SUPERVALU EDI PUSH IS WINNING PARTNERS

MATT NANNERY

ORLANDO, Fla. -- Supervalu has doubled the number of companies it is communicating with through electronic data interchange in the last two years, and the wholesaler-retailer is far from through yet.

"We went from 500 to 1,000 partners in the last two years," said Greg Zwanziger, corporate EDI manager at Supervalu, Minneapolis. "We will add another 400 to 500 partners in 1994."

Zwanziger spoke at a conference here titled Efficient Consumer Response Reality sponsored by the Institute for International Research, New York.

Response to the wholesaler's effort to promote the merits and greater use of EDI to its suppliers and retailers has been very strong, he said. "We have a backlog of companies waiting to do EDI with us."

Companies, he said, are finally beginning to understand how EDI can help them handle purchase orders and invoices more efficiently, while preparing to implement even more comprehensive ECR best-practice programs in the future.

"At Supervalu, we've eliminated four to five steps from the invoice process, and that led to a decrease in personnel in some areas," he said. "For a growing company, EDI is a way to move forward while keeping costs down."

That has been the case at Supervalu, he stressed. "We've had fewer product returns, fewer invoice deductions, reduced payment delays and reduced ordering lead times with suppliers. With EDI, we've been able to

take days out of the ordering process. That has resulted in better use of warehouse space and fewer out-of-stocks."

Zwanziger said doing away with the human error inherent in relying on information from written correspondence has resulted in less time spent reconciling errors in purchase orders and invoices. "We have manufacturers we send tens of thousands of purchase orders to a year, but because they've implemented EDI well, we hardly even hear from them about discrepancies."

Zwanziger said 67% of grocery manufacturers, 65% of supermarkets and 90% of food brokers are using EDI. He added, though, that most are using the technology to transmit purchase orders and invoices only. He cited a recent Andersen Consulting study stating that those groups handled 32% of their purchase orders and 16% of their invoices via EDI.

But it is in other applications of EDI that the supermarket industry will benefit the most in coming years, he predicted.

Today, EDI is being used by about 2,000 retailers to support computerized direct store delivery, he said. Transmitting advanced shipping notices, though, allows companies to time the flow of goods through loading docks better, a practice the industry is only beginning to undertake.

"Shipment notification is a way to facilitate cross-docking and continuous replenishment," Zwanzinger explained. "A lot of key implementation is now going on in the perishables area, and we should see a lot more movement in the area of advanced ship notices in the next year and a half."

The industry is exploring still other uses for EDI. "Seventy-five manufacturers are using EDI to transmit promotional announcements," he said. "People have to look at additional transactions set, not only purchase orders and invoices. Other applications will give companies real advantages."