The following are two common questions about Scan Based Trading (SBT).
How does SBT differ from traditional supply chain models?
Traditional business-to-business (B2B) trading in the supply chain has been delivery-based. Invoice quantities were established by the quantities delivered to the retailer by the supplier. Scan Based Trading changes that. In SBT, the business-to-business invoice quantity is established by the quantities sold to consumers when they check out.
For the retailer, it is in essence an instantaneous buy-sell transaction; consequently, the retailer no longer invests resources in SBT inventories.
For SBT suppliers, it means that revenue is delayed by the amount of time it takes product to move between their old selling point and their new one. That’s a penalty, and it’s one reason why SBT, at least for now, is recommended for faster-turning DSD products. However, it also means that there’s no need to check-in on arrival, and therefore no need to confine deliveries to a narrow delivery window (which means better asset utilization and no waiting time). It also means that promotions happen at the point of sale to consumers, not before.
In a recent scan-based trading pilot* program, trading partners that used Park City Group SBT:
Experienced a 3%-4% sales increase compared to control stores
Controlled shrink to 0.3%
Saved suppliers 20-30 minutes per delivery
Saved retailer receivers 10-15 minutes per average delivery
Completely eliminated deductions
* Source: GMA DSD Committee e-Commerce and SBT Pilot Report.
How does Inventory & Shrink fit into all this?
Park City Group can help create and manage a more profitable trading partnership.
Working together with Item Movement, Inventory & Shrink provides:
Product movement over time, with exception reporting
Invoices based on scan data
Shrink calculation
Buy-back calculations
Perpetual inventory