Retailers have used electronic data interchange to automate the ordering of everything from soup to chocolate since the late 1980s. Many in the industry say they believe that retail is poised to take another technological leap with the establishment of business-to-business exchanges such as Transora Inc. and WorldWide Retail Exchange LLC.
Retailers and suppliers are choosing to trade on the electronic hub that offers them the best services. However, this is causing what many see as unnecessary duplication of effort when trying to connect accounting, inventory and logistics systems to a hub.
Many of the nations largest retailers are trying to remedy this problem by turning to UCCnet Inc. to synchronize data among retailers, suppliers and exchanges.
“At the end of the day, a retailer wants to connect to one place and see everything,” said Susie McIntosh-Hinson, manager of e-commerce at supermarket chain Food Lion LLC. “You dont want to worry that supplier A has its information in Transora and supplier B has its information in WorldWide Retail Exchange. We saw early on the need for data synchronization and joined UCCnet—that is a no-brainer.”
UCCnet, a nonprofit subsidiary of the Uniform Code Council Inc., provides a registry and data synchronization services that enable retailers and suppliers using different B2B hubs to exchange data smoothly.
This week, UCCnet, which is based in Lawrenceville, N.J., will announce an alliance with WorldWide Retail Exchange, of Alexandria, Va. The agreement is expected to mirror a recently announced partnership that UCCnet made with Chicago-based Transora, which will allow retailers to upload data from the exchanges product catalog to UCCnets Globalregistry. UCCnet checks the data to make sure it complies with industry-standard product descriptions and synchronizes the data with other electronic hubs.
UCCnet is maintaining a relatively small catalog so that it does not compete with its exchange partners, according to spokeswoman Jennifer Roberts. It contains only 62 product attributes, such as weight, dimension and the size of a pallet.
The organization is looking to sign up more exchange partners. “The major exchanges fit into our vision; they can help build a community,” Roberts said.
UCCnet may get a push from the nations largest retailer, Wal-Mart Inc., according to a forthcoming report from Meta Group Inc. The market analysis company is readying a report that says Wal-Mart, of Bentonville, Ark., and other retailers will require their grocery suppliers to publish their catalogs through UCCnet by September. Wal-Mart officials did not return calls by press time.
Getting suppliers to fall in line may be easier said than done, according to the reports author, analyst Gene Alvarez, in Stamford, Conn. Although e-commerce could save those suppliers money, many are operating on such slim profit margins that they do not have the technical resources to carry out such tasks, Alvarez said.
Like any large retailer, Food Lion has thousands of suppliers, but the company is urging its largest suppliers to get on board first to take advantage of the economies of scale.
“Its one of those 80/20 rules; you do a majority of your business with a small number of your largest suppliers,” McIntosh-Hinson said.
Just getting to the stage where data synchronization is necessary has been a big step for Food Lion and its suppliers. “The difficult part—whether you are a supplier or a retailer—is implementing the changes into your back-end system, doing the workflow mapping,” said McIntosh-Hinson, in Salisbury, N.C. “Thats the hard part, [but] its the core of your business, and you need to do it right.”
Food Lion, which is using B2B integration software from Vista Technology Group Ltd. and IBMs CrossWorlds division to set up that back-end workflow process, is using the opportunity to see if there are any steps in its business processes that it can eliminate.
Syncing data so transactions flow smoothly is just the beginning of the payback that retailers hope they will see from doing business through UCCnet and online trading exchanges.
One of those initiatives that many retailers have in the hopper is collaborative planning, forecasting and replenishment, or CPFR. This is a process whereby retailers and their suppliers electronically exchange past sales information to automatically—to the extent that is possible—reconcile promotions, forecasts and orders.
Cost savings will come not just from faster communication but also from more accurate communications, observers say.
“Your accuracy is greatly improved,” McIntosh-Hinson said. “If a mistake is made, it is proliferated throughout your systems. If you can stop an error, youve accomplished a lot.”