WAL-MART, WARNER-LAMBERT TEST INTERACTIVE FORECASTING

MARC MILLSTEIN

McLEAN, Va. -- Wal-Mart Stores, Bentonville, Ark., is launching a pilot program with Warner-Lambert Co., Morris Plains, N.J., that will allow the two companies to develop improved sales forecasts by linking information on-line.

The pilot program, which will involve 12 stockkeeping units of Warner-Lambert's Listerine product line, was expected to begin "imminently," said Matt Johnson, a consultant with Benchmarking Partners, Cambridge, Mass.

Johnson described the activity in a presentation at last month's Internet Conference here, sponsored by the Grocery Manufacturers of America, Washington.

"They are trying to make it a two-way street rather than a one-way street, so the supplier's input can affect the forecast," he said.

The pilot uses software developed by Benchmarking Partners that allows the trading partners to communicate on-line, over the Internet, a value-added network or a dial-up connection, Johnson said.

"We have already installed the software at Warner-Lambert and at Wal-Mart as well," he said.

Under the Listerine pilot program, point-of-sale and warehouse withdrawal-driven forecasts are uploaded from Wal-Mart's Retail Link system to a work station at the chain's headquarters. End users at Warner-Lambert tap into that sales forecast.

"They negotiate, saying 'I plan a promotion on this date, and I think I am going to sell more product' or 'I'm having some problems getting ship rates up, I am not going to be able to deliver as much as you're forecasting. Send that as backorder,' " Johnson said.

"You can negotiate that. Now you have a plan that's agreed on supply chainwide."

Before the pilot, Wal-Mart already was supplying Warner-Lambert with point-of-sale scan data, but the supplier had no way to easily and instantaneously transmit forecasting information back to the retailer.

Johnson said Benchmark has published the Internet protocol for this system on its Web site www.benchmarking.com, along with additional information. He is hoping other retailers and brand marketers will test it.

"The basic idea is to revolutionize the way that forecasting is done, to allow all the parties to get more of an accurate forward view of their demand," he said.