UNITED GROCERS UNVEILS DECISION SUPPORT TOOLS

DENISE ZIMMERMAN

PORTLAND, Ore. -- United Grocers here will launch today the second major wave of a broadbased information systems program designed to empower retailers with access to timely, store-specific data and a suite of decision support tools.

Two new software applications -- one for electronic invoicing and another that provides a profitability snapshot of the business -- were to be made available today as part of the Retail Information Systems Plan developed by the wholesaler's Retail Advisory Committee.

On Jan. 1, a price modeling application will be made available to serve as a "what if" query tool for retailers wanting to view how various cost structures would play out based on their store's movement.

The first application in the project, an electronic price guide, was introduced in September and an estimated 60 stores are now using it, said Mike Brown, manager of retail systems at United Grocers, and chairman of the Retail Advisory Committee.

"It's an electronic format of our printed version, but we've added a lot of enhancements that allow for some other things, such as picking the best price for an item," he said.

Bill Smith, one of the first users of the electronic price guide and owner of Chester's Thriftway, John Day, Ore., said the new tool is far more useful than its predecessor.

"With the printed order guide, all you could see is the deals that are currently in effect," he said. "With this [new tool] you can see all the deals, sometimes six months out."

The application, which taps into United's database containing store-specific information, enables retailers to sort by item movement or by profit margin, for example, "so you can get all the angles" before making a buying decision, Smith added. "You can also sort by warehouse movement so you can see whether you really have the best items in your store."

The electronic price guide also promises considerable benefits for United Grocers, which expects to save some $800,000 a year in printing and distribution costs when it phases out the paper version, a 350-page book distributed to 275 retailers weekly. United's Brown said he expects 170 retailers, which represent about 80% of the wholesaler's volume, will be using the tool within a year.

Electronic invoicing, one of two new applications introduced as part of the Retail Information Systems Plan initiative, will enable retailers to receive invoices electronically and to more closely track their orders and make substitutions, if needed, in a timely manner.

For example, Brown said, "Within about two hours of processing your order, we can tell a retailer what he is going to be shorted so he can call back and say, 'I know you're going to short me but I've got an ad on that item -- can you replace it with this' other product?" United Grocers would then make a manual adjustment to the order.

The electronic invoicing application also allows retailers to view periodically how their order is filling a truck for maximum efficiency and to obtain full truckload discounts.

The new capability will open the door to a perpetual inventory system, Brown noted, because inventory on-hand will be updated at the store level immediately.

The other new application introduced today, called 7 Day Operating Statement, is designed to help retailers calculate individual store performance.

"We're going to take the point-of-sale movement and by department can give you what your going out gross [profit] was based on your actual sales and cost on a weekly basis," Brown said.

With that data, the retailer can key in his own fixed costs and labor to calculate a snapshot of the business. "It's not totally scientific and not as detailed as we'd like but for somebody who's not had this tool, it will be helpful to get within hundredths of a percent."

The electronic price guide application costs retailers $10 per week per store; the electronic invoicing and 7 Day Operating Statement applications together cost $5 per store per week. The cost for the price modeling program to be introduced next year has not yet been determined.