A recently completed four-month pilot program has set the stage for industrywide implementation of standardized synchronization of price data between retailers and manufacturers, the long-awaited follow-up to synchronization of basic product information.
The pilot, conducted under the auspices of the Global Data Synchronization Network (GDSN), a division of GS1, Brussels, included 11 retailers, 10 suppliers and eight data pools or GS1 member organizations.
Among the participating retailers were Supervalu, Ahold, Piggly Wiggly and AAFES. Participating suppliers included PepsiCo, Coca-Cola, Dean Foods, Procter & Gamble and MasterFoods. More than 130 use cases and business scenarios were tested.
Price synchronization enables retailers and manufacturers to be in harmony on both established and promotional prices, eliminating invoicing errors and other inefficiencies.
The pilot was completed this month, and will be followed up by some changes to the price synchronization implementation guide developed last year, as well as by requests for new business requirements, according to Gina Tomassi, senior manager, customer supply chain and logistics, PepsiCo, Purchase, N.Y.
Data pools — the representatives of retailers and manufacturers that facilitate data exchange — will now seek certification to handle pricing data. The price standard will then be available for companies to use in the GDSN beginning in mid-June.
“Retailers and suppliers in Australia have said that as soon as this is live, they will be in production,” said Tomassi during a session last month at the Grocery Manufacturers Association/Food Products Association Information Systems & Logistics Distribution (IS/LD) Conference in Orlando, Fla.
However, that may be the exception, said Greg Zwanziger, director, e-commerce, Supervalu, Minneapolis, who participated in the IS/LD session with Tomassi. “A lot of trading partners are using this as a learning experience,” he noted. “Once the [data pool] certification is complete, a lot of us will go back and finish the work to make [price] production-ready.” Supervalu is already one of the leading food distributors in implementing item synchronization.
Supervalu, Zwanziger said, “is evaluating what are the changes necessary to take [pricing] data into our systems.” The biggest challenge, he added, is being able to generate a confirmation that Supervalu has in fact received the data.
For price synchronization to be truly successful, retailers and manufacturers need to use the computer-to-computer process to “eliminate the paperwork,” Zwanziger said. “Can you get away from the signed document?”
Still, price synchronization is a process that industry observers have long believed would favorably impact the supply chain by helping to reduce invoice discrepancies, improve order accuracy, streamline the check-in process, and execute promotional events and new-item set-up.
“When you talk about item synchronization, people sometimes understand the benefit, but nobody gets real excited about it,” Zwanziger said. “But when you start talking about price synchronization, people start thinking huge benefits — something they can really take to the bank.”
Up until now, retailers and manufacturers have been employing a number of customized “one-off [price] solutions,” Zwanziger said. “There wasn't a lot of efficiency because we were not building off something that suppliers can leverage across a large retailer base and vice versa.”
The new price standard includes a wide range of pricing options, including targeted promotion and allowance activity, bracket prices, line item and invoice-level components. Security has been emphasized “so that we feel comfortable sending confidential information like pricing,” Zwanziger said.