ST. LOUIS -- Schnuck Markets here and Wegmans Food Markets, Rochester, N.Y., are among a group of diverse retailers and manufacturers who met earlier this month to establish an infrastructure and related communications standards for collaborative forecasting and replenishment transactions using the Internet.
In addition to Schnuck and Wegmans, the team consists of representatives from Wal-Mart Stores, Bentonville, Ark.; Warner-Lambert Co., Morris Plains, N.J.; and Procter & Gamble, Cincinnati.
By developing an Internet-driven process to exchange forecasting and replenishment information, retailers and manufacturers will be able to work together in a real-time, interactive environment.
Such capability would greatly enhance retailer-manufacturing joint planning efforts, according to Bob Drury, vice president of management information systems at Schnuck Markets.
"Let's say we are setting up a promotion on Tide laundry detergent. We try to understand the volume we will need to stock for the promotion and the consumer pull we expect," he said.
"Using a spreadsheet program to quantify information and dates, we will input our data and, using the Internet, we can upload the information to end users at Procter & Gamble. They will receive the forecast, make revisions, then send it back to us via the Internet," he said.
The process, resembling a conference call, will enable retailers to communicate replenishment requirements to manufacturers quickly and easily. Through the swift exchange of data on-line, manufacturers will be able to refine forecasts immediately.
The initiative is in the planning stage, according to Drury, and reportedly, a pilot test for interactive collaborative forecasting will be functional by April. After evaluating test results, the process will be proposed as an industry standard.
"The goal is to have this adopted industrywide so we don't have multiple systems talking in different languages; we want one good system that everyone can implement and take advantage of," said Jeff Baum, spokesman for Warner-Lambert.
The team is considering implementing Standard Interchange Language for collaborative forecasting transactions. "The grocery industry is using this language for various transactions because it is interactive, it is flexible and it doesn't require predefined transaction sets," Drury told SN.
Currently, the group is developing security standards, evaluating cost issues and researching how to successfully introduce interactive collaborative replenishment on a broad basis. The group is expected to meet again this month.
According to Rob Fritz, vice president of corporate business teams for Warner-Lambert, "The process will give a more accurate depiction of future demand requirements, will improve the 'ability-to-meet' requirements and will supply product to be in place to satisfy customer demands."
Drury said using the Internet for such business-to-business information exchange can result in significant savings for all players in the industry.
"The current cost of communication technology is high, and this process looks like it has the potential to drive down costs dramatically" as a possible alternative to third-party value-added networks, he said.
Wal-Mart and Warner-Lambert piloted a similar, though proprietary, program last month to develop improved sales forecasts by linking forecasting and replenishment transactions and negotiations on-line.
"Wal-Mart reconsidered its proprietary approach and is pursuing this initiative because it is supported by the industry," Drury said. Wal-Mart could not be reached for comment on the issue.