September 1, 2006

Wegmans gets in sync with suppliers

By DC Velocity Staff

High-end grocery chain Wegmans Food Markets has found a way to chop more than $1 million in redundant costs from its supply chain, and it doesn't even involve RFID. In fact, all the grocer had to do was work with its major suppliers to ensure that all parties were using the same electronic product data.

By investing in global data synchronization, Wegmans, which operates 69 high-end grocery stores on the Eastern seaboard, eliminated $1 million in redundant labor and inventory carrying costs from its distribution network. In addition, Wegmans reports that it was able to boost productivity by an estimated 7 percent as a result of expedited direct store delivery check-ins at its retail sites.

Wegmans' experience with global data synchronization was the subject of an in-depth study by consulting firm Accenture, the Food Marketing Institute, the Grocery Manufacturers Association and software firm 1SYNC. Seven major suppliers took part in the pilot program: Coca-Cola Co., General Mills, Hershey Co., J.M. Smucker Co., Nestlé, PepsiCo Inc., and Procter & Gamble. According to the study, Wegmans was not the only beneficiary of the synchronization effort. It notes that global synchronization helped one supplier shave $2.2 million off its annual transportation costs by correcting a weight error on a single item.

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