Redmond, WA and Cincinnati June 28, 2001 Microsoft and Procter & Gamble recently announced that they have successfully piloted the first phase of a supply chain solution that can contribute up to a 50 percent reduction in inventory while delivering a 25 percent improvement in retail out-of-stock conditions. The two companies aim to combine the strength and supply chain experience of Procter & Gamble with the technical reach and experience of Microsoft in a collaborative process designed to deliver integration of disparate systems and processes within and outside the retailer's organization. The end result leverages intelligent information delivery to increase the speed of the supply chain through the use of standards-based solutions that benefit retailers, regardless of size.
With demand data as the catalyst and the key to the solution, the ultimate aim is to create a system that captures real-time data at the point of sale and is able to automatically trigger the necessary restocking, resupply and manufacture responses in the supply chain. From an implementation standpoint, the solution will deliver value for all members of the supply chain, with a supportable installation that is compatible with existing infrastructure investments, requires little management, and is cost-effective and able to deliver data throughout the supply chain continuously and in a customized manner.
"Together with Microsoft we are bringing a leg of our broader vision of a dynamic supply chain into reality," said Dick Antoine, global human resource and product supply officer at Procter & Gamble. "This pilot program will ultimately help retailers and supply chain participants of all sizes realize substantial savings and, most importantly, increase consumer satisfaction by ensuring that the products they want are on the shelves."
"We're not asking retailers to purchase yet another isolated system. We're giving them a technology framework that can finally tie their disparate systems into orchestrated business processes," said Ian Rogoff, vice president of the Worldwide Partner Group at Microsoft. "We are excited about the bottom-line business benefit the retail industry as a whole can realize through our industry partners and the vision brought to this project by Procter & Gamble."
As part of its collaboration with Procter & Gamble, Microsoft has delivered a set of BizTalk Server 2000 adapters that enable connection to the various point-of-sale systems used by grocery, drug and mass merchant retailers to collect near-real-time transaction data. The data is aggregated and transmitted for processing by a set of intelligent algorithms that identify potential out-of-stock items on a store-by-store basis. The detected out-of-stock information is transmitted back to store personnel using customized content rules. This approach offers flexibility by enabling notification via wireless communication devices, Pocket PC-based devices or existing retailer mediums.
Utilizing BizTalk Server 2000 enables the interoperability and integration necessary to accomplish business objectives across a variety of retailer platforms. In addition, BizTalk can manage the point-of-sale data feed as well as the customized retailer notification process.
"These proof-of-concept pilots are demonstrating the viability of the first phase of the project, which involves the packaging and intelligent evaluation of demand data at a store level to deliver a consumer demand signal (CDS) service. We've proved that both the technique for acquiring data and the delivery of it within the store works," said Jake Barr, associate director of supply chain innovation at Procter & Gamble. "You know you've been successful when the pilot is over, but the retailer participating in the pilot doesn't want you to take the solution out of the stores."