IQ 1996: HIGH-PRICED HIGH TECH

Byline: Matt Nannery

CHICAGO — Retailers who came to the IQ 1996 conference here last week found a lot of new technology, but some of it struck them as being redundant or prohibitively expensive.
Striving to improve distribution and make sure goods and information flow seamlessly from the point of manufacture to the retail sales floor, they looked at such advance developments as 2D bar coding and radio-frequency tagging, which carry high price tags.
At the same time, it was evident that retailers are working hard to push manufacturers and their own operations into a new technological age.
The conference, formerly called the Quick Response show, was sponsored by the Voluntary Interindustry Communications Standards committee and AIM USA. IQ 1996 was held at the Hyatt Regency hotel.
Bill Lane, manager of electronic commerce at J.C. Penney Co., said Penney’s found IQ 1996 useful for coaching manufacturers on producing accurate advance ship notices, or ASNs. Penney’s has set up a table at the show three years running.
“Most of our [merchandise] suppliers realize the benefits of [electronic data interchange], but we are trying to get them up to speed on ASNs,” he said. “We have suppliers that are doing a good job with ASNs and others who need more assistance. We are definitely trying to provide that assistance wherever and whenever we can. Accurate ASNs are in both our interests.”
An ASN is a bill of lading that is sent electronically to a retailer’s computer before the shipment arrives at the store’s receiving dock. Retailers have been clamoring for clean, accurate ASNs because they allow the retailers to receive shipments without opening every carton and checking and recording its contents.
But improving the accuracy of EDI documents wasn’t discussed only at networking tables. Retailers and merchandise suppliers discussed the topic over lunch, on escalators and in more formal conferences too. Both Wal-Mart Stores and Federated Department Stores booked hotel rooms so they could caucus with suppliers in a more controlled atmosphere.
Judith Kerch, director of electronic commerce at Sears, said the retailer was using the conference to iron out technology-related problems with apparel suppliers.
“The more both retailers and manufacturers keep their eyes focused on the consumer, the better off we all are,” she said. “Whenever you can take time out of the replenishment process, that’s a plus. We have to focus on technologies that can help us reach that goal.”
Both Kerch and Elaine Nedder, director of merchandising information for Quick Response at Boscov’s, agreed that it is retailers who are pushing hardest for efficient replenishment. And both seemed pleased with the movement manufacturers are making toward that end.
“I think in the last eight years or so the relationship between the retailers and the manufacturers has really changed,” Nedder said. “We do have demands and we do have a vendor violation program.”
Nedder said the merchandise suppliers who stopped for a rest at Boscov’s table weren’t only concerned with getting the proper electronic documentation out to their retail customers. More than ever before, she said, suppliers of all sizes were asking for timely POS reports to help plan production.
Over the past few years, many manufacturers have stepped up their efforts in the areas of electronic commerce.
“Everyone knows how much less paper we are all pushing today,” said Lane of Penney’s. “The situation is very different than it was two years ago. Suppliers who resist these changes are in the minority.”
But while most retailers relished the opportunity to iron out replenishment issues with their merchandiser suppliers, many felt some of the newer technologies offered down on the show floor were a bit ahead of their time.
“The tech people are pushing new concepts like radio-frequency technology and 2D bar coding before existing concepts like ASNs and the UCC/EAN-128 code are completely embraced,” Nedder said.
Technology vendors say the 2D code is superior to the 128 code because an entire shipping manifest can be encoded in a 2D bar code the size of a credit card. That information travels with the shipment to the retailer’s distribution center. When a combination of an ASN and the 128 code is used, the retailer must use the 128 code to reference order information sent separately via the ASN.
Penney’s Lane also questioned the need to implement 2D bar coding.
“We’ve discussed the 2D bar code internally,” he said. “Technologically, it can be done. And if there was a good business need for it, we would implement it. But at this point, I just don’t see where it would improve the process for us.
Lane was more receptive to another new technology floated at the show: embedding radio-frequency tags into garments. And while that technology is considered too expensive to be put into use yet, Lane feels it has a future in the apparel industry.
“That kind of RF technology can help with merchandising and security,” he said. “The tag could contain a wealth of information, including where something was made. That could help when import shipments are audited by the government. It would certainly help big time with it comes to reducing the number of illegal knockoffs coming into the country.”
Some apparel makers also had tables at the show.
Levi Strauss & Co. set up a Levi’s Link booth to offer services and support for the retailers Levi’s supplies.
“We offer vendor marking for our retailers, and we receive sales and inventory data from them so we can manage Levi’s products in their stores on our vendor-managed inventory program,” said Maggie Popplewell, service and support specialist at Levi’s. “We are here to help focus our retail customers on efficiency. It’s a good place to network with them. We are even doing VMI for mom-and-pops who don’t have electronic POS systems,” she said, noting that vendor-managed inventory systems “aren’t just for large retailers anymore.”
Quick Response Services, Sterling Software and GE Information Service, three on-line UPC catalog services, also took booths at IQ 1996. UPC catalog services are a bridge between retailers and suppliers. When UPC information on specific sku’s changes, apparel makers can update that information centrally on a UPC catalog service. A retailer can then connect to the service electronically and update its UPC listings. The services are gaining in popularity because without them, manufacturers would have to send UPC updates to all the retailers they work with. With UPC catalogs, they need only update the information in one central location.
Ronnie Moore, marketing communications manager at QRS, said that company is working with Levi’s to supply pieces of its UPC catalog to small retailers who are not connected electronically to either a UPC catalog service or Levi’s itself.
“There is a movement now to make technology accessible to the mom-and-pops,” she said.
Two other companies — ERIC and RagNet — were offering innovative services that allow retail buyers to view manufacturer lines on their desktop PCs.
“Upper management is more receptive to this kind of technology than the buyers are,” said Eitan Mashaich, ERIC president. “They have a larger outlook.” Mashaich said the company counts Penney’s, Dillard’s and Caldor among it clients.

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