SALT LAKE CITY -- American Stores Co. here this week will send letters to vendors outlining standardized policies and procedures for its central procurement program launched earlier this year.
The procedures, on subjects ranging from electronic commerce to invoicing, will become effective Feb. 1.
The company said last week that the rules are intended to promote fairness and ensure a level playing field.
According to American, the procedures include the following:
The expectation that vendors are capable of electronic commerce and electronic data interchange.
A change to a standard method of calculating cash discounts, using the gross amount as the basis for invoiced items.
The requirement that vendors include American Stores in the information loop when they receive consumer inquiries about items purchased in one of American's retail operations.
Requirements concerning liability insurance, credit checks and gratuities.
The possible assessment of fines and penalties in cases of vendor noncompliance. American Stores operates 1,504 stores in 26 states -- including 656 food stores, 691 drug stores and 157 combination stores -- under the names Acme Markets, Malvern, Pa.; Jewel Food Stores, Melrose Park, Ill.; Lucky Stores, Dublin, Calif.; Jewel-Osco, Albuquerque, N.M.; and American Drug Stores (Osco and Sav-on), Oak Brook, Ill.
The company introduced a centralized buying program in May when it established American Procurement & Logistics Co. as a wholly owned subsidiary.
The procurement program was designed to transform American from a holding company into the procurement arm for its retail operations, while the logistics program allowed American to consolidate backstage administrative tasks here, including accounting and management information services, to streamline its interface with vendors.
The chain began buying liquor and tobacco through its headquarters here last spring, with dry groceries following in the summer; it is scheduled to add perishables, health and beauty care and general merchandise to the program in 1997.
American said in a news release last week it is issuing the policies and procedures document, which will require all vendors to adhere to common policies, "[to] better enable the company to achieve its strategic objectives of growth and excellence by meeting the needs of customers and providing service that exceeds their expectations.
"By streamlining and standardizing procurement and logistics administration, the company expects to reduce supply chain costs and operate more efficiently."
Bob Hermanns, chief operating officer for procurement and logistics, said the new vendor policies "represent another example of American Stores' commitment to our customers. By conducting business with vendors in a consistent and efficient manner, our cost structure is reduced and customer service is enhanced."
Daniel J. Zvonek, director of investor and public relations for American Stores, told SN that the document represents the first time American has put the procedures together in a formal fashion, although none of the procedures is new.
He said American expects to operate more efficiently once the document has been distributed. "The document is intended to bring more conformity to our procurement business and should enable us to pick up efficiencies by eliminating the need to handle exceptions or other special situations with vendors," Zvonek said.
