BUSINESS DRIVES TECHNOLOGY AT WEGMANS

David Orgel

CHICAGO -- Retailers must not put the cart before the horse when it comes to technology -- business decisions should drive technology, not the other way around, said Colleen Wegman, vice president of marketing, Wegmans Food Markets, Rochester, N.Y.

"It begins with your business strategy," said Wegman, whose company is one of the most recognized in the industry for its proficiency with technology. "Then you can consider what role technology can play to achieve the objectives."

Wegman made her remarks here during the Food Marketing Institute's Speaks presentation at the 2003 FMI Show.

Wegman also stressed the importance of determining "how you use technology to drive consumer value."

Among key benefits experienced by her company are:

Enhanced quality of product as items spend less time in the supply chain. * Reduction of out-of-stocks.

Improved pricing resulting from lower costs.

Faster checkout time at the front end.

The retailer's technology expertise was developed from a culture of internal sharing and education, she said.

"We convened cross-functional teams and educated our organization about technology. Now our employees are strong technology ambassadors."

The Internet's emergence opened many opportunities for the company. These included elimination of the need for duplication of data input and ability to work with a wide range of suppliers in a paperless environment.

"For example, virtually all of our perishables suppliers are on paperless procurement and payment systems, regardless of the size of the companies," she said.

Michael Sansolo, FMI senior vice president, who led the Speaks presentation, pointed to three technology issues that will be very important to food retailers. These are Sunrise 2005, data synchronization and the Electronic Product Code.

Sunrise 2005: Jan. 1, 2005, is the deadline set by the Uniform Code Council for North American retailers to be able to scan the 13-digit European Article Number at the point-of-sale. "You must make sure you have hardware and software to read this," Sansolo said.

Data synchronization: Sansolo said it will be critical for trading partners to communicate via the Internet to eliminate supply chain problems. "We'll need a mass of people populating this with data," he said. Sansolo urged retailers to become more educated about UCCnet to accelerate the pace of data synchronization.

Electronic Product Code: This emerging technology will enable companies to track products throughout the supply chain using microchips and radio frequency technology. Sansolo told retailers the EPC initiative "has tremendous implications for your business," including the potential to revolutionize the in-store checkout process and eliminate problems related to shrink, shoplifting and the supply chain.