There are several reasons. 852s are loaded with data that if simply dumped into an Excel spreadsheet or some other flat file would offer little insight without hours and hours of manual manipulation and study. Besides, the cost of electronically transmitting such data-intensive files on a regular basis can be cost-prohibitive.
There are other, more complex reasons as well. Scott Bolduc, senior supply chain strategist with SPS Commerce, says some retailers are concerned with sharing such detailed sales data with suppliers who may be directly selling themselves, either through brick-and-mortar stores on online. “So the suppliers are actually competitors, and by giving information about how well items are selling, or even pricing information, means the retailers are giving that to competitors,” Bolduc says.
Also, while some retailers – particularly grocery stores – have vendor-managed inventory (VMI) relationships with each other that leverage POS data and 852 files to determine what supplies need to be shipped, others are not interested in such relationships. VMI is a backward replenishment model where the supplier does the demand creation and demand fulfillment. In this model, instead of the customer managing his inventory and deciding how much to fulfill and when, the supplier does. In a conventional fulfillment process, sales are typically forecasted via replenishment systems using historical sales data, and the retailer tracks this along with inventory information. Purchase orders are created and sent to the suppliers.
852s and POS data don’t have to be used solely for VMI relationships. But if not, then the partners need to agree to that and in some cases enact changes in their EDI systems to ensure 852s aren’t automatically used to create advance shipping notices (ASNs), Bolduc notes.
Despite the concerns, POS and 852 data can provide real value. For example, suppliers can leverage and analyze the sales data and stock position data to better measure marketing performance and how to more accurately allocate advertising dollars. They can know which products are selling best, at which retailers’, in which regions of the country, or even at what times of the year. Sales volumes can be analyzed, and trends can be more easily spotted and even predicted.
Such granular and consistent visibility into sales data also helps suppliers better plan their supply chains and manufacturing processes. “As vendors know more, they can make sure their inventory levels are up appropriately so they can make sure the next shipment is ready to go when it needs to,” Bolduc says. “Lead times can be shrunk down and that in turn helps lower inventory levels on the retailer side, so the cost of inventory goes down.”
Bolduc suggests retailers who have yet to take advantage of increased collaboration with their suppliers by sharing POS data and 852s select a few preferred partners to start. “Watch how such collaboration affects you, look at vendor fill rates when you start, and then look at those rates two months later and see if the fill rates go up. If there’s a value, you may want to look at offering it to larger group of suppliers,” he says.
Although there is reluctance, many of the large retailers are sharing POS data and 852s as part of their EDI initiatives. Drug store chains CVS Caremark Corp. and Walgreen Co., for example, do, as do many of the grocers including The Kroger Co. and Safeway Inc. Home improvement chain Lowe’s Companies Inc., does. On its loweslink.com site for suppliers, the retailer says vendors receiving the 852 data are expected to use the information to improve production planning. More specifically, Lowe’s advises that, “Visibility to item activity should assist in the identification of those items deserving increased service levels and fill rates and those deserving a reduction in inventory. To receive 852 data, vendors must document how the data will be used and how Lowe’s will benefit. Request only the amount of data that will be used effectively to benefit both parties.”
There are a number of avenues retailers can pursue to share POS data and 852s. SPS Commerce provides the capability as part of its TPIC (Trading Partner Integration Center) by collect 852 POS data from retailers, and combining it with other information provided as part of its EDI transaction processing. To date, SPS Commerce, has more than 120 retailers and grocers who are sending their POS data (often in the form of an 852 transaction) to SPS Commerce to populate its Trading Partner Intelligence for POS Service. Vendors use the Web-based service to monitor their in-store inventories, identify locations where sales are over or under-performing, and collaborate with the retailers’ buying organizations to improve sales and prevent stock-outs. Retailers include ACE Hardware, Amazon.com, Belk, Best Buy/ Best Buy.com, Bloomingdale’s, Dollar General, Home Depot, JCPenney, PetSmart, REI, Safeway, Sam’s Club, Schnucks, Sears, Target, Toys”R”Us, Walgreens, Wal-Mart, Wegmans and West Marine, to name a few.
There are others who offer similar services and EDI value-added-networks with 852 capabilities, including GXS, EasyLink Services, Sterling Commerce, TIE Commerce, RedTail Solutions, ContentWorks EDI Services, DICentral and KleinSchmidt.
There are also a number of software companies who offer EDI systems, translators and services that help companies gather and then consume POS and 852 data. For example, Data Masons Software offers its Vantage Point 852 Product Activity Database and Reporting Module. eBridge Software offers a web-based integration-as-a-service (IaaS) for EDI that includes functionality for 852s. Accelerated Analytics (which works with Lowe’s) provides a solution, as do the big ERP vendors SAP and Oracle and even Microsoft.