Albertsons Joins UCCnet

CEO sees supply chain data synchronization as key to growth in increasingly competitive grocery sector

Lawrenceville, NJ — March 27, 2003 — Grocer Albertsons is set to implement the UCCnet item registration and data synchronization services for its stores nationwide in a move that the company's CEO sees as a key to the chain's growth in the tough grocery sector.

Albertsons is one of the world's largest food and drug retailers, with annual revenues of approximately $38 billion. Based in Boise, Idaho, the company employs more than 200,000 employees at more than 2,300 retail stores in 31 states.

Albertsons, one of the first major U.S. food retailers to implement the UCCnet's registration and synchronization services, will begin implementation this year and will issue communications requesting that its suppliers join UCCnet and prepare to synchronize item information. The company plans to provide information in the near future to its partners on the benefits of UCCnet and directions on how to subscribe.

"Albertsons is dedicated to partnering with UCCnet and our suppliers in this industry-changing technology solution," said Larry Johnston, Albertsons CEO and chairman. "UCCnet global registration and synchronization services will enable us with the integrated data to manage our supply chain effectively as we build our growth momentum in an increasingly competitive marketplace."

Glenn DuBois, executive vice president and chief operating officer for UCCnet, predicted that Albertsons' move would help take costs out of the retail supply chain for all participants in the UCCnet community.

Albertsons said the services would enable it to streamline the collection of item data from their suppliers by using UCCnet's GLOBALregistry as a single source to provide supplier and product information to all departments within the company.

"Our company is committed to driving technology solutions that enable us to not only meet, but to exceed the demands and challenges of today's competitive retail marketplace," said Bob Dunst, Albertsons' executive vice president and chief technology officer. "Our relationship with UCCnet will enable new supply chain efficiencies that will help us more effectively meet our customers' shopping needs."

An industry study conducted by A.T. Kearney estimated that $40 billion, or 3.5 percent, of total sales lost each year are due to supply chain information inefficiencies. Specifically, the study showed that 30 percent of items in retail catalogs have data errors, which cost between $60 and $80 each and consume 25 minutes of manual cleansing per stock-keeping unit (SKU).

Other findings revealed that 60 percent of all invoices generated errors and 43 percent of all invoices resulted in deductions. During the fall of 2002, A.T. Kearney conducted another study of three suppliers and three retailers that resulted in the conclusion that financial benefits could be realized in the neighborhood of 10 basis points or 0.1 percent of sales dropping to EBIT (earnings before interest and tax). The benefits were the result of business process changes adopted by the retailers and separately by the suppliers who have implemented these UCCnet industry utilities.

To alleviate these costly errors, UCCnet enables registration and synchronization of item information, such as weight and dimensions, by providing a repository for standardized item, location and trading partner data. Suppliers load item, location and trading partner information into the UCCnet GLOBALregistry. UCCnet checks the data for compliance to industry standards and synchronizes it with demand side partners ensuring that all trading partners are using identical, updated, standards-compliant data.

UCCnet said its services would enable suppliers and their retail partners to reduce administrative errors in invoice pricing, purchase orders, product delivery and scanning accuracy. In addition, retailers should be able to increase the speed of getting new products to market and facilitate changes to existing item information. UCCnet also asserted that synchronized data in a standard format provides a foundation for realizing the cost savings value of such e-commerce tools as scan-based trading and CPFR.