Grocer’s Extranet Gives Suppliers New Tool [LinkAGE / General Electric]
by Hope Katz Gibbs
LinkAGE: News about Electronic Commerce
One thing shoppers won’t find at Tesco, the largest food retailer in the United Kingdom, is empty shelves—not since it started rolling out the Tesco Information Exchange (TIE), an Extranet that will link the retailer all of its suppliers to increase product availability and reduce waste.
One such supplier, St. Ives, expects that TIE will enable the company to save 30 percent of its annual cost of product promotions.
“With TIE, our [promotion] forecasting improved significantly,” says Dan Rusga, national account manager. He adds that “sharing estimates with Tesco early on in the process highlighted any significant differences between our estimates and those of Tesco and ensured that we jointly agreed on the way forward.”
Developed in partnership with GE Information Services (GE), TIE is an Extranet that can be accessed through the Internet or through GE’s global network. Suppliers can access Tesco’s sales data electronically to tuck only their own products and to review specifications for new product lines. A combination of firewalls, service passwords, and security protocols ensures security.
Based at GE’s Supercentre in Amsterdam, Holland, the Extranet is an open-architecture solution that incorporates standard web, database, and corporate systems-integration components.
TIE trials earlier this year persuaded Tesco Divisional Directors Galloway of the Extranet’s effectiveness. One Tesco supplier participating in the trial spotted that demand for a certain product had reached 8,000 cases after two days, compared to the original forecast of 10,000 for the whole week.
The supplier increased the supply at short notice and realized a profit of almost 920,000-about US$30,000.
Galloway emphasizes that TIE is not a substitute for high-volume electronic data interchange (EDI) transactions. Raffier, it complements existing EDI networks, he says, by allowing the sharing of basic supply information. Suppliers now can take joint responsibility for planning, tracking, and evaluating promotions and, because they can access new specifications electronically, they can respond more quickly to shelve requests for new product lines.
“Ensuring our customers always get the products they came into Tesco for is key to our business,” Galloway attests.