SAFEWAY, NABISCO CPFR PILOT LAUNCHED

KIM ANN ZIMMERMANN

PLEASANTON, Calif. -- Safeway here last week launched a six-month collaborative planning, forecasting and replenishment pilot with Nabisco.

Safeway is the latest supermarket to test CPFR. Later this summer, 12 companies are expected to release results of their CPFR initiatives.

"There is no doubt, with the number of retailers we are seeing come on board now, that CPFR is an efficient and effective way for retailers to communicate," said Joseph Andraski, senior vice president, OMI, Schaumburg, Ill., who has been involved in a number of CPFR projects.

Safeway will conduct the pilot in a Northern California Safeway and in a Vons supermarket, according to information disclosed during a panel discussion at the Washington-based Voluntary Interindustry Commerce Association's VICS 1999 meeting held last month.

The Safeway CPFR pilot will involve Planters products from Nabisco, Parsippany, N.J. Wegmans Food Markets, Rochester, N.Y., has also conducted a CPFR pilot with Planters products and expanded the project earlier this year to include Nabisco pet snacks.

"The Planters products are good to do, since there is a lot of promotion of that category and there are a lot of different segments, nuts as well as canister snacks such as cheeseballs," said Jerry Cantwell, director of customer service for Nabisco.

Looking at a category that is promoted heavily is important, he said, because promotions have a huge impact on forecasts.

One of the goals of CPFR is to help manufacturers and retailers coordinate promotion schedules, so the manufacturer is aware of planned promotions by the retailer and can ensure adequate product is available. In addition, the retailer and manufacturer are able to examine the impact of promoting a specific product on overall category sales, for example.

The Safeway pilot will use supply chain collaboration software from Syncra Software, Cambridge, Mass.

While industry observers have expressed concern over CPFR's ability to scale upward to include multiple categories, Andraski noted that a great deal of progress has been made on CPFR.

"There are a number of retailers moving forward. There have been some distractions, such as mergers and acquisitions and Y2K. However, things are moving ahead with good results," he said. Schnuck Markets, St. Louis, for example, has suspended its CPFR pilot to concentrate on Y2K initiatives.

Retailers and manufacturers involved in CPFR projects note that CPFR involves a great deal of management expertise.

"There are, however, very clear benefits," said Nabisco's Cantwell, noting that during the 34-week test at Wegmans, category sales for nuts increased 16.7% versus a decline of 7.2% elsewhere. In addition, Planters' share increased 53.9%.