IMPORTANCE OF EDI IS URGED AT PMA EVENT

AMY I. STICKEL

DALLAS -- As produce executives face the brave new world that technology offers, another acronym is turning up in their alphabet soup -- EDI.

However, like ECR (Efficient Consumer Response) and HMR (home-meal replacement), electronic data interchange may be more talked about than actually implemented in the produce department.

Still, it can be an important tool for retailers hoping to make a success of fact-based management in produce, according to Chris Cummins, program manager of national standards for the Uniform Code Council, Dayton, Ohio.

"Fact-based management is a reality today," said Cummins, speaking during a presentation at FreshTech '96, held here last month by the Produce Marketing Association.

"Information systems have changed the way we do business. We're increasingly focused on using real data and real information that's very precise about how product is moving, how it's selling, how it's being distributed," Cummins said.

Efficient Consumer Response -- which has manifestations in category management, continuous replenishment, flow-through distribution and activity-based management -- has its basis in grocery, Cummins said. It's not as ingrained in produce and floral. However, the potential is there, he said.

"A set of tools exists, and is what the Uniform Code Council is focused on," he said. EDI, identification codes and bar codes are all part of that, he said. Cummins used a triangle, with those three separate tools as legs, to illustrate the relationship each has to the other.

Steve Ahlberg, vice president of member services for PMA, Newark, Del., also said the tools all tie in.

"You really can't do EDI unless you have a case code for the product you're selling," Ahlberg said.

In its simplest terms, EDI moves information between companies, Cummins said. "It is a standardized way to carry information between business partners," he said.

EDI allows computer-to-computer communication, which is much faster than traditional forms of communication between buyers and sellers. Since it is computer-based, that communication can be reliably interpreted and processed, he said.

"EDI structures business messages for effectiveness," he said. That effectiveness is used in merchandising, ordering, logistics and financial transactions.

"It allows everybody to read from the same page." And the ability to read from the same page is critical, Cummins said. "Companies need stable definitions for the products they buy and sell. Suppliers and retailers need synchronized data about product description, product quantity, price and so on.

"Data base synchronization is accomplished through unambiguous identifiers, which provide companies a way to say, 'this is what we're talking about,' " he said. Data base synchronization is also accomplished through electronic transfer of data, he said.

Tracking yield and shrink at store-level is another function of technology "that is more recognized than understood," he said.

Deploying products more profitably, which is the bottom line, is yet another advantage of using technology.

Cummins also talked about "where the rubber meets the road." Scanning at the front end already exists, and that allows checkout clerks to ring products through at the right price. Scanning also allows retailers to understand buying patterns, which is a large part of category management.

Continuous replenishment is another advantage of front-end scanning.

Cummins acknowledged that produce and floral are more complex than the grocery or other industries. In produce and floral, both generic and branded items go through the system, which leads to multiple types of data, he said.

Cummins also spoke about the two other "legs of the triangle" that make up the tools for ECR, bar coding and identification codes.

Bar coding is most successful at the point of sale. For produce and floral, it is also the least used of the three tools, he said.

Bar coding, of course, is more efficient than entering codes by hand at the checkout. It is also more efficient than key entry, since the automation cuts time and errors, Cummins said.

Identification codes provide a common language between companies, he said. Product identification codes are the most important type. In produce, those include price look-up codes, Universal Price Codes, SCC-14 and SSCC-18.

"PLUs have a certain level of functionality in terms of category management," he said. "You can identify how, for example, vine-ripe tomatoes are performing. But you can't evaluate how a certain supplier is performing."

UPCs, meanwhile, are typically designed for point-of-sale checkout, not for case coding at the warehouse level. Cummins identified three types of UPCs: "regular" UPCs, "generic" UPCs and random-weight UPCs.

The regular UPCs contain numbers specific to a supplier and product, which identify down to the brand and stockkeeping unit level. These numbers are compatible outside the United States and Canada.

Generic UPCs identify products as a standard commodity, where the supplier and brand aren't relevant, Cummins said. Those commodity definitions are maintained by the Produce Electronic Identification Board, Newark, Del.

Random-weight UPCs are not used extensively in produce, Cummins said. "I'm not here to recommend using it," he said. "It's used more in dairy, meat and deli." Random-weight UPCs aren't really identification codes, since they are used more by retailers than manufacturers, he said.

SCC-14 codes are used on cases and cartons, as well as on individual items, he said. The SCC-14 identifies items that are ordered, that are sold and that are fixed products.

SSCC-18 codes are used extensively in dry grocery. The code identifies one-of-a-kind packs, pallets and shipments, "anything that needs to be tracked uniquely," he said.

Retailers need to ask themselves if they need codes to identify cases that are unique, said Ahlberg of PMA. If the case needs to be identified as unique at the warehouse level, than an SSCC-18 code should be used.

"If you don't want to differentiate boxes, you can use SSC-14 code," Ahlberg said. "If you're a supermarket, this can expedite the receiving process," he explained. Case codes, per se, aren't necessary. But the description of what is in a case is critical, and case codes provide the best way of conveying that information, he said.