The road to collaborative commerce is a long one, but Wegmans has begun by synchronizing its product data with several of its suppliers.
You and your suppliers speak a special language of purchase order numbers, unit measurements, and Universal Product Codes (UPCs). Imagine if suddenly communication became strained because the standards you use to define your business were no longer the same as your trading partners'. Orders that you thought were clear and correct arrive at your store in the wrong size and quantity. Sound familiar?
According to UCCnet, about 30% of retailer systems information is incorrect because of the lack of data integrity, the lack of agreed-upon standards for trading partners, and errors during manual processing. Eventually these inconsistencies result in excess inventory or delays in consumer products reaching the shelves. Ultimately, inaccurate data cuts into profits.
Wegmans, a 62-store grocery chain headquartered in Rochester, NY, decided in 1998, that it was not going to allow an information language barrier be the cause of profit loss. The grocery store chain became one of the first companies to work with its suppliers and UCCnet to gain the benefits of industry standards-compliant synchronized data. In other words, it cleaned up its speech so it could better communicate now and in the future.
A Forum For Equal Understanding
Before Wegmans could automatically update its basic product information, it used paper, faxes, and EDI (electronic data interchange) to communicate with its suppliers. "Over time, the quality of paperwork erodes as new pieces of paper arrive to update it," said Michael Merulla, e-commerce manager for Wegmans. "But it is very important for us to be in sync with our suppliers in real time, which is one of the primary reasons we worked with UCCnet." Traditionally, if a supplier were to introduce a new product, change prices, or modify existing product specifications such as package size, a Wegmans employee would have to confirm the changes. Then other employees would have to enter the new data into the company's ERP (enterprise resource planning) system.
Through UCCnet, a not-for-profit subsidiary of the Uniform Code Council (UCC), Wegmans and its suppliers all have real-time access to a synchronized product authorization file found on UCCnet's GLOBALregistry[tm]. Ralston Purina Company was one of the first suppliers to communicate with Wegmans via this method, which uses the Internet to exchange XML (extensible markup language) messages. When Ralston has an item update to its moist cat food category, it uploads the information through the GLOBALportal interface to the GLOBALregistry. Wegmans' system then automatically uploads and authorizes the information. Finally, Ralston receives a message from the UCCnet system confirming that Wegmans authorized the products, reflecting that data synchronization has been completed. This ensures that the accurate information for Ralston's product assortment is always available to either trading partner. And, in Ralston's case, the same process occurs between each retail outlet it supplies that is connected to the GLOBALregistry. Rather than Ralston updating every retailer partner with its moist cat food change, it updates UCCnet and its trading partners are automatically alerted of the change.
Both Wegmans and Ralston created their own interfaces to UCCnet, although other retailers and suppliers have relied on third-party solution providers. "It was important for us to use and maximize the internal enterprise systems we already had. We didn't have to start from scratch," Merulla said.
Cleansing Data Is Half The Battle
Retailers like Wegmans are encouraging more suppliers to become members of the UCCnet community, because if more companies are involved, there will be more benefits for everyone. So far, large suppliers such as Kraft, Procter & Gamble, Frito Lay, and Ralston Purina are participants, and Wal-Mart, Food Lion, Shaw's, A&P, and Ahold USA are among the retailers communicating with them. Since UCCnet is a not-for-profit subsidiary of the Uniform Code Council (UCC), the goal is to be publicly accessible for any sized company. "The advantage is that it gives us an open community where all suppliers and retailers have an equal opportunity to participate and receive the same benefits from the standardized system," Merulla said. Subscription fees to UCCnet are based on retailers' annual revenue, which helps to keep the playing field balanced.
Operating on this automatic standardized system will better position Wegmans for the future, as well. As industry standards change, such as the conversion of the UPCs to GTINs (Global Trade Identification Numbers), it will not be as difficult for Wegmans to transition since the codes will be automatically inputted into the databases via XML. Wegmans also anticipates the evolution into more complex e-commerce trading transactions. "We consider item data synchronization between retailers and suppliers to be worthwhile in itself; but beyond that, it is the foundation that will help us facilitate higher order e-commerce operations like CPFR (collaborative planning, forecasting, and replenishment) and transaction-based trading exchanges," Merulla said.