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New Technology Improves Efficiency at Stores - 2001-07-30

Once a small, fragmented and primarily local industry, the selling of groceries is becoming a highly efficient global enterprise. Analysts credit rapidly evolving technology, transportation innovations and the Internet for the changes.

At Giant Food's warehouse in Jessup, Maryland, unmanned yellow and black forklifts glide across the floor lifting boxes off shelves and transporting them to waiting trucks.

The only workers present are programming the computers that are choreographing the forklifts.

Pete Perotta, a technology reporter for Supermarket News, says more and more grocery chains today are cutting costs by having robots rather than human beings move warehouse goods. "Labor forces are becoming more expensive," Mr. Perotta says. "There are ergonomic issues, job injuries that loom with warehouse workers, and, if done correctly, the speed and accuracy with which these machines can work far exceed what the humans can do."

Just as computerized robots are changing the way goods are moved, so business-to-business computer networks are changing the way they are bought in the first place.

The WorldWide Retail Exchange, for example, enables member retailers to purchase goods over the Internet from some 100,000 suppliers around the world.

Spokesman Peter Jeuptner says the Exchange not only enables members to buy everything from crackers to clothing, but also to share information. The result, he says, is greater supply chain efficiency and lower prices. "For example, a supplier may hold a lot of excess inventory because he doesn't really know the sales forecast of his retailers," Mr. Jeuptner says. "If you collaborate and share the forecast, the supplier can reduce the excess inventory. It really is there to have the right product at the right place at the right time, and also at the lowest price."

Mr. Jueptner says the WorldWide Retail Exchange is available to all buyers regardless of their size. "There is always going to be a scale advantage for larger players in purchasing power," he says, "but in terms of network and access, this is really a great tool for medium and smaller players as well. The Exchange is open to all sizes of retailers."

Mr. Jueptner says increasing price competition is pushing retailers of all sizes to join such business-to-business exchanges