KROGER SETS DEADLINES FOR DATA PROGRAM 2004-08-30 (1)

MICHAEL GARRY

CINCINNATI -- Kroger here has sent a letter to its nonperishable suppliers announcing a new-item and data synchronization program, and setting deadlines for compliance.

The program is being administered through Chicago-based Transora, which Kroger selected in May as its recipient data pool.

According to the letter, Kroger is asking suppliers to enroll in the program by Sept. 30, 2004; begin submitting new-item information through the system on Feb. 1, 2005; and begin synchronizing data for all current items on April 4, 2005.

The letter, released Aug. 13, was signed by Scot Hendricks, Kroger's vice president of grocery merchandising and procurement, and Sukanya Madlinger, its vice president of drug/GM/pharmacy and procurement.

The aim of the program is to "streamline our new-item setup process and synchronize data for current items," stated Kroger's letter to suppliers. "The use of standards-based data will improve the quality and speed of the product information that flows between our companies." Better information will reduce invoice errors, which individually cost $40 to $400 to correct, noted Kroger.

Kroger declined to respond to a request for comment. However, it provided ample information about the program, including the letter, on Transora's Web site, www.transora.com.

"This initiative is of critical importance to Kroger, and, given the industry-recognized benefits of data synchronization, we expect our supplier community to provide their full support," said Kroger on the Web site.

"Don't underestimate the effort needed to prepare and cleanse your data for synchronization," the letter added. "Manufacturers that have completed the process indicate that this could take several months to complete."

Instructional Webinars for suppliers began last Monday and will run through September. Kroger's program comes as U.S. retailers and consumer packaged goods companies are making a transition from synchronizing data via UCCnet, the Uniform Code Council's data sync service, to synchronizing via a new Global Data Synchronization Network (GDSN). GDSN was officially launched this month, though it is in the early stages of development. The Kroger program "does add yet more weight to the success of GDSN," said Andrew White, research director, Gartner, Stamford, Conn.

UCCnet itself has become the U.S. data pool. It has shifted responsibility for serving as a Global Registry, or directory of data pool information, to GDSN. Before joining Transora, Kroger had subscribed to UCCnet's item registry.

Kroger does not require suppliers to use Transora as their data pool for item synchronization, although no other source data pool, including UCCnet, has yet established a connection to Transora, observed David Garcia, vice president of global marketing, Transora.

Nevertheless, suppliers are required to use Transora for submitting new item information to Kroger, according to information on the Transora Web site. Users of Transora's data pool can automatically populate the majority of attributes required for new-item introductions.

Kroger is stressing the need to automate new-item introductions, historically a time-consuming, error-prone manual process. "Rather than implementing a program focused solely on data synchronization, we have expanded the scope to include the elimination of our paper New Item form," revealed the letter. "A dual focus will allow you to launch new products faster, and reduce the administrative time your salesforce spends on item setup and maintenance."

At Kroger's end, the new-item program will allow its category managers to "have more accurate and timely information to make their purchasing decisions," said Kroger on the Transora site. Kroger described the new-item program as a "Web-based solution" in which "standard data elements will be combined with Kroger-specific attributes."

New-item introductions have been a "huge pain point with a lot of retailers," said Judy Sprieser, chief executive officer, Transora. Transora's security measures for new-item and other sensitive data like price and promotion have received an audit certification from Ernst & Young, said Garcia.

Kroger will initially synchronize mandatory item attributes as well as attributes on its paper-based item maintenance form. Price and promotion information will be synchronized at a later date.

Kroger described Transora's pricing for manufacturers using the new-item and data sync functions as "very attractive." Suppliers shipping only a few items to Kroger will be able to synchronize data "manually" via Transora, Kroger said.

Kroger's relationship with Transora predates the current program, beginning in November 2002 with a synchronization pilot for direct-store-delivered products.

KROGER TIMELINE

September 30, 2004: Enroll with Transora

February 1, 2005: Begin populating Kroger New Item Introduction solution

April 4, 2005: Begin synchronizing data with Kroger