Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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All Shaw’s managers who need to review product lists can simultaneously access information through browsers on their desktops, or information can be routed through workflow to a required series of reviews. Managers can also receive messages forwarded to mobile devices, then send reply messages to the supplier to accept, reject or comment on a new product to, for example, clarify a package or order size.
Retailers can program the VistaRetail system to provide retail supervisors with automated alerts that indicate when a manager has taken too long to complete a review of a product list. The web-based review process takes about two hours to learn, says Vacval, adding that each manager in the review process receives only the section of a product list that he or she needs to review. “VistaRetail is targeted for merchandise buyers and category managers, not tech people,” he says.
The VistaRetail application sits on a web server hosted by the retailer, which pays fees based on the range and number of messages it receives, including information on item dimensions, pricing and promotions under multiple product classifications.
VistaRetail is designed to integrate with data that suppliers have already integrated with UCCnet. For suppliers that have not integrated data with UCCnet, JDA offers the VistaKiosk version of VistaRetail, which provides a web page for suppliers to input product data by following instructions for entering definitions synchronized with UCCnet standards (see box, page 23.)
Other data synchronization applications for retail partners include QRS Catalogue from QRS Corp. QRS Catalogue, which synchronizes partner data through UCCnet, costs retailers a one-time start-up fee of $300, plus additional fees per synchronized item and per partner. Because the ongoing monthly cost to retailers is based on the number of suppliers and the number of items sourced from each supplier, that cost can vary widely among retailers. But the average cost for a mid-size retailer is about $2,500, says Renee d’Ouville, vice president of product strategy.
Partner communication systems like VistaRetail and QRS Catalogue support an integrated network flow of product data, so that suppliers’ electronic product catalogs can electronically and simultaneously distribute information to multiple managers within a retail organization as well as to multiple retailers. When data discrepancies occur, the simultaneous electronic distribution of information makes it more likely that retail managers will quickly notice errors and notify the supplier, since the review process isn’t slowed down by paper documents being transferred from one manager’s desk to another, Sheehan says. The supplier can then correct its database and immediately apply the fix to its distributed data.
Sheehan says Shaw’s expects to realize significant savings within a few years, once all suppliers are on board with the data synchronization system. He expects savings to coincide with estimates by consulting firm A.T. Kearney, which figures that retailers stand to save $700,000 through synchronizing and improving data flow with partners for every $1 billion in sales, while manufacturers will save $1 million for every $1 billion in sales.
The savings are tied to multiple improvements in the way product data are handled, experts say. Not only do retailers save time through a faster review and approval process of new product data, but increased accuracy in product data provides greater assurance that products are delivered, merchandised and priced according to plan-and reflected correctly in invoices. Retailers spend less time correcting records and renegotiating with suppliers to correct discrepancies in orders. “Companies pay for data synchronization projects with reduction in manual data entry and errors,” Meta Group’s Alvarez says. “If a company had close to 30% errors in its supply chain data, it would get a quick payback within a year.”
Retailers can begin to realize savings gradually as they go through the multi-step process of synchronizing product item data, then partner identifiers, then pricing and promotions. Reaching maximum payback also requires getting all suppliers on board-a process that can take two years or more to get all small suppliers connected. To expedite the process, system providers offer enlistment or “supplier enablement” services, through which the vendor will approach all unconnected suppliers and explain how they can get connected. “We’ll call each supplier to get the entire community to participate, so a retailer can get completely up on data synchronization within a year,” d’Ouville of QRS says.
One step at a time
Shaw’s is still in the initial phases of implementing JDA’s Vista Retail partner communication system. In the first phase, which it started exploring in 1999, it synchronized product data through Vista Retail and UCCnet. Shaw’s chose JDA’s VistaRetail partly because it was already using JDA’s Intactix shelf management system and because it felt JDA offered a strong platform for data communication, Sheehan says. Having the Intactix application provided for instant integration within the JDA platform. JDA also provides integration tools and services for building integration with other non-JDA applications. Retailers can also use data translators from companies such as Ascential Software and Sterling Commerce to integrate data from back-end applications including ERP, order-management and supply chain systems.
Shaw’s is now working through the second phase, building on its product data synchronization to improve communications with particular suppliers like Kraft. This involves synchronizing data on supplier identifications, including global locator numbers, or GLNs, so that the retailer can be sure it’s connecting new product data to the correct supplier to keep accurate supplier and billing records.
By the end of this year, Shaw’s expects to complete the third phase, which will coordinate pricing and promotions with its suppliers-the step that will provide the greatest financial benefit by assuring that products are listed for sale at the correct price without having to input corrections, Sheehan says. “Synchronized pricing is where the real benefits are,” he says. “The biggest data errors occur when there is a question over how to correctly price an item.”