DATA SHARING BEST PRACTICES - Tibersoft · Data Sharing Best Practices in a Contracted Price...

Data Sharing Best Practices in a Contracted Price Relationship

DATA SHARING BEST PRACTICESin 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

[email protected]

www.linkedin.com/pub/christopher-martin/0/13b/387%0D


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


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


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.



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.



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



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.



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



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



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.




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


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



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



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




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.


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.


Operator Loca-tion

Location Name Yes Character Restaurant

Operator Loca-tion

Distributor Account Number


Operator Loca-tion

Operator Location GLN


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




Ship To Operator Country

Yes Character USA

Invoice Summary Distributor’s Invoice Number


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


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



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


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



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.


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


Claimant Claimant Remit to Ad-dress Line 2


Claimant Claimant Remit to City No CharacterClaimant Claimant Remit to State No CharacterClaimant Claimant Remit to Zip No Character



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.


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



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


Product Pack - Each Measure Yes Character FL-OZ (use the singular form always)

Product Pack - Each Count per Unit of Measure


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


Product Distributor’s Product Description

Yes Character Purifi ed Water

Product Operator Product Cat-egory

No Character Contract



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


Group Level Additional Member in-formation or code # 1

No Character Foodbuy - Concierge




No Character IHG

Member Member ID Code for Member identifi ca-tion


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



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


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