In most cases POS data is used to communicate weekly store sales, and some retailers provide store on-hand inventory levels. This information is then used by the suppliers to know what is happening with their products by location or region. Many say that helps the supplier prepare for the next order from those customers, while suppliers indicate that this information allows them to see where products are selling and can confirm if marketing dollars are being spent wisely, or learn what is working in one area so it can be replicated with others.

• Another usage of POS data is for VMI (Vendor Managed Inventor) suppliers. Based on the relationship between trading partners, the information tells the supplier what needs to replenish, or is used to determine when the next product delivery should occur and what should be delivered. In some cases, the suppliers provide an 855 EDI transaction as a suggested PO, then the suggested order is approved and confirmed back, or is simply used as notification to the retailer of what will be delivered.
• Another use is in reference to Scan Based Trading (SBT). With this situation, suppliers are notified when products have been sold and that the retailer will be generating payment for those sales and that products need to be replenished if applicable

In many cases the POS data is delivered as an 852 EDI Transaction. That is especially true with the Scan Based and the VMI scenario where communicating POS for sales and inventory information is also provided via flat file.

Management of the information tends to be the biggest concern with POS data. Some suppliers may manage the information using spreadsheets while others use an internal tool created from this information, and still others use SaaS based systems pre-built for this information.

With the POS push, I wonder if we’re really providing the correct information and if we are truly collaborating with our partners, or is there something missing? I say; while POS is a start and does have value, I’m not convinced that the information is that helpful when preparing for the next orders. What about Forecast data?

Where POS data may provide some insight to the future what may be more important is knowing what the plans of the retailers are with regard to future purchases. POS data provides information about what has already happened. But without knowing what the future plans are, we may be missing something more important.

Some retailers are starting to realize this and are investigating what it would take to provide a Forecast to their suppliers electronically. For those not familiar with this aspect, the data feed comes in the form of an 830 EDI transaction. This data contains the Retailer's plans of estimated purchases out up to 26 weeks by company, by region or by DC/store per UPC/Product, and is usually provided on a rolling basis as they look into the future for these products.

For those retailers considering providing this information here are some things to consider –

• Suppliers are quite used to orders coming to them with 2 – 4 week lead times (domestic suppliers). Thus the most important  forecast is 4 weeks out
• For those suppliers that have longer lead times with their suppliers, or a production line; having expected purchases out 4 -12 weeks is invaluable
• Providing this information to the suppliers will allow them to make sure that they have more inventory. This will allow the retailer to shorten lead times and shrink inventory level (safety stock levels)
• Be aware that there are quite a few retailers currently considering the purchase of a forecasting module to assist with collaboration

For retailers: Instead of using the PO as a Forecast and making dozens of changes to the PO, consider using a Forecast file and then use the PO as the final confirmation of what you need.

For suppliers and service providers: I recommend you start looking at how you’ll support this information, because this request from the retailers is just around the corner. My guess is that we’ll see the same interest in Forecast data in the next 6 – 9 months that we have with POS data now. Are you prepared?