data sharing best practices - tibersoft · data sharing best practices in a contracted price...
TRANSCRIPT
Data Sharing Best Practices in a Contracted Price Relationship
DATA SHARING BEST PRACTICESin a contracted price relationship
Data Sharing Best Practices in a Contracted Price Relationship
About This PaperIn every Manufacturer meeting we’ve had in the several years, we’ve recommended
requesting electronic Location level trade claims to establish line-of-site tracking for
all contract business. Admittedly, this was difficult advice to follow. Until recently few
Distributors, GPOs, or Chains had either the willingness or the capability to do this.
However, the last 18 months have seen much improvement towards Location level
claims as a group of leading Manufacturers – gratefully some of them Clients - have
smoothed the path for others to follow. Location level claims often require negotiation
but are now widely available
This white paper is intended to help the next wave of Manufacturers, who like the
early adopters before them, understand the implications of market saturation and
the increasing percentage of contracted sales in foodservice.
We hope that this paper will speed the evolution of Location level claims into a standard
in the marketplace. This information is the key enabler to Operator Intelligence and
acheiving prosperous growth once again.
Chris Martin, CEO Tibersoft
Data Sharing Best Practices in a Contracted Price Relationship
Contents
Background 4
Getting the Data 5
Location Level Trade Claims 5
Location Level Member Lists 5
Location Level Talking Points 6
Summary 7
Exhibits 9
Exhibit 1. Contract Language 9
Exhibit 2. Billback Example Data Fields 11
Exhibit 3. Rebate Claim Example Data Fields 18
Exhibit 4. Member List Example Fields 21
References 22
Data Sharing Best Practices in a Contracted Price Relationship
BackgroundUnderstanding your foodservice channel at the unit or Location level is vitally
important for two reasons:
1 The foodservice channel is now dominantly conducted by contracted price.
Contracted business has grown to 60% of total volume and is headed to
80%. Tracking Location and product level compliance is the only way to
determine why sales might be down within a specific program or contracted
Operator group.
2 The domestic foodservice market is saturated. Consider the ratio of the
US population ($316 million) to the number of foodservice Locations (~1
million). On average, a mere 316 people must satisfy all the revenue needs
of any given Location. Opening a new Location requires convincing some
other Location’s 316 people to come to your Location! Tuning and mastering
sales execution to existing customers makes more sense than relying on
finding and selling to large numbers of new Locations.
Historically, Manufacturers have contracted with Operators or GPO’s to facilitate
some control, via volume pull, over the Operators buying patterns. But contract
administration was cumbersome. Still, most Manufacturers were happy with the
effect of the pull and not particularly concerned with gathering the data available
within the claim. As systems progressed and electronic data became more available,
reporting by Program or by Operator Headquarters, has become more widely used.
But, the forces of market saturation and contract pricing have promoted the need
©2013, Tibersoft Corporation Page 4
Data Sharing Best Practices in a Contracted Price Relationship
to determine what Locations are buying product
or not buying product. Moving forward, Location-
level knowledge is critical to protecting and building
volume.
There is also the issue of double dipping trade
dollars. One example of this is when Locations
with direct contract pricing join a GPO and receive
multiple trade discounts.
Getting the DataLocation Level Trade ClaimsA proven way to acquire Location level data is through Location level trade claims.
Availability of the data has dramatically improved. Contract signing – new or renewal
- is the best time to build Location level data into the trade claims. Exhibits 2 & 3
suggest specific data fields for Location level claims for Operator, Distributor, and
GPO contracts.
Location Level Member ListsKnowing which Locations are not buying contracted items is established by obtaining
Group Member Lists. If an Operator Group (Chain, GPO, etc.) has 1,000 Locations
and a Manufacturer is selling to 600 of them, the remaining 400 are ‘whitespace’
Locations. It is much easier to sell an incremental case to an existing customer than
to sell those same cases to a new customer. Knowing the full list of Locations is the
The forces of market saturation
and contract pricing have
promoted the need to determine
what Locations are buying or not
buying.
©2013, Tibersoft Corporation Page 5
Data Sharing Best Practices in a Contracted Price Relationship
only way to uncover these opportunities. Exhibit 4 suggests data fields for sharing
Location level Member Lists in every Operator and GPO contract.
Location Level Talking PointsWhile Location level data sharing is becoming the standard within the industry, not
all Distributors and Operator Groups understand the necessity and the benefits of
this practice. While in discussions with your Distributors and other data providers,
consider using the following talking points:
Keep Foodservice Strong Foodservice has a 3x cost disadvantage compared to Retail.
The percentage of consumer food dollars spent on foodservice is down from 50%
in 2008 to 46% today. The industry must work together to give the Operator every
economic and service advantage. To provide that advantage Manufacturers need to
know Location level information.
Compliance of Locations within a group provides benefits to both the Manufacturer
sales force and to the Operator Group. Noncomplying Locations reduce rebate
revenue to the Operator Group and the consistency of the product being sold to
Locations.
Informed Partners When the sales and support resources know exactly where the
product is being shipped this can inform a number of specific actions that directly
benefit the customer. Manufacturer resources in the field can help support new
product introductions. Show a sample report of exactly how the sales person will be
able to assist the Operator once the data is shared.
©2013, Tibersoft Corporation Page 6
Data Sharing Best Practices in a Contracted Price Relationship
For Best Price Trade spend should be an investment not a cost; the Customer is
asking for a discount in return for doing something - usually buying more, and not
buying a competitor’s product. Manufacturers require this information to be sure
these promises are kept.
The Auditors Let your Distributors and Operator Groups know that auditors are
requiring Location level detail on shipping to validate trade spend dollars. Audit
compliance is a requirement.
Common Practice Although not yet standard practice, virtually all major Operators,
GPO, and Distributor organizations have agreed to send Location level detailed claims
to their Manufacturer partners. The argument from the Customer that “you are the
only one asking” simply is no longer true.
Why Not? Turn the question around, and ask why not share this information? What
valid reason exists for withholding this information?
SummaryAs the Foodservice Industry as a whole consolidates and moves toward a higher
percentage of products being purchased and claimed by Groups at a predefined
contract price, more focus on the Location details will sharpen sales execution and
ensure that the right trade dollars get to the right Customers.
Knowing where to find these sales comes from the whitespace analysis made by
Location level claims and Member Lists.
As new GPO’s are considered for contract pricing, ensuring that Locations are only
©2013, Tibersoft Corporation Page 7
Data Sharing Best Practices in a Contracted Price Relationship
receiving the benefits of one program is critical. Part of that negotiation must include
the ability to validate the member list at the Location level.
Having clear and explicit language in the Manufacturer – Customer contracts develops
the expectation and enables the discipline to optimize foodservice channel sales.
©2013, Tibersoft Corporation Page 8
Data Sharing Best Practices in a Contracted Price Relationship
ExhibitsAs you examine the following Exhibits, you will see that we have identified each field
as ‘Required Yes or No’. The ‘Required = Yes’ fields together make up the absolute
minimum requirements to accomplish Location level Operator intelligence. If not all
fields are available, push for these.
Exhibit 1. Contract LanguageSummary of Billback Claim Requirements
1 Agreement information with the description and the Manufacturer’s
Agreement Number.
2 Distributor OpCo information
3 Operator Location Group Name (GPO), Location Name, Location customer
number and Location Address.
4 Location Invoice information including invoice number and invoice date
5 Product information with Distributor SKU and Manufacturer SKU with
descriptions.
6 Other watch outs are – no aggregation to a subgroups, no PO Boxes.
Summary of Rebate Claim Requirements
1 Agreement information with the description and the Manufacturer’s
Agreement Number
2 Distributor OpCo information
3 Location Name, Location customer number and Location Address
©2013, Tibersoft Corporation Page 9
Data Sharing Best Practices in a Contracted Price Relationship
4 Location Invoice information including invoice number and invoice date
5 Product information with Distributor SKU and Manufacturer SKU with
descriptions
6 Other watch outs are – no aggregation to a subgroups, no PO Boxes
Summary of Member List
1 Member Group information
2 Member Location Name and Address
3 Active flag with start and end dates
Preferred File Transmission Methods - Electronic file is the preferred method of claim
submission via EDI or FTP retrieval - File Formats
1 EDI
2 Formatted Text Delimited
3 CSV (Excel)
4 Excel files must be Excel 2007 or newer, XLSX – Yes, XLS – No
©2013, Tibersoft Corporation Page 10
Data Sharing Best Practices in a Contracted Price Relationship
Exhibit 2. Distributor Billback Example Data FieldsThe data defi ned is this example should be required if shown as mandatory for all electronic submissions.
Category Field Name Comment Required Field Type ExampleAgreement Agreement Descrip-
tionYes
Agreement Agreement Number ID number assigned by the Manu-facturer
Yes
Distributor Distributor Name Yes Character SYSCO CORPORATIONDistributor Distributor ID A value that uniquely identifi es the
Distributor. DUNS number is pre-ferred. Or, a Distributor-provided value may be used.
Yes Character 006154600
Distributor Distribution Center Name
Yes Character INDIANAPOLIS
Distributor Distribution Center ID
A value that uniquely identifi es the Distributor. DUNS number is pre-ferred. Or, a Distributor-provided value may be used.
Yes Character 006154611
©2013, Tibersoft Corporation Page 11
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleDistributor Distribution Center
GLNSome Distributors do now have Global Location Numbers, an Indus-try-standard unique identifi er for a Distribution Center location. Spon-sored by the UniformCode Council (UCC). Code starts with the Distributor company’s EAN.UCC prefi x. The rest of the code is declared by the Distributor compa-ny to identify (uniquely) a location within the Customer’s organization, and is then registered within the UCCnet GLOBAL registry™.
No Character 0034678998769
Distributor Distributor Remit to Address Line 1
No Po Boxes No Character
Distributor Distributor Remit to Address Line 2
No Po Boxes No Character
Distributor Distributor Remit to City
No Character
Distributor Distributor Remit to State
No Character
Distributor Distributor Remit to Zip
No Character
Operator Parent Distribution Center’s “Operator Chain” Name
Distributor Center’s Name for Op-erator Chain to which Customer Location belongs (if any). This Name should be unique across all Chains tracked by the Distributor.
Yes Character Taco Bell
©2013, Tibersoft Corporation Page 12
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleOperator Parent Distribution Center’s
“Operator Chain” IDDistributor Center’s Identifi er for Operator Chain to which Customer Location belongs (if any). This ID should be unique acrossall Chains tracked by the Distribu-tor.
Yes Character 12345
©2013, Tibersoft Corporation Page 13
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleOperator Loca-tion
Bill To Account Name
Distributor Center’s Name for Cus-tomer’s facility or location (e.g. store, outlet, component, location). This fi eld only refers to the Custom-er Facility as a whole(e.g. “Taco Bell Westborough”), not to distinctions between multiple “ship-to” addresses or accounts associated withthat single Customer Facility (e.g. “Loading dock A for the Restaurant account within Taco Bell Westbor-ough”). If Distributor’s Customer Chain Name is provided, provide a Customer Facility Name that is unique across the Chain; else, pro-vide a Customer Facility Name that is unique across all Customer Facili-ties and Chains. Example1: Customer Chain Name is “Taco Bell”; Customer Facility Name is “Westborough”, not “Westborough Restaurant” or “Westborough Room Service”. Example2: No Customer Chain Name; Cus-tomer Facility Name is “Taco Bell Westborough”.
No Character Taco Bell Westborough
©2013, Tibersoft Corporation Page 14
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleOperator Loca-tion
Bill To Account Number
Distributor Center’s Identifi er for the Operator Account to which this invoice is charged. A Operator facili-ty with several accounts (which may or may not be denoted by separate Operator Destination Names) would have a diff erent Operator Account ID for each.
No Character 98765432
Operator Loca-tion
Bill To Operator Code
The Operator’s Code for this Bill To Account Name and Number. Operator’s own Identifi er for the Operator’s specifi c delivery location (e.g. the Chain’s Store Number), if known.
No Character 4444444444
Operator Loca-tion
Location Name Yes Character Restaurant
Operator Loca-tion
Distributor Account Number
Yes Character 199902
Operator Loca-tion
Operator Location GLN
No Character 0012345678913
Operator Loca-tion
Ship To Operator Address Line1
Yes Character 40 S. ALABAMA ST.
Operator Loca-tion
Ship To Operator Address Line2
Yes Character Suite 27
Operator Loca-tion
Ship To Operator City
Yes Character INDIANAPOLIS
Operator Loca-tion
Ship To Operator State
Yes Character IN
Operator Loca-tion
Ship To Operator Zip
Yes Character 46204
©2013, Tibersoft Corporation Page 15
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleOperator Loca-tion
Ship To Operator Country
Yes Character USA
Invoice Summary Distributor’s Invoice Number
Yes Character 507130319
Invoice Summary Distributor’s Invoice Date
Yes Date 07/21/2005
Invoice Summary Invoice Total Amount
Yes Numeric 00000059825 (is $598.25)
Invoice Detail Substitution Flag Contract would need to allow sub-stitutes
No Character
Invoice Detail Distributor Product Number
Yes Character 1102730
Invoice Detail Quantity Best practice to carry out to 3 deci-mal places
Yes Numeric 64.325
Invoice Detail Rate Amount that to be billed back to the Manufacturer. Can be up to 4 deci-mal places.
Yes Numeric 0000020000 (rep-resents item price of $2.0000)
Invoice Detail Contract Price Dollar amount or percentage No Numeric 19.00Invoice Detail Distributor Cost
BasisDistributor’s cost at time of sale to the end user
No Numeric 21.00
Invoice Detail Extended Rate Quantity x Rate Yes Numeric 521.99Invoice Detail Credit/Debit Flag CR’ represents a credit. ‘DR’ rep-
resents a debit. Value is indepen-dent of the sign of the price and quantity fi elds. Applies to extended price only.
Yes Character CR
Invoice Detail Product Return Flag No Character YInvoice Detail Unit of Measure Yes Character CS or LBInvoice Detail Return Reason Code No Character Spoiled
©2013, Tibersoft Corporation Page 16
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleInvoice Detail Original Invoice
NumberFor tracing Credit invoices No Character 507130319
Product Pack - Each Size Not as desirable is a combined fi eld with size, measure and count in one fi eld
Yes Numeric 12 (for 12-ounce cans)
Product Pack - Each Measure Yes Character FL-OZ (use the singular form always)
Product Pack - Each Count per Unit of Measure
Yes Numeric 24 (for 12-ounce cans)
Product UPC Number Yes Character 1072158203973Product GTIN Number Case GTIN No Character 10721582039734Product Manufacturer’s
Product CodeYes Character 6667989
Product Manufacturer’s Name
Yes Character Coca Cola
Product Distributor’s Ven-dor Number for the Manufacturer
Used to diff erentiate product that is dual sourced for the same Manufac-turer item
No Character 123
Product Manufacturer’s Brand Name
Yes Character Dasani
Product Distributor’s Product Description
Yes Character Purifi ed Water
Product Redistributor Name No Character Dot FoodsProduct Distributor Product
CategoryNo Character Fresh
Product Operator Product Category
No Character Contract
©2013, Tibersoft Corporation Page 17
Data Sharing Best Practices in a Contracted Price Relationship
Exhibit 3. Rebate Claim Example Data FieldsThe data defi ned is this example should be required if shown as mandatory for all electronic submissions.
Category Field Name Comment Required Field Type ExampleAgreement Agreement Description Distributor Agreement de-
scriptionYes Character
Agreement Agreement Number Distributor Agreement ID YesAgreement Manufacturer Agree-
ment DescriptionAgreement Description from Manufacturer Agreement
Yes Character
Agreement Manufacturer Agree-ment Number
ID number assigned by the Manufacturer
Yes
Distributor Distributor Name No Character SYSCO CORPORATIONDistributor Distributor ID A value that uniquely iden-
tifi es the Distributor. DUNS number is preferred. Or, a Distributor-provided value may be used.
Yes Character 006154600
Distributor Distribution Center Name
Distributor Name fi eld is not required, but needs to be in-cluded in this fi eld along with the DC Name
Yes Character SYSCO INDIANAPOLIS
Claimant Claimant Remit to Ad-dress Line 1
No Po Boxes No Character
Claimant Claimant Remit to Ad-dress Line 2
No Po Boxes No Character
Claimant Claimant Remit to City No CharacterClaimant Claimant Remit to State No CharacterClaimant Claimant Remit to Zip No Character
©2013, Tibersoft Corporation Page 18
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleOperator Lo-cation
Ship To Operator Ad-dress Line1
Yes Character 40 S. ALABAMA ST.
Operator Lo-cation
Ship To Operator Ad-dress Line2
Yes Character Suite 27
Operator Lo-cation
Ship To Operator City Yes Character INDIANAPOLIS
Operator Lo-cation
Ship To Operator State Yes Character IN
Operator Lo-cation
Ship To Operator Zip Yes Character 46204
Operator Lo-cation
Ship To Operator Coun-try
Yes Character USA
Invoice Sum-mary
Distributor’s Invoice Number
While not generally available, these fi elds support easy research and clearing of audit issues for both Customer and Manufacturer.
No Character 507130319
Invoice Sum-mary
Distributor’s Invoice Date
No Date 07/21/2005
Invoice Sum-mary
Invoice Total Amount Yes Numeric 00000059825 (is $598.25)
Invoice Detail Substitution Flag Contract would need to allow substitutes
No Character
Invoice Detail Quantity Best practice to carry out to 3 decimal places
Yes Numeric 64.325
Invoice Detail Rate Yes Numeric 0000024690 (represents item price of $2.4690)
Invoice Detail Extended Rate Yes Numeric 521.99Invoice Detail Unit of Measure Yes Character CS or LB
©2013, Tibersoft Corporation Page 19
Data Sharing Best Practices in a Contracted Price Relationship
Category Field Name Comment Required Field Type ExampleProduct Pack - Each Size Not as desirable is a com-
bined fi eld with size, measure and count in one fi eld
Yes Numeric 12 (for 12-ounce cans)
Product Pack - Each Measure Yes Character FL-OZ (use the singular form always)
Product Pack - Each Count per Unit of Measure
Yes Numeric 24 (for 12-ounce cans)
Product UPC Number No Character 1072158203973Product GTIN Number Case GTIN No Character 10721582039734Product Manufacturer’s Product
CodeYes Character 6667989
Product Manufacturer’s Name Yes Character Coca ColaProduct Manufacturer’s Brand
NameNo Character Dasani
Product Distributor Product Number
Yes Character 1102730
Product Distributor’s Product Description
Yes Character Purifi ed Water
Product Operator Product Cat-egory
No Character Contract
©2013, Tibersoft Corporation Page 20
Data Sharing Best Practices in a Contracted Price Relationship
Exhibit 4. Member List Example FieldsCategory Field Name Comment Required Field Type ExampleGroup Level Additional Member in-
formation or code # 1Additional attribute, ID num-ber, or organizational detail
No Character 0012466
Group Level Additional Member in-formation or code # 1
No Character Foodbuy - Concierge
Group Level Additional Member in-formation or code # 1
No Character 0012467
Group Level Additional Member in-formation or code # 1
No Character IHG
Member Member ID Code for Member identifi ca-tion
Yes Character 123456
Member Member Location Name Name of Location in Member List
Yes Character Crowne Plaza Tucson
Member Member Address Line 1 Street Address of Member Location. No PO Boxes
Yes Character 123 Main Street
Member Member Address Line 2 For Suite Number, etc Yes CharacterMember Member City City of Member Location Yes Character TucsonMember Member State State of Member Location Yes Character AZMember Member Zip Code Helpful but not required. Can
be looked up with City and State fi elds.
No Character 70012
Member Member Active Flag Flag Indicating Member is cur-rently active. 1= Yes, 0 = No
Yes Character 1
Member Member Start Date Date Member became active in the Member List
Yes Date (yyyym-mdd)
20091201
Member Member End Date Date Membership ended No Date
©2013, Tibersoft Corporation Page 21
Data Sharing Best Practices in a Contracted Price Relationship
ReferencesThe Hale Group. (2010). Foodservice 2020. Retrieved July 8, 2013, from http://
www.halegroup.com/~halegrou/wp-content/uploads/2012/05/Foodservice-2020. pdf
Wikipedia. (2013, July 9). Demographics of the United States. Retrieved July 8, 2013,
from http://en.wikipedia.org/wiki/Us_population
©2013, Tibersoft Corporation Page 22