WEST BRIDGEWATER, Mass. -- Shaw's Supermarkets here has begun urging all of its suppliers to adopt not only data synchronization service UCCnet but also a U.K.-based UCCnet partner called UDEX that enhances the UCCnet process with data "normalization."
Shaw's, which has been in production with UCCnet for a year and is one of 12 food distributors subscribing to the service, became the first U.S. retailer to test UDEX in July, receiving UDEX-normalized data from four private-label distributors, Carriage House, Knouse Foods Cooperative, Maui Pineapple and Sturm Foods.
"We sent out a letter a few weeks ago to all of our suppliers saying that by the first of the year we expect them to adopt both UDEX and UCCnet," said Jim Sheehan, Shaw's strategic process leader. "We highly recommend that they embrace both." Earlier this year, Shaw's issued a similar missive urging just UCCnet adoption. "We want everybody to be electronic; paper has to go away," he said.
UCCnet's value proposition to food distributors and suppliers is that by creating a single standardized global registry of product data to which they can all contribute and subscribe, trading partners would reduce the invoice errors that can lead to costly and sometimes controversial deductions.
UDEX promises to enhance UCCnet's value by ensuring that all product descriptions, as well as spellings, abbreviations and the like, are uniform. UDEX enables suppliers to post new products and make change via the UDEX database. Both UCCnet and UDEX enable XML-based machine-to-machine communication, eliminating re-keying of information. UCCnet uses the UDEX categorization scheme but does not require subscribers to use the UDEX normalization scheme, said Jennifer Roberts, UCCnet public relations manager.
Shaw's currently has a "free-form" product description field that allows buyers "to make up any description they want," said Sheehan. "Well, that's a real problem."
UCCnet cited a study by A.T. Kearney noting that 30% of items in retail catalogs have data errors, which cost between $60 and $80 each and consume 25 minutes of manual cleansing per stockkeeping unit. "The amount of data inaccuracies out there is mind-boggling," said Sheehan. "We're only scratching the surface today, but if we get this to work, we'll solve a lot of problems."
UCCnet, a division of the non-profit Uniform Code Council (both are based in Lawrenceville, N.J.) had 204 subscribers as of Oct. 2, including 192 manufacturers and 12 food distributors, and added another manufacturer (Georgia Pacific) last week. Of these, 26 trading partners are in production, with more than 30 in certification testing, said UCCnet, which has been aggressively promoting the service this year.
For-profit UDEX (which stands for Universal Descriptor Exchange) is based in Newport, Gwent, U.K., with U.S. headquarters (UDEX America) in Oak Brook, Ill. One of 40 alliance partners of UCCnet that help implement the synchronization technology, UDEX has on its roster more than 1,000 suppliers and 10 retailers, including Tesco and Sainsbury's (parent company of Shaw's) in the U.K. It charges suppliers an annual fee of $3,300. Retailers pay no direct fee, but Sheehan said suppliers pass on some of their costs.
According to John Denning, president, UDEX America, the start-up phase of UDEX's U.S. operations has five suppliers in both UDEX and UCCnet. In addition to sending UDEX-compliant information to Shaw's, UDEX is working with other UCCnet retailers and UCCnet to send data to all UCCnet subscribers, he said.
For Shaw's, UDEX complements UCCnet. "We look at UCCnet as an integral part of cleaning up and maintaining data," said Sheehan. "We look at UDEX as adding value at the supplier end, so when data goes into UCCnet, it's put in the same manner by all suppliers." UDEX, he added, doesn't "validate" data, as UCCnet does, but does ensure that "certain formats are followed."
With both services, data is "not only correct but normalized," said Sheehan. "If you don't have both, you don't get to 100% of what you want" in terms of data and invoicing accuracy.
In its private-label supplier UDEX test, Shaw's essentially just "pushed our suppliers to enter data via UDEX into UCCnet," said Sheehan. "Downstream, all I know is I got it and that it's UDEX-normalized. So far, UDEX has done a pretty good job." He hopes to have 22 more private-label suppliers, as well as other suppliers, using UDEX and UCCnet "before I retire." He gave no retirement date.
In addition to making UCCnet better, UDEX also helps Shaw's directly by, for example, making its search engine better, said Sheehan. "If you're searching for a vanilla product and it's represented by 'van' as well as 'vanilla,' your search engine goes crazy."
Shaw's is also testing UDEX's capacity to collecting data elements, such as state tax information, that UCCnet to date does not offer. The chain is running the same test with Chicago-based Web exchange Transora.
Shaw's is in production with three suppliers for UCCnet -- Procter & Gamble, Nestle Purina and Durkee Mower -- and in certification tests with another 18 companies, including the four UDEX-compliant private-label suppliers. The process, said Sheehan, is "very laborious," with most of the work focused on creating interfaces to legacy scanning and financial systems. "We've got to interpret UCCnet's data, and that's been a real challenge."
But so far Shaw's is getting the value out of UCCnet it expected, Sheehan said. "I recognized the inaccuracies in my data and my suppliers' data, and I can see the value in the small sample." That value will become greater when price and promotional data are added to the mix, he added. UCCnet is currently testing pricing data, but not promotional data as yet.
Meanwhile, Sheehan expects Shaw's investment in UCCnet to be paid back in "less than year" from a reduction in invoice inaccuracies.
Within the company, Shaw's is stressing the importance of UCCnet. In late September, Sheehan said, the chain made that point in a meeting to some 400 executives, "from store managers and up."
