Wegman Updates Sales Call Pilot

MICHAEL GARRY

CHICAGO — Following in her father's footsteps, Colleen Wegman, president of Wegmans Food Markets, updated the industry on the company's “New Generation Sales Call” initiative last week here at the Food Marketing Institute Show/Marketechnics.

The New Generation Sales Call, a program aimed at fostering more efficient sales meetings between retailers and their suppliers — with fewer time-consuming administrative or supply chain disruptions — was proposed last year by Wegmans Chief Executive Officer Danny Wegman. He had previously outlined the initiative at the Food Marketing Institute's Distribution/Supply Chain Conference in Orlando, Fla., in March (see “Wegman Urges ‘New Generation Sales Call’, SN, March 26, 2007).

Also in March, Wegmans, Rochester, N.Y., embarked on a pilot program with Smucker's and Procter & Gamble to demonstrate the sales call initiative. The pilot, expected to be completed in mid-June, uses an Oracle decision support system hosted by Wegmans that enables the chain and the two suppliers to share supply chain metrics to make sales calls more productive.

At the FMI Show, Colleen Wegman, who was joined by Tim Smucker, chairman and CEO of Smucker's, in a session entitled “The New Rules of Engagement: Building Sales Through Stronger Partnerships,” provided a first glimpse into the progress of the pilot. “We have a long way to go, but this approach has tremendous potential for the future of our business,” she said. “It's a clear priority for us.”

The New Generation Sales Call is based on data synchronization — the matching of a retailer's accurate product data with that of its suppliers. Wegmans, which has pioneered data synchronization in the food retailing industry, has demonstrated that the process helps to reduce the invoice discrepancies and transportation delays that can interfere with productive interactions between retailers and manufacturers.

“Our time together is precious, and we want to make the interaction as effective as possible,” said Smucker. “In the traditional sales call, that's a difficult thing to do.”

GOALS AND MEASURES

In the pilot, Wegmans, Smucker's and P&G are using the Web-based Oracle system to work toward the same goals using the same source of information. “It's enabling us to work together in better ways and to trust that the work is getting done,” said Wegman. The companies have labeled this collaboration “common goals and common measures.”

Wegman said 18 measures are listed on a single scorecard shared by the pilot participants. The measures include sales, margins, market share, days of supply, cycle time, time of payment, invoice accuracy, service levels and on-time deliveries. “The scorecard provides one source of information, where previously we had multiple sources,” she noted. “It provides alerts so we can address ‘reds’ and celebrate ‘greens.’”

A key attribute of the new sales call is that it is supported by cross-functional teams at Wegmans and its suppliers, rather than funneled entirely through a Wegmans merchandiser and a supplier's sales executive. Input is sought from other departments, such as technology, distribution, logistics, accounting and marketing, in what is called a “diamond” approach, in contrast to a “butterfly” approach.

Wegman described one early success story in the pilot in which the trading partners were able to avoid a sales call “disruption” by resolving a question that emerged about an increase in days of supply from a vendor. “In the past, our distribution department would look at this measure in isolation,” she said. “With this tool, we were able to go right to the source across the supply chain to talk about this and find out the reason for it to be happening, and that it was being taken care of.

“By having visibility across the supply chain, our team was able to make the right decision,” she added.

In another example, Smucker's noticed a correlation between an invoice inaccuracy and a deduction as it was preparing for a sales call. “We were able to address this quickly and effectively before the sales call,” Wegman said. “In the past, this would have happened in place of the sales call. This shows the power of sharing information.”

The pilot has also helped a new grocery department merchant at Wegmans “get up to speed quickly on new categories and have a clear understanding of all priorities and initiatives for his suppliers.”

A more seasoned Wegmans merchant indicated that the pilot tool “helps everyone come to a sales call prepared for the most productive conversation,” said Wegman. “He said our business partners no longer come to our office to pull data. We can focus our time on the most value-added activities.”

Wegman executives have indicated that the New Generation Sales Call may not work equally for all suppliers. “A cookie-cutter approach doesn't work,” Wegman said. “We want to align ourselves with businesses that share the same priorities.”