Coles Myer surges ahead on supplier B2B

Coles Supermarkets is forging ahead with implementation of the EANnet electronic product catalogue, a supply chain network expected to end the industry's reliance on paper-based ordering.

Sean Sloan, project manager, business planning, Coles Supermarkets, told an EANnet seminar in Sydney on Wednesday the grocery chain recently reached 300 of its suppliers being EANnet live, and was working on another 65.

The company has been working on moving suppliers to EANnet for over three years. Grocery chains expect EANnet to end administration costs associated with the paper-based universal buying form (UBF) used for purchase orders, and align product and ordering data more accurately with suppliers.

"EANnet is certainly a key enabler for all the projects from a B2B perspective within [Coles] Supermarkets," said Sloan.

"[It] is a challenging project, to say the least. Our B2B program is dependent on suppliers being EANnet live."

Developed by industry, EANnet sees suppliers enter product and price data into the catalogue according to validation rules, which the buyer (retailer) may then access. Coles, Metcash and Woolworths have championed the system as it puts the onus on suppliers to ensure the accuracy of price and item data, rather than the retailers having to fix mistakes at the end of the supply chain.

EANnet interfaces with Coles' merchandise system it implemented last year, RETEK.

"Previously, believe it or not, we actually printed off everything you sent us and then re-keyed it in, but thankfully we've moved away from that," said Sloan.

"Our goal is to phase out UBFs as rapidly as we possibly can." This would see major cost savings, he said.

However some at Coles, and in the industry, have yet to appreciate the new technology.

"Yes we do have some change management issues within CML [Coles Myer Limited] Supermarkets that we're working through," said Sloan.

"[But] I think it's critical to note that it's on both sides of the fence, and people just need to understand that we've got people who've been in buying roles now for 15 years and they really love that UBF. They love it!"

He acknowledged though that there were some instances where Coles and suppliers would have to revert to the old system temporarily.

"What we find is that [product] lines that have previously been deleted, and the buyer says 'oh all of a sudden I need to have that line back', unfortunately we're in a situation where to get that line back in and able to be used on EANnet, we need a universal buying form for that.

This was "an exception to the rule", said Sloan. "Unfortunately that's where we're at."

He insisted EANnet was the way of the future for Coles and its suppliers.

"We're now in a time of change, and the universal buying form's got to go, and we've got to embrace e-commerce. And one of the things that suppliers and buyers have got to understand is we're now no longer dealing with this critical piece of paper, we're dealing with a PRICAT [pricing catalogue] message."

EANnet was imperative to the future of business-to-business e-commerce at Coles, according to Sloan.

"Unless we have item and price synchronisation, B2B [at Coles] simply won't work," said Sloan.

"It simply won't work because our model is we'll pay on what is on our purchase order, and that purchase order cost is derived from EANnet.

"So the recipient-created tax invoice, which is at the settlement point, that price comes out of our core system, and that core system is taking our price out of EANnet."

EANnet also made tracking and tracing orders a lot easier for all parties, according to Sloan.

"One of the benefits of our B2B model at the moment is you'll be able to track and trace all the documents throughout the whole purchase order-settlement process via a track and trace system," he said.

Coles Myer Liquor is to pilot its first EANnet live supplier in August.

Other Coles Myer companies like Kmart and Target were yet to implement EANnet, said Sloan.

Daniel Kochanowicz, business development manager, eBusiness, Woolworths, told the seminar Coles was probably leading grocery chains on EANnet around the world.

Woolworths had been working on EANnet for 10 years, he said.

Woolworths has instead been developing its electronic core records interface (eCRI) system to utilise an upcoming version of EANnet.

eCRI would accommodate Woolworths suppliers that did not use barcodes, he said.