SUPERVALU TO BROADEN ITS USAGE OF EDI TRANSACTIONS

LINDA PURPURA

EDEN PRAIRIE, Minn. -- Supervalu here will expand its use of electronic data interchange to include advance ship notices and deduction/chargeback transactions in the summer and the fall, respectively.

With these additions, Supervalu will be employing a wide range of EDI transactions, including purchase orders, purchase order changes, invoices, electronic funds transfers, promotion announcements and item maintenance.

Greg Zwanziger, director of electronic commerce at Supervalu, said advance ship notices and deduction/chargeback transactions will help cut costs in the supply chain and provide substantial savings. Advance ship notices, for example, could cut average dock time by as much as 30 minutes when a shipment is received, he said.

Supervalu predicts the number of manufacturers sending invoices via EDI will grow by almost 70% this year; this area has been experiencing growth of 20% to 25% a year over the last three years. Zwanziger noted that in 1996, Supervalu doubled the number of its vendors whose invoices were processed via EDI, from 175 to 350.

Use of advance ship notices will provide "some good benefits in the areas of streamlining the processing at the warehouse as well as improving our accuracy in receiving," Zwanziger said. It will also help Supervalu improve the accuracy of shipments to its customers.

Sending deduction/chargeback transactions via EDI will allow Supervalu to provide more accurate data, including vendor invoice numbers and Universal Product Codes, to manufacturers. Typically such transactions are used for a deduction against a vendor, for invoicing errors or promotional billbacks.

Zwanziger said that with this data, manufacturers say they'll be able to reduce the cost of handling deductions by an estimated 50%, because they won't need to make as many follow-up calls to check information.

While Supervalu's eventual goal is to eliminate the need for deductions altogether by more closely aligning its database with that of vendors, the transaction "says there are going to be some number of deductions that will still exist," Zwanziger added. "But this can help eliminate a lot of costs and streamline the processing between retailers and manufacturers."

Price information, another EDI transaction, is in its very early stages, and no date has been finalized for its rollout.

Supervalu is also two to three months away from implementing a frame relay system with some of its larger partners. A value-added network is currently available to Supervalu vendors.