(New York, N.Y. August 6, 2001) - "Recommendations for Pilot-Testing the Application of Scan-Based Trading to Magazines: Phase 1 of the MRAC Scan-Based Trading White Paper" has just been released by The Magazine Retail Advisory Council (MRAC). The voluntary pilot tests described in the White Paper are intended to explore and uncover the fundamental requirements of scan-based trading (SBT) for the magazine industry, and streamline operational processes by suggesting standards for consistency in methodology. Scan-based trading includes the use of retail scanner data to create a market-driven supply chain that is efficient and that uses information to synchronize the supply of magazines with consumer demand at the point of sale. It also provides accurate, auditable information that can be used to manage ongoing business relationships between trading partners. "These recommendations are an important first step in helping the industry understand the ramifications of SBT, which ultimately will be critical in improving single-copy efficiencies and building sales," said Mike Sullivan, MRAC Chair and President/CEO of CMG. The objectives of the pilot tests are to: * assess the reliability and integrity of scan data * determine the accuracy of the SBT identification of each issue sold * identify and measure the savings from SBT throughout the supply chain * measure and document shrink throughout the supply chain * measure and document shrink by title, issue and store * identify the next steps for the pilot (e.g., reducing shrink, recommendations for process improvements) The primary function of these pilot tests is to reveal a greater understanding of three critical issues - shrink, issue add-on code and data sharing - which will aid in strategic planning for SBT in the future. The cause and resultant impact of shrink must be measured at each step within the supply chain. The ability to identify issue date is currently considered imperative for audit purposes and for a full implementation of category management. Data sharing and synchronization open up opportunities for process cost savings and incremental revenues at point of sale. While this first step toward scan-based trading is an important one, these pilot test recommendations are simply that: suggested procedures. Cautioned Anne Finn, VP/Consumer Marketing for the MPA: "SBT is currently in its infancy and the magazine industry is a pioneer in developing a framework for testing. We understand that a limited number of retailers may have the ability to fully embrace SBT but we are confident that it will be a major benefit for those trading partners who cooperatively implement it. The findings from the pilot-tests will help formulate the future framework."