ATLANTA - A year-long group of pilots with four retailers and four direct-store-delivery vendors has demonstrated the ability of price synchronization to reduce invoice discrepancies, while contributing to the creation of a price standard later this year.
The pilots have shown that synchronizing price data between retailers and manufacturers "ensures that the supply chain runs more efficiently and that invoice and payment processes operate more smoothly," said Ann Dozier, vice president of business development for Coca-Cola Customer Business Solutions. This year, Coca-Cola, one of the vendors in the pilots, plans to test using item and price synchronization to eliminate invoices altogether, she added.
Another finding from the pilots is that item and price synchronization requires a willingness to "modify your business processes to support automation," Dozier said.
While many retailers and manufacturers have been exchanging and synchronizing standardized item-level data such as product dimensions through the Global Data Synchronization Network for more than a year, pricing data has thus far been left out of the process as the industry awaits pricing standards.
Most observers believe that standardized price synchronization will have a far greater impact than item synchronization. "The benefit to data synchronization for [Coca-Cola] is primarily related to price synchronization," said Dozier, adding that item synchronization is a necessary precursor.
Pricing standards are being developed by the GS1 Global Data Synchronization Relationship Dependent Data Committee, of which Coca-Cola's Dozier is a member. "We will have a draft price standard in the May timeframe," she said. That will be followed by pilots and modifications to the standard, and by data pool certification in the first quarter of 2007. The standard will then be available to the industry.
Because of the long wait for price standards, some distributors remain skeptical. "I keep hearing about price standards, but when you get 10 retailers in a room, you get 10 different ways of going about it," said Corby Bleckert, category manager, special projects, Associated Food Stores, Salt Lake City.
But others are preparing for the day when price standards will be a reality. "We are getting our global location number process up and running so we'll be prepared to handle regional pricing," said Greg Vick, director, distribution systems and web development, Unified Western Grocers, Commerce, Calif.
Meanwhile, the price pilots, organized by 1SYNC, Lawrenceville, N.J., have been running for a year. They include a top retailer from each of four channels: grocery, drug, mass merchant and club. The retailers began synchronizing price data with one member of the 1SYNC group - Coca-Cola, Cadbury America, Kraft or PepsiCo - and subsequently applied the same process separately with the other members, Dozier said. 1SYNC has been the participating data pool in the pilots.
The pilots leveraged the process design work of the Global Commerce Initiative DSD price committee, co-chaired by Dozier and Steve Benson of Minneapolis-based Target. "Being able to offer a single solution for data sync across DSD companies is a tremendous value to our retailers and a key driver of expediting data sync implementations," Dozier said.
The DSD price committee is now "trying to take our learning and incorporate it into the standards development process to develop a standard anybody can use," Dozier said. "It's easier to develop standards when companies have had experience with synchronization." Once a standard is in place, the process used in the 1SYNC pilots will be modified to meet the standard.
Dozier said that the GS1 Global Data Synchronization Relationship Dependent Data Committee would like participation from more retailers and manufacturers globally, including warehouse and DSD manufacturers.
In North America, Coca-Cola's pricing is the responsibility of approximately 70 bottlers that distribute the company's products. For the pilots, Coca-Cola Customer Business Solutions uses 1SYNC to collect pricing information from the bottlers and transmit it to the retailer. The information is provided at the store level, Dozier said.
Dozier acknowledged that pricing is by its nature a more complex data capability than basic item data. Moreover, while item data reside in a retailer's headquarters, price may be earmarked for stores or regions. Finally, manufacturers must ensure the confidentiality and security of each retailer's pricing arrangement. For these reasons, she noted, price has taken much longer to standardize for the GDSN.
