ORLANDO, Fla. — Danny Wegman, who has been a strong proponent of such industry initiatives as Efficient Consumer Response and data synchronization, brought his vision of the “New Generation Sales Call” to a gathering of retail and CPG executives here last week.
Wegman, chief executive officer of Wegmans Food Markets, Rochester, N.Y., as well as chairman of GS1, Brussels, said that retailers and suppliers need to engage in sales discussions with a “common language,” clear visibility of products in the supply chain and “a strategic focus on growing sales without disruptions.” He stressed the need to eliminate disruptions, such as invoice deductions and delivery delays, caused by supply chain inefficiencies.
“This is a process we need to work on together as an industry to get rid of the waste and focus on growth,” he said.
Wegman delivered his comments in a keynote address opening the Food Marketing Institute's Distribution/Supply Chain Conference, held at the Renaissance Orlando Resort at SeaWorld. It was also the keynote address for the Grocery Manufacturers Association/Food Products Association Information Systems & Logistics Distribution Conference, co-located with FMI's event.
The co-location of the conferences dovetailed with Wegman's call for a revamped supplier-retailer relationship. “I'm excited about FMI and GMA joining together at this meeting; it's a great way to do business,” he said. “I'd rather sit with my suppliers at a conference than with my competitors.”
In a video presentation preceding Wegman's presentation, which had been shown previously at a conference late last year, data synchronization between trading partners was cited as the linchpin of an effective sales call, because it enables trading partners to reduce or eliminate such disruptive issues as invoice discrepancies. A leading practitioner of data synchronization, Wegmans is synchronizing data with practically all of its suppliers.
J. Alexander “Sandy” Douglas, Jr., president and chief operating officer, North American Group, Coca-Cola, who spoke after Wegman as part of the keynote presentation, said that “item and price data must be synchronized for back-office discrepancies to be minimized.”
But the New Generation Sales Call requires more than just synchronized data. Wegman acknowledged during the question-and-answer period that his company is engaged in this type of exchange with only five CPG manufacturers, including Smucker's and Coca-Cola. The initiative is still “in its infancy,” he said. “We're starting with a small group to make sure we do it well.”
Wegmans plans to increase the number of suppliers with which it is engaging in the New Generation Sales Call later this year, Marianne Timmons, vice president of supply chain and global business-to-business, Wegmans, told SN at the conference. “We don't see it happening with a large number, but rather with our best suppliers, who bring specialized knowledge to the table,” she said.
Wegman's message reverberated throughout the conference as several other speakers alluded to it. “I've seen the [New Generation Sales Call] video several times, and every time I see it I shudder,” said Bruce Hancock, director, customer service and supply chain collaboration, The Hershey Co., Hershey, Pa. “We at Hershey have too many of those situations where our salespeople talk to [retail] customers about OS&Ds [over, short and damaged goods], detention charges and unloading charges instead of trying to move product.”
Bill Homa, chief information officer at Hannaford Bros., Scarborough, Maine, who attended the conference, pointed out the difficulty of executing sales calls at the advanced level Wegman described. Item synchronization is just the beginning of what's needed, he said, especially for relationships with direct-store-delivery vendors.
In outlining the features of a New Generation Sales Call, Wegman described the “teamwork” required. Today's sales call uses what he called the “butterfly” (point-to-point) approach, where sales and merchandising people from a retailer and manufacturer are “expected to know everything about the business,” said Wegman. Under the new “diamond” paradigm, meetings would include experts from various departments: IT, distribution, accounting, merchandising and marketing.
Douglas said Coca-Cola is committed to aligning in the diamond format. “The key to success is working with our [retail] customers' subject matter experts,” he said.
Wegman said his company is also looking for suppliers in the new sales call to share their knowledge of markets, products and other parts of the business. Coca-Cola, for example, “helps us understand RFID and price synchronization, especially DSD,” he said. “We appreciate that knowledge.” Douglas said Coca-Cola is able to provide “key information to assist in understanding shoppers.”
The new sales call relationship is marked by mutual respect and empowerment, Wegman noted. “We're able to change plans and be flexible with suppliers. We want suppliers to act the same way.” He also expects suppliers to be tenacious, “fighting us when we're wrong, helping us to see a better way to do things.”
Another key element is the application of “common goals, definitions and measures” by retailers and manufacturers. Retailers are increasingly achieving this through use of a scorecard that tracks suppliers' performance in inventory management and delivery of goods.