland, Fla.-based Publix has been working on a vendor portal for two years, but spokeswoman Maria Brous said it is still in the “infant stages” of portal development.

“We know what we would like it to be,” said Brous. “Not only a secure portal where vendors could access product information, but also information like sell rates, fulfillment rates and scan data that would be pertinent to them as a Publix vendor and that would help them collaborate and plan strategically with us to grow the business.”

Publix, like many chains, currently has a vendor performance scorecard program and that will probably be the first application to go live on its portal. In the future, as Publix develops an electronic CPFR application, said Brous, “the better vendors do on their scorecard, the more information we'll release to them, so the scorecard also becomes a performance incentive.”

A launch date for the portal has not been established, said Brous, “but it is part of our business plan and our IT department is working on it.”

AMR's Cecere said that it is relatively easy to get a return on investment from a portal implementation if it's handled correctly. “If a retailer just looks at the four walls of their operations, they will have a hard time getting an ROI,” she said. “But if they look at total system inventories and the ability to work collaboratively with suppliers, with both parties reducing waste in the supply chain, they will get a quicker ROI, and I mean in a matter of months or a few years, depending on the size of the enterprise.”

The Third-Party Route

Though many retailers develop their own portals, some, such as Walgreens and CVS, are working with a third-party provider of portal applications. In their case, that provider is Alexandria, Va.-based Agentrics, a supplier of Web-based services to over 50 retailers and thousands of their suppliers.

Essentially, Agentrics allows data collected from multiple vendor and retail sources to be harmonized so it can be shared through one network, said Lora Cecere, a research director for Boston-based AMR Research.

For small to midsize retailers, and even for some larger volume retailers, it often makes sense to use a third-party provider of community networking services and/or communicate through an electronic data interchange (EDI), Cecere said.

Walgreens, Deerfield, Ill., built its Internet supplier portal 10 years ago, and added Agentrics' functions to it, according to Walgreens spokeswoman Carol Hively. “It's working very well at its goal of providing communication to our supplier community on how to do business with Walgreens.”

Almost all Walgreens' suppliers use the site to obtain various types of data and information including point of sale data, as well as “our policies, procedures, vendor performance information, and so on,” said Hively,

Having one place for suppliers to go to obtain business-critical information, and in some cases, perform business-critical tasks, is one of the biggest benefits of having a portal and Web-based applications to run on it, said Hively. “It's also helped to lower carrying costs, increase turns, allowed us be first to market with new items, and raised profits through enhanced operational efficiencies.”

CVS, Woonsocket, R.I., is doing Web-based consumer demand management, giving its suppliers visibility into where their products are in CVS' supply chain.

If some products are not selling through in certain CVS stores but are running out in other stores, CVS and its suppliers have the ability to transfer products from low-demand to high-demand stores, enhancing sell-throughs and avoiding the need for CVS to take markdowns on unsold product.
— L.P.