A&P IS BUILDING TRADING LOYALTY WITH CPFR PILOT

SARAH MULHOLLAND

NEW YORK -- An official from A&P, Montvale, N.J., said the retailer decided to conduct its own collaborative, planning, forecasting and replenishment pilot, without using one of the major food exchanges, as a way of building loyalty with its trading partners.

"We felt that going through the exchanges this early would go against that whole idea of building trust with our trading partners," said Harrison Lewis, vice president of data management and e-business, A&P.

"Services being offered by the exchanges will be taken into account for a scaled rollout," he added.

Lewis said A&P chose to use a Web-hosted service from Syncra Systems, Waltham, Mass., for its pilot. He explained that A&P officials believe this to be the most practical solution during the pilot phase.

A&P is currently working with four manufacturers for the pilot. However, Lewis would not reveal which manufacturers are participating.

The pilot has forced A&P executives to take a closer look at their relationships with their trading partners, Lewis said. "This really requires us to leverage the [trading] relationships we had in place," Lewis said. "Where we did not have a relationship, it requires that we build a relationship."

Moreover, Lewis also said A&P undertook the CPFR pilot with the understanding that, for now, it would be more of a training exercise.

"It is worth the investment to take the risk now," Lewis said. "We're not doing this to see if it makes sense, but to learn what is necessary."

Lewis presented an overview of A&P's CPFR pilot program while taking part in a panel discussion on the topic at the National Retail Federation Expo here earlier this month. He said A&P's CPFR pilot was launched in October 2001.

There has been a lot of talk in the food industry concerning the CPFR movement.

While the movement was seen as a high priority 18 months ago, some observers said it has been slow getting started.

CPFR calls for retailers and grocery/consumer product goods manufacturers to work together and share their data on sales results as a means to projecting more accurate sales forecasts.

The hope in the industry is that by using CPFR effectively, retailers will be able to cut inefficiencies from the supply chain, reduce costs and improve in-stock positions.

However, some observers note that retailers have been hesitant to sign on with software providers featuring CPFR solutions. Instead, they're waiting to see if using one of the exchanges may be a better route.

The major exchanges serving the food industry, Transora, WorldWide Retail Exchange and GlobalNetXchange, have yet to deliver on early promises of seamless, collaborative applications, say some industry observers.

Greg Buzek, president of the IHL Consulting Group, Boynton Beach, Fla., said many retailers are tired of waiting.

Joe Laughlin, chief executive officer of GNX, doesn't agree.

In announcing the rollout of GNX's CPFR solution two weeks ago, he said more and more retailers will start turning to the exchanges for CPFR solutions.

Laughlin said GNX hopes to have 30 to 40 retailers using CPFR this year.

Laughlin said successful CPFR pilots have proven it to be a viable value-added tool.