SUPERVALU TO PUT SUPPLIERS ON PORTAL

MICHAEL GARRY

MINNEAPOLIS -- Supervalu here has launched a drive to enroll a projected 6,000 manufacturers and brokers onto its two-year-old SV Harbor Web portal, giving them unprecedented access to Supervalu data and a means to deliver their own data to the retail/wholesale giant.

By migrating its suppliers to an electronic data delivery system for a wide variety of merchandising and category management applications, Supervalu aims at gaining the kind of supply chain efficiencies that have heretofore been mainly achieved by mass merchants like Wal-Mart and Target, observed Mike Terpkosh, director of category management development and project manager for SV Harbor.

According to Terpkosh, Supervalu anticipates the 6,000 companies will be using SV Harbor "once the rollout is complete by the end of 2004." By that point, he said, certain applications on the system, such as communication of new item and promotion information, will be handled only through SV Harbor, he said. "We will cut off traditional ways of submitting new items and promotions. There will be no more paper forms."

SV Harbor was initially developed for Supervalu's independent and corporate stores. There are now about 5,800 retail users on the system at 2,100 independent and corporate stores.

Richard Kochersperger, director, Food Marketing Group, Wallingford, Pa., gave Supervalu high marks for building a system that "recognizes that those who have better information in the supply chain can make better decisions."

In the initial launch period that began late last month, 1,500 manufacturer or broker companies encompassing about 4,000 users, who have been employing a separate Web site for planogram transmission and reset notifications, will begin handling those functions on SV Harbor, along with other merchandising functions.

Supervalu also plans to have virtually all of its 4,500 independent stores and 1,400 corporate stores on the system by late July, with the Eastern region the last to sign on, said Don Derendal, vice president, technical operations. "Vendors will then see the entire company picture when they log on."

Terpkosh said Supervalu has established a base subscription fee for manufacturers and brokers to use SV Harbor, based on size and volume of Supervalu business. The company will also charge independent stores a fee for certain applications like training tools, said Derendal. The fees will help Supervalu cover development costs and pursue additional development. A Supervalu spokeswoman declined to reveal the company's investment in SV Harbor.

Supervalu officially kicked off the introduction of SV Harbor to the manufacturers and brokers in its Northern region at a meeting at its corporate headquarters here on March 24, followed by a meeting in Kenosha, Wis., on March 26, for the Midwest and Southeast regions; a meeting today in Columbus, Ohio, for its Central region; and one later this year for its Eastern region.

In the initial rollout this spring, Supervalu will focus on allowing manufacturers and brokers to submit new items and promotions via SV Harbor. In addition, they will be given the ability to look at inventory levels at Supervalu warehouses, as well as the sales history for items at warehouses and the status of items. The companies will also be able to look at the "order well" to see what retailers have booked, enabling their salespeople to "fine-tune what they are doing in the field," said Terpkosh.

These initial applications will replace manual processes for submitting new items and promotions and checking inventory and order status, noted Terpkosh.

In the fall, Supervalu will launch phase two of the SV Harbor rollout to manufacturers and brokers. This phase will enable the companies to access detailed information on chargebacks and deductions, including digital images of ads.

In addition, in phase two Supervalu will begin allowing manufacturers not involved in vendor-managed inventory programs to access demand forecast information over the Web to support their production estimates. The vendors will be able to provide feedback on whether Supervalu's forecasts are too high or too low.

Finally in the spring of 2005, Supervalu will unveil its third phase of the rollout, adding electronic communications similar to e-mail between vendors and itself concerning chargebacks and deductions.

For its independent and corporate stores, SV Harbor provides such applications as online reports, merchandising (real-time orders, ads and surveys), invoices, pricing, promotions, training, signs/labels, e-mail, customer service for returns and damaged goods, accounting, equipment ordering, and planograms. "Retailers love the ability to get data 24/7," said Derendal. "It makes it easier to do their job."

According to Supervalu, the scope of SV Harbor for both its retail stores and vendors will be among the most advanced of any portal used in the traditional retail industry. Unified Western Grocers, Los Angeles, is also in the process of rolling out an extranet for its retailers and suppliers called Memberlink.

Supervalu has gotten a preview of the impact of online delivery of new item information as it began testing this process over the past 18 months, said Terpkosh. "We see today that new items will be accepted faster and flow through the system faster," he said.

This efficiency is having a positive effect on sales, Terpkosh noted. Moreover, stores in remote locations will get to see "opportunities not presented to them before," he said.