OFF THE BOOKS

DEENA AMATO-McCoy

The 500-page product catalog -- out-of-date and overweight -- and the manual ordering methods that go along with it are poised for retirement as retailers and wholesalers migrate to more expedient electronic processes.

Product ordering through an on-line catalog -- the electronic version of the printed behemoth -- is gaining momentum because it's producing immediate and tangible benefits for both retailers and wholesalers.

Electronic product lists and radio frequency technology enable store staff to electronically order products without the need to sift through pages and pages of product price books.

While improved order accuracy is heralded as the most important benefit of electronic product ordering, other advantages cited include faster order processing, access to better and more timely data and substantial cost savings for both retailers and distributors.

"We have seen ordering accuracy increase to 99%," said Anthony Krajcik, data processing manager for Buehler Food Markets, Wooster, Ohio. "The system we use does not leave much room for error."

Using a radio frequency terminal, employees at Buehler's 10 stores scan a product's barcode on shelf tags, download the data into a computer and transmit the information to the warehouse, which confirms the order in real time.

Marty Simmons, director of retail information systems for Certified Grocers of California, Los Angeles, said the warehouse's ability to respond to an order quickly is extremely important.

"My perception is that I should be able to confirm my customers' orders in real time to eliminate incorrect orders, and our electronic catalogs achieve that," he said.

The 45 retailers using Certified's interactive ordering system have enjoyed improvements in service levels, he added.

"In the supermarket industry, there is a perceived service level and in the past that level was only at 98%," he told SN. "Since using the catalogs, we have seen both the customer-perceived level and the wholesaler-perceived level equal at 100%."

Simmons said electronic ordering is far more expedient than the manual process. "In-store invoice writing has not only become more accurate, it has also become 50% faster to write an order," he said. "It is the RF technology and instant transfer of information that speeds up the ordering process."

For 13-store Kennedy's Piggly Wiggly Stores, Coeburn, Va., the speed that comes with electronic ordering has led to labor savings.

"Just not having to go through that huge price book saves us time," said Robert Wright, management information systems manager for Kennedy's Piggly Wiggly.

"Electronic catalogs enable us to instantly keep track of our stock level because we know what we have in-house, what the warehouse has on hand, and what we have ordered," he said.

Wright explained the electronic catalogs allow employees to roam the stores and generate orders based on in-store stock levels and upcoming promotions.

Associated Grocers of the South, Birmingham, Ala., was to have rolled out an electronic catalog program only weeks ago.

According to Steven Edwards, who works in technical support at Associated, the program is designed to enable retailers to view products by item numbers, scan codes or departments. Orders entered into a computer spreadsheet template are then electronically transferred to the warehouse instantly.

"Associated Grocers' members connect to the wholesaler's on-line list of inventory via personal computer," he explained. "In addition to ordering store inventory on-line, members can check on the amount of inventory in the warehouse, product costs and any price discounts the warehouse is running."

Edwards noted that electronic catalogs can be updated instantly as opposed to traditional product catalogs which are printed every four weeks, "making them a week or two out of date by the time they reach our members."

Currently only 60 of Associated's 400 members are taking advantage of the on-line catalogs, but the wholesaler is pushing for at least 200 stores to begin ordering inventory electronically.

"The catalogs can be a central point of communication between stores and the warehouse, enabling members to easily order inventory," he said. "It is easier to order products in one step rather than interfacing with seven or eight different people to achieve the same task."

Based on the timeliness the catalogs offer, Fred W. Albrecht Grocery Co., Akron, Ohio, is working on the details for a rollout of electronic catalogs to its 33 stores in 1998, said Sam Stites, executive vice president.

"Speed, accuracy and daily updates are all factors connected to the benefits of electronic catalogs, but it is also a way for the warehouse to manage inventory," he said. "If daily updates are sent to our store, attention is paid to what is in the warehouse and what needs to be stocked."

Stites is exploring electronic catalogs as a way of enhancing the retailer's back-door receiving processes.

"I think that within back-door receiving, electronic catalogs are a necessity," he said. "If retailers are not on top of their back-door receiving, it will be hard to implement electronic catalogs -- it all goes together."

Stites explained that retailers need both components to track in-house products in real time.

"All products are updated from the warehouse on-line, and transmitted to the stores immediately, which also keeps track of perpetual inventory," he told SN. "We will be at this point in a year or two."