HONOLULU — Foodland Super Market here, which operates 30 Foodland and Sack N Save stores, is successfully synchronizing price and promotional data with Coca-Cola bottlers serving the Hawaiian islands, as well as with four other suppliers.
While synchronization of basic item data between trading partners has become increasingly common via the Global Data Synchronization Network (GDSN), a division of GS1, Brussels, price synchronization is still relatively rare in the food industry.
To facilitate more price synchronization, GS1 last year approved a standard for synchronizing price data, which is ready to be deployed via GDSN-certfied pools. Foodland is deploying a non-GDSN method — the Price & Promotion Management (PM) solution, from 1SYNC, Princeton, N.J. — that is similar to the price standard, and the chain is reaping some of the same benefits promised by the standard.
“In addition to the relative ease of implementation, one of the key benefits of 1SYNC's solution has been the significant reduction in invoice discrepancies,” said Ryan A. Yonamine, Foodland's program director for data synchronization, in a statement. “This reduction in errors has provided cost and time savings not just for Foodland, but for all of the supply chain partners involved.”
Yonamine explained to SN that the reduction of invoice discrepancies helps prevent delays in receiving direct-store-delivery (DSD) products such as soft drinks from Coca-Cola. “We want to validate that the invoice at the back door [of stores] is the same as what's in our host system,” he said. “When there are no discrepancies, the result is faster check-in and faster time to market.”
The system also improves “data integrity” and saves time by no longer requiring participating vendors to manually update prices, said Yonamine. “By improving data integrity, we eliminate the work involved in fixing data errors, allowing our buyers to focus on value-added activities. This is one of the big wins of the data synchronization project.”
Yonamine declined to specify the cost of the system.
Foodland implemented the price synchronization system last year and has been using it for about 10 months. Unlike many retailers, the chain opted to implement price synchronization first rather than item synchronization. “We thought we could gain the most benefits from price synchronization because of the frequency of changes that take place with prices,” said Yonamine. But Foodland is now considering item synchronization as well, he added.
The data that Foodland receives through the system includes base and promotional prices by price zone, effective date of prices and end dates of promotional prices, as well as UPC number, case pack and other item information. Price information is received at headquarters and is distributed to individual stores by price zone. Yonamine said the data is encrypted to ensure security.
The biggest challenge for Foodland in implementing price synchronization was ensuring that none of its existing data was “incorrect or had anomalies,” Yonamine said. “We audited our data for accuracy before we rolled out [the system]. It's a time-consuming task.”
Over the next year, Foodland plans to synchronize price information with additional trading partners. Yonamine said that Foodland is interested in the new price synchronization standard, but needs to understand it better before a decision would be made to transition to it.
For its part, Coca-Cola's implementation of the PM solution with Foodland “has provided improved price-submission processes and reduced manual activities leading to the reduction of invoice discrepancies,” said a spokesman for Coca-Cola Enterprises, Atlanta. Coca-Cola is represented in Hawaii by Coca-Cola Enterprises, its bottler and distributor, and by Maui Soda Ice Works.
SIMILAR TO STANDARD
1SYNC has offered the PM solution for about five years, dating back to when it was offered by Transora, which merged with UCCnet to form 1SYNC in 2005. While not the same as the GDSN price standard, the PM system is ‘very similar to what came out of the GDSN price standard last year,” said Bob Noe, chief executive officer, 1SYNC. The PM solution is geared toward DSD suppliers like Coca-Cola, but is not restricted to them, according to Noe. 1SYNC also supports the GDSN price synchronization standard.
1SYNC, as a data pool for both Coca-Cola and Foodland, handles the price synchronization between them, but Foodland could also synchronize price data with manufacturers using another data pool via an “out-of-network” connection, said Noe.
Noe said less than 10 retailers and manufacturers are synchronizing price data via the PM solution today, but numerous others are “ramping up to do it.” He said that no trading partners are currently synchronizing price data through the GDSN standard model via the 1SYNC data pool.
“My assumption is a lot of companies are planning behind the scenes how to handle standard price synchronization,” said Noe. “The standard should be the way we move forward. With the standard, everybody is playing at the same level and doing it faster.”
Coca-Cola “recognizes the value of utilizing the new GDSN price standard,” said the spokesman. The beverage giant is “working toward” supporting implementations as retailers “become ready to receive pricing using this new standard.”
Like 1SYNC, another major data pool, SA2 Worldsync, whose North American office is in Alexandria, Va., has no retail or supplier customer actively implementing the GDSN price synchronization standard, said Nihat Arkan, managing director, in an email communication. One European retailer, he added, has committed to implementing GDSN price sync “sometime in Q3 2008,” and others have shown interest in the last few months. SA2 Worldsync, a joint venture of Agentrics, GS1 Germany and Pironet NDH, also offers offer proprietary price synchronization, but overall adoption is very low.
“We believe adoption of price synchronization as part of GDSN messaging would be more difficult for retailers than suppliers, because price information is one of the most sensitive business-related data for retailers,” Arkan said. “Therefore, exchanging such important data in GDSN would bring serious system security and reliability questions. Even if the system, as we have in SA2, is extremely reliable and secure, retailers would need to pass the emotional hurdle of passing this data to third parties.”
In addition, he said, some retailers feel that the GDSN price sync standard is “very complex and requires serious efforts within their company, as well as on their trading partners' side; hence, they did not prioritize it for this year.”
Last year, Greg Zwanziger, director of ecommerce at Supervalu, said Supervalu was evaluating the changes necessary to take pricing data into its systems.