Sainsbury tightens up pricing data and invoices

Sainsbury expects to roll out a new IT system by the end of the year, which will reduce invoicing problems and greatly improve the accuracy of pricing information exchanged with around 2,000 of its suppliers.

Electronic data interchange (EDI) specialist Inovis is working closely with Sainsbury on this project, which will automatically share ‘cost files’ between suppliers and the retailer.

Once implemented, it will ensure that the same information is used by all parties and enable corrections to be made before invoices are issued, saving considerable time and cost.

It is quite common for pricing information used by suppliers and retailers to differ because of the many product variants handled and frequent changes made. This can lead to much wasted time in correcting errors in invoices that have been issued and result in payment delays.

As well as Sainsbury, Inovis has EDI systems installed with Tesco, Asda and Morrisons. In the UK it also works with around 2,000 suppliers to the major multiples, of which around 70% are involved in food and drink. Inovis has systems installed with around 800 Sainsbury suppliers, including Magners Original Irish Cider, which is owned by drinks manufacturing group C&C.

“Sainsbury wants more accurate invoices [from its suppliers] and less human intervention to check and reconcile invoices,” said John Redfern, md of Inovis’s European operations.

“There are a couple of thousand suppliers to Sainsbury and what we are doing is driving automated compliance programmes for them. The cost file exchange program is about accurate exchanging of pricing information.”

Redfern added: “The driver behind [the project] is to get more accurate invoices; to ensure there are fewer invoice errors and less intervention from Sainsbury to correct them.”

Once Sainsbury has proved its system, said Redfern, it will probably roll it out to other non-food suppliers - a sector in which EDI has achieved much lower penetration.

Magners is working closely with Inovis business partner in Ireland Colman Computer Services on this project using the TrustedLink software system to link Sainsbury’s order information to Magners’ enterprise resource planning system.

TrustedLink improves the accuracy of data and helps cut down on mistakes within the cider manufacturer’s warehouse that can lead to inaccurate orders or non-delivery of goods.

Magners’ business systems analyst Jimmy McHugh explained: “TrustedLink sends price messages to Sainsbury, so that its system compares our price to its price to ensure that they match. If the prices match then the invoices will be okay; if prices mismatch, we can correct them quickly … so there are fewer invoice errors.”

In a separate project, Magners expects to go live at the end of September on a new EDI system with Morrisons using TrustedLink. This will replace a process of issuing paper-based invoices.