Better data quality would boost sales
GS1 UK’s new report, ‘How suppliers can drive profits by addressing problems with product data’ analysed the costs to manufacturers in the UK’s grocery sector. It also looked at the benefits of bringing the sector’s product data management into line with the best countries in the world.
The report gave the example of suppliers and retailers in Sweden working together to create a common platform to share data across the supply chain. Their collaboration improved data quality, enabled timely exchange of information, and helped to cut non value-added activity, said GS1.
If the retail grocery sector here took a similar approach and worked together to create a common platform to share high-quality data across the supply chain, this could result in a benefit of between £17bn and £21bn to the UK economy, GS1 UK claimed.
Invoices did not match deliveries
Among other things, the report showed that, in the UK, 40% of invoices did not match deliveries – causing rejection, manual investigations, repeat journeys and wasted effort on behalf of suppliers and their customers.
With the introduction of improved data management in the US, some suppliers were seeing a 67% improvement in speed to shelf – from four to eight weeks to two weeks – the report also found.
Poor data management was also costing UK suppliers in terms of transport operations, said GS1 UK. In the US, suppliers using an improved data solution achieved 2–8% annual cost savings in terms of inbound and outbound operations.
“The UK’s grocery sector clearly has a massive problem with product data,” said Jim Dickson, head of retail at GS1 UK. “Previous research from GS1 UK has shown that 80% of product content is inconsistent: It’s costing the entire industry dearly in terms of cash, in terms of lost sales, and even in terms of the fees suppliers are currently paying for existing product data and image management.
“But there are other costs, too. Delivery delays can do lasting damage to a company’s reputation with customers and we’ve come across on-time deliveries increasing by 3% with the adoption of better data sharing solutions in different territories.”
Date sharing
To enable data sharing, GS1 UK has worked with grocery retailers and suppliers to create an industry standard for the management of product information and images.
The result, productDNA:hub, is a new service from GS1 UK that is said to provide a single catalogue of high-quality, independently verified product information. “It grasps the grocery industry’s product data nettle,” said Dickson.
While GS1 UK has been developing the new product data management system alongside large food firms such as Mondelēz, Nestlé, Procter & Gamble and Unilever, small suppliers also stand to reap the benefits, it said.
Approximately two-thirds (60–70%) of suppliers that subscribed to the new data management system would not pay for productDNA:hub in the first three years, GS1 UK added.
