IN 2007, TECHNOLOGY was often used as a means of fostering greater collaboration between retailers and manufacturers. Data synchronization — the matching of a retailer's accurate product data with that of its suppliers — continued to be a good example of collaboration. In addition to strides in synchronizing item data, the industry finally approved a Global Data Synchronization Network (GDSN) standard for price synchronization.
Data synchronization is the basis for a concept called “The New Generation Sales Call,” which was proposed by Danny Wegman, chief executive officer, Wegmans Food Markets. The idea aims at fostering more efficient sales meetings between retailers and their suppliers — with fewer time-consuming administrative or supply chain disruptions. This year, Wegmans conducted a pilot program with Smucker's and Procter & Gamble to demonstrate the benefits of the sales call initiative.
Another technology-based example of collaboration is the use of advance shipment notifications (ASNs) over the past 24 months by many large direct-store-delivery (DSD) vendors as part of an electronic back-door receiving process that encompasses about 4,500 stores operated by five major food retailers. The vendors, including PepsiCo, Coca-Cola and Anheuser-Busch, have each begun employing the ASN process for DSD receiving with at least two of theretailers.
Out-of-stocks is another area where retailers and manufacturers are working together on answers. At the Food Marketing Institute's Distribution/Supply Chain Conference in March, a Safeway executive, Brooke Fan, director of supply chain strategies, said the chain needed to work with suppliers on promotion planning and forecasting to ensure product availability during promotions. A key part of this collaboration is sharing out-of-stock information with suppliers.
RFID offers another opportunity for collaboration, though so far Wal-Mart Stores remains the primary user of that technology, with roughly 1,400 RFID-enabled stores. A few manufacturers — notably Kimberly-Clark and Procter & Gamble — have used RFID to ensure that promotional displays are placed on the sales floor at the designated time at Wal-Mart stores, rather than left to sit unused in the back room.
During the past 18 months, Dallas-based Kimberly-Clark improved its compliance rate for promotional displays at about 120 RFID-equipped Wal-Mart stores from 55% to over 75% by employing RFID.
Some food retailers are also collaborating with an unlikely partner — the U.S. Environmental Protection Agency — in a program officially launched last month called the GreenChill Advanced Refrigeration Partnership. In this program, food retailers as well as refrigeration equipment and refrigerant manufacturers voluntarily provide data on refrigeration practices to the EPA in return for data analysis and consulting help.
The founding members of GreenChill are Food Lion, Hannaford Bros., Giant Eagle, Publix Super Markets, Harris Teeter and Whole Foods Market, along with equipment manufacturers Hill Phoenix, Kysor/Warren and Honeywell.