TRANSORA

David Merrefield

A new permutation of the Efficient Consumer Response initiative was conceived of some 110 days ago at Tribeca Grill, a restaurant in lower Manhattan. Last week, it was heralded at a luncheon at the same restaurant, and it was dubbed "Transora." SN editors were there.

How can we be sure ECR is revivified? Consider these facts: Last week's announcement that trumpeted Transora was attended by the utterance of the ECR's defining mantra, "low-hanging fruit." Also, during the presentation, many charts were shown, some with oblongs, others with rectangles. The shapes ran both horizontally and vertically, and many were shot through by arrows. There can be no question; it's back. But it has been returned to us in quite a different guise, and under different and far more lucrative sponsorship. These factors lend to the new efficiency initiative an aura of potential success.

Let's trace what brought us to this propitious juncture: An e-commerce group of the Grocery Manufacturers of America assembled at the restaurant in March to discuss efficiencies that might be obtained by setting up an Internet-based exchange on behalf of the industry. But the wolf was at the door: Countless third-party exchanges catering to manufacturers and retailers were being set up, as were retailer-based exchanges. So too were initiatives from trade associations and other manufacturing styles, such as autos. Projects such as those held the danger of effort duplication, and, worse yet, of sowing upon the land a host of incompatible trading standards. The industry group sensed that no time could be lost in noodling out a concept for a CPG exchange. An exploratory group was appointed, headed by Sara Lee's Judy Sprieser.

Then, in May, at a special board meeting of GMA convened during the Food Marketing Institute convention in Chicago, it was decided to proceed. Therewith, no fewer than 49 heavyweight CPG companies committed nearly $250 million to form Transora, or roughly $5 million per company, on average. Some ponied up more, some less. The 49 will become equity owners of the for-profit Transora. No outside funding was required; GMA won't be an owner.

You'll learn a lot about Transora's offer by reading the news article on the front page of this week's SN. I won't recite details here, but all are intended to improve efficiency and lower costs.

Initial services will facilitate vendor efficiency, but they may later move toward services of interest to retailers, and maybe retailers will participate. Pilot projects are now underway and the first services -- procurement and product catalogs -- should be running by late this year. The Transora.com Web site exists now.

How will these efforts interact with those of those of the recently founded retailer-controlled exchanges, GlobalNetXchange and WorldWide Retail Exchange? What competition will third-party exchanges pose? How will the efforts of UCCnet fit in? No one knows, but let's hope universal data and exchange standards will emerge, lubricating transactions from raw material to consumers. Given that, Transora will succeed and easily outstrip ECR's accomplishments.