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Scan-Based Trading Can Improve Inventory Management

CEO Tal J Zlotnitsky on the Vital Need to Save Newspapers

To reduce costs and improve category performance, retailers have increasingly turned to their vendors for help in managing inventory. Over time, retailers have sought to leverage their suppliers, bestowing to them the responsibility for in-store inventory, which is known as Vendor-Owned Inventory Management. Scan-Based Trading (SBT) is the most sophisticated of the three forms, the other two being Consignment and Pay-On-Scan.  With scan-based trading, the vendor has unrestricted store access, is responsible for inventory maintenance and paid contingent on scanned sales.


Scan-based trading is a transactional model in which the suppliers continue to own their inventory until it sells. At the point-of-sale, the system scans the products out. Scan-based trading is not a new concept. The iControl White Paper, Fact-Finding and the Single Copy Newspaper Business: Picking Your Scan-Based Trading Partner, tells how transformational scan-based trading was to the newspaper business. Grocery and non-grocery retailers have successfully used scan-based trading arrangements for years. Many consumer brands across categories such as Dairy, Frozen Foods, Snack Foods and Commercial Bakery engage in scan-based trading arrangements. 

Scan-based trading is efficient, effective and it works. Here is how SBT can improve inventory management, save money, keep the store shelves stocked, and keep customers happy.


Scan-Based Trading Creates a Genuine Partnership Between Retailers and Vendors

Scan-based trading streamlines the entire retail supply chain, turning it into a real collaborative process.  Often suppliers that engage in scan-based trading become preferred vendors. Because the suppliers are the owners of the inventory, there is no need for “back door receiving processes.” Eliminating this step saves up to thirty minutes per delivery. A robust SBT solution will offer centralized supplier and distributor management to retailers, and centralized retailer account management to suppliers and distributors.


Deliveries are Streamlined and Distribution Gains New Efficiency

Efficient routing increases the number of deliveries processed in a day which saves time in all areas of the supply chain; from loading the truck to stocking the shelves. Suppliers can use scan-based applications for order suggestions, merchandising improvements, and to support sales incentives for staff. The right solution will provide advanced data and process information through supply chain analytics providing in-depth knowledge and increased savings.


Better In-Store Stock Position for Greater Sales

Scan-based transactions increase sales through daily visibility of product movement. Scan-based transaction systems track items at the store and the SKU level, providing more efficiency, greater accuracy of replenishment schedules and elimination of out-of-stock situations. There is also a higher standard of data visibility between the retailer and the vendor within a scan-based trading arrangement because both partners agree to a bilateral sharing of information.

Scan-based transactions provide the vendor information about the timing of promotions and pricing discounts, and this enables the retailer to gauge quickly inventory availability in store or upstream in the supply chain. A single repository protects all the gathered data, facilitating ease of bilateral visibility and sharing. The information becomes the "data of record" for generating invoices between the vendor and the retailer. Both parties agree to predetermined payment terms thus eliminating time-consuming invoice reconciliations and costly delay of payments.

Scan-Based Trading keeps the focus relevant and on stocked shelves, increased sales, and a better shopping experience for the customers. iControl's Scan-Based Trading Solution is the top choice on the market today. Think you might benefit from iControl's SBT solution? 

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