Food Forum: Time to streamline

Will this be the year that the Global Data Synchronization Network (GDSN) finally takes off?

By Milan Vacval

In 2004, GS1 announced the Global Data Synchronization Network (GDSN), an initiative to streamline supply chain transactions and reduce supply chain costs. As the initiative enters its seventh year, widespread adoption is still in the future, but we are seeing considerable progress in many areas.

So will 2010 be the breakout year for GDSN, or will it be another year of gradual progress toward a distant goal? As more of the industry’s retail goliaths join the call for data synchronization and especially data accuracy, this may be the year for accelerated adoption. The question is, are manufacturers ready?

The GDSN vision is an interconnected network that enables companies around the globe to exchange standardized supply chain data that will improve all aspects of supply chain operations, from ordering and billing to shipping and replenishment. Importantly, the benefits are based on an assumption of high-quality data.

It turns out that high-quality, consistent product information isn’t that easy to come by. Without good, accurate data, the GDSN only enables the rapid transfer of bad data, which actually adds costs to the supply chain.

Without the assurance of data quality and consistency, retailers, wholesalers and distributors will continue to manually verify the data they are receiving or they will simply ignore it and continue to build their own databases of product information. Retailers are reluctant to eliminate their own, costly manual data verification programs until they are assured of quality and consistency. So the burden for data quality falls back on manufacturers.

Indeed, many manufacturers are implementing programs to improve data quality, but it is a struggle to achieve consistency and sustain the effort over multiple locations and over time. The internal databases of product development, purchasing, production, logistics and order management systems often rely on entirely different sources for their product information. Master Data Management initiatives at larger manufacturers are starting to tackle this problem but these major IT projects have long timelines and must compete for resources across the company.

So some manufacturers are focusing their efforts on auditing finished goods, the only reliable source of data about the product that’s actually being shipped to customers.

In 2009, the industry saw remarkable progress in general acceptance of the negative impact inaccurate data has on the supply chain in areas such as transportation, shelf space management, warehouse management, ordering and invoicing. Momentum appears to be growing for solutions that are broader and more scalable. In particular, requirements for data synchronization and programs to measure compliance and accuracy were recently announced by Wal-Mart and Kroger and other retailers, including Wakefern, Associated Wholesale Grocers, Supervalu, Associated Food Stores and Wegmans, are requesting and receiving product information via the GDSN.

Momentum is also noticeable in the level of participation; the number of products registered has increased to 3.8 million (a 52% increase over last year) and the number of parties increased to over 19,000 (a 24% increase). The community has also made great progress in addressing gaps in functionality like such as handling preliminary items and support for the space planning process.

So, with increasing demand for quality data to drive the GDSN, what is the next step?

Software solutions that unify product master data help; but they don’t solve the problem because they only assure consistency, not accuracy. In other words, while they’ll ensure that the database has only one set of measurements for that case of breakfast cereal, they just can’t ensure accuracy—that the measurements are those of an actual case of product. Data cleansing software, including GDSN data pools, perform some validation, but cannot verify data against actual product. Experience among leading manufacturers and retailers has confirmed that the best practice for developing quality data is to capture data from finished product.

What can we expect in 2010? Increasing adoption of the GDSN by retailers and scorecards that measure both compliance and accuracy will place pressure on manufacturers’ systems. To meet the challenge, manufacturers will move data quality and synchronization initiatives higher on their priority list. Many will take a lead from their retail customers and implement programs that capture complete, accurate data by measuring finished goods from the production line.  It will be interesting to see whether manufacturers are ready to move at the pace retailers demand.

Milan Vacval is director of master data solutions at Gladson, a Lisle, Ill.-based provider of product images, product information and category management services.

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