The Economy is improving but at a much slower pace than anyone is wanting. Sears, a retail icon from the 50's and 60's, is struggling to the point that adjustments are now being made including store closures and layoffs. Changes are being made at the top for some other companies, like Christopher and Banks and realignments like Best Buy. With all this happening, it's imperative that organizations continue to find ways to operate their processes more efficiently.Nearly everyone understands that consumer buying methods are changing from Big Box retail stores to Ecommerce (Online). As you've all read elsewhere, this change also means changing the way that you and your trading partners need to work together. With many, Ecommerce had meant fulfilling from a Distribution Center. However with demands for expanded assortments of products or when a retailer is testing out a product prior to adding to the store selection, retailers are asking their suppliers to participate more actively in the process. This includes making available additional products to be presented on the retailers' website and to support shipping directly to the end consumer.
I've written on various aspects of this process in the past but it's been quite some time since I've done so around the step that starts the entire process of managing items. Many buying organizations currently manage this process manually. This means they are adding new items to their item master based on a list of the products that their suppliers provide, and entering the bare minimum data to meet the item master system requirements. This also means that changes to attributes or alerts of an item being discontinued are likely communicated manually through phone calls or emails. As a retailer looks at increasing the products available to their consumers, there is no way they can support that increase with the manual processes they are using. As a reminder there are several methods available to suppliers to provide this information -
- GDSN/ PIM – some suppliers/retailers use Global Data Synchronization processes through the GDSN (Global Data Sync Network) and PIM tools to receive and validate Item attributes. Partners join the network, register their products, and provide data feeds for validation per partner.
- Universal Catalog Providers – some suppliers use an exclusive Catalog provider data pool for storing the item information. With this method it’s the provider that is contacted by the retailer or supplier to send the data requested. Suppliers should also be aware that some retailers are only willing to receive item information through their provider, and not one of your chosing.
- Direct 832 – some suppliers do not subscribe to a catalog service so they are likely to send you an EDI 832 file.
In any of the above options there would need to be a definition of the data requirements, which tends to be driven by the buying organization but can be a collaborative effort. Information can include lead times, product descriptions, dimensions, attributes such as color, size, packaging requirements, selling features, order min/max, list and/or retail price and so on. Each of these is important for knowing space needed in a warehouse, space used on shipments, controlling freight costs to consumers and the attributes important for selling products to the end consumer.
Even with the collaborative effort it's not uncommon for a retailer to add proprietary information to the products within their network, so keep in mind what you're asking of your suppliers and how you'll manage the data. Such things as staging the item setup process to allow for these additional attributes, or modifying the information provided by the supplier (i.e. selling features). Lastly, it's not uncommon for an Online model to hold off from actually having a supplier's item added to their enterprise Item master until a customer places an order. Rather, they maintain a "preliminary" item file representing the online products. Once an order is created, the item is pulled from this temporary database and added to the retailer's Item master so that the PO can be created and sent to the supplier. That's certainly something to think about.
Use of the 832 does not have to just be part of the Ecommerce model, but should be as important to any DC or Store scenarios. I've noticed that there are companies utilizing the 832 EDI transaction, but only for adding new items. Obviously, once an item is created and information provided to a partner, you don't typically see changes made. However it surprises me that a buying organization is not interested in knowing that a supplier has discontinued a product. It seems like a no-brainer that advance knowledge that an item is going to be dropped allows for the retailer to stop ordering the item and allows the inventory to diminish. I'm sure there is some other reasoning that I'm not understanding.
In summary, recommend that your strategy for 2012 includes the use of item information from your suppliers. It's time to get this phase of the order process automated, and getting item information as a data feed seems like the logical method.