Aunt Millie's Successful Scaling of Scan Based Trading
With seven baking operations located in Indiana, Michigan and Ohio, family-owned Aunt Millie's Bakeries Inc. produces baked goods such as bread, rolls, English muffins, donuts, and bagels. The company's products are distributed throughout the United States, primarily in the Great Lakes region of the Midwest.
This is a story about how Aunt Millie's successfully scaled its Scan Based Trading (SBT) program from 35 stores to more than 400 stores with a major Ohio-based grocery retailer.
At a Stale Mate
If you are unfamiliar with the term, SBT, it is a commerce model where the bakery maintains ownership of its inventory until it scans at point of sale (POS).
Aunt Millie's Bakeries was asked to participate in SBT with a major Ohio-based grocery retailer that offered attractive payment terms, including payment by EFT versus check. Even though Aunt Millie's had an enterprise SBT solution from Prescient in place since 2001, the company thought a roadblock might exist in conducting the program with a grocery chain that was not a member of the Prescient community.
But with Prescient SBT Simulation functionality, Aunt Millie's can conduct the program with any retailer, whether it is within the community or not. The application allows Aunt Millie's to use the same business process as well as data exchange, making the SBT program easily expandable. Additionally, SBT Simulation enables the grocery retailer to transmit Aunt Millie's POS data directly to Prescient as if it were sending it directly to the supplier.
The Best Thing Since Sliced Bread
In October 2007, Aunt Millie's rolled SBT out to 35 stores in the Great Lakes region. The bakery monitored shrink, cost discrepancies and scan sales reports for the first few weeks to ensure there weren't any hiccups in the process and that the rollout was going smoothly. With built in reports and alerts, Aunt Millie's was comfortable with the application's monitoring system and the results they were seeing in the initial rollout.
Within six months, Aunt Millie's began rolling out SBT to three additional mid-west divisions of the grocery retailer, including a new banner. At the current pace of rollout, the company will have more than 400 stores on SBT with this major retailer by the end of June 2008.
Rising to the Top
Aunt Millie's most recent results with this retailer show an improvement in shrink, which is now at .03 percent. This is due in part to the reporting capabilities of the application, which has given Aunt Millie's visibility into product activity, down to the store level. That level of visibility led to the discovery that some route drivers were not properly invoicing or crediting, impacting sales and inventory. With SBT, reporting, invoicing and crediting can now be monitored and, when necessary, corrected easily.
"We recognize the time savings scan based trading affords our route drivers, especially at delivery. We've been able to increase service to our retail customers and we enjoy a single process in managing our scan based retailers by using Prescient's Enterprise SBT Solution," says Donna Gross, manager, Aunt Millie's Bakeries.
Aunt Millie's sees future potential and hopes to decrease its number of routes through the SBT process. With wider receiving windows and the elimination of product check-in, Aunt Millie's is able to more efficiently schedule its routes. In an industry where time and transportation costs are at a premium, the application rollout has provided tremendous tangible benefit.
Aunt Millie's responds to both the consumer and retail partner needs. New item introductions and price changes are part of everyday practice. Through the SBT process, data is synchronized between the retailer and supplier and regular item and price reviews are conducted by Aunt Millie's. As a result, cost discrepancies can be recognized quickly and corrected, ultimately reducing invoice deductions that cost time and money for both partners to resolve.
Rapid implementation and rollout has allowed Aunt Millie's to experience substantial operating benefits in its recent SBT program expansion. Because Prescient provides an enterprise solution of SBT and SBT Simulation that provides the foundation for performing the program with any retail trading partner, Aunt Millie's can continue to grow the program with this grocery chain and any other retail partners in support of its business objectives.