Accurate Global Data Synchronization Improves Supply Chain Efficiencies
New study also reveals revenue increase
CHICAGO; Aug. 7, 2006 – Investing in accurate global data synchronization (GDS) brings potential benefits, such as improved supply chain efficiency, cost savings and increased revenue to consumer packaged goods and retail companies, according to a report released today by Accenture, the Food Marketing Institute (FMI), the Grocery Manufacturers Association (GMA), Wegmans Food Markets and 1SYNC.
The report is based on a study of Wegmans Food Markets and seven major suppliers – The Coca-Cola Company, General Mills, The Hershey Company, The J.M. Smucker Company, Nestlé, PepsiCo, Inc., and The Procter & Gamble Company. The study confirms the power of GDS, the harmonization of manufacturers’ and retailers’ product information, by quantifying the actual benefits gained by companies – up to 64 percent improvements in supply chain and operational areas and 67 percent in customer relationship and growth areas.
“The main messages from this study are compelling,” said Marianne Timmons, vice president of supply chain and global business to business, Wegmans Food Markets. “We have realized many quantifiable benefits from accurate data synchronization. Further, it is foundational to next generation business processes for Wegmans and our trading partners.”
Concurring, GMA’s vice president of supply chain and technology Pamela Stegeman said, “GDS affects all parts of the supply chain. Our study shows that benefits are available to everyone from the sales account manager to the backroom receiving clerk. When accurate data is synchronized between trading partners and used by all parts of both organizations, we can better meet consumers’ needs.”
The study found trading partners can benefit from GDS by minimizing disruptions across the supply chain, with:
- Improved accuracy of product weights and measures, as one manufacturer found when it corrected a weight error on a single item and saved $2.2 million in annual transportation costs;
- Improved logistics and distribution efficiencies, which Wegmans enjoyed after eliminating $1 million of labor and inventory carrying costs from its distribution network;
- Expediting direct store delivery (DSD) check-ins at the store level: Wegmans estimated a 7 percent increase in productivity by reducing DSD check-in time
- Synchronizing data with trading partners
- Sharing accurate item data improves order and invoice administration: A manufacturer improved productivity by an estimated 59,000 hours annually by reducing inspection time five minutes per order
- Improving flow of new product information between manufacturers and retailers means faster speed-to-market: A manufacturer reduced its speed-to-shelf for new items from up to eight weeks to two weeks
- Using GDS to improve customer service: Using GDS to synchronize coupon family codes helped Wegmans reduce customer coupon scanning rejections by 40 percent
"This study makes a persuasive case for the many benefits of GDS by describing the actual ways it can transform a business. The first step that is required is that manufacturers and retailers need to accelerate their implementation efforts by executing the industry action plan as outlined in this study," FMI senior director of industry relations, Pat Walsh commented.
While the number of consumer goods and retail companies using GDS has increased in the last three years from 100 to nearly 10,000, there is potential for more growth in the industry. As current GDS initiatives gain more traction and additional companies enlist the appropriate technology, the benefits associated with GDS are expected to increase.
“Among the important findings of this research is that high-performing companies need to make accurate data synchronization a business priority, not just an IT priority,” said Marco Ziegler, senior executive, Accenture’s Consumer Goods & Services practice. “Global data synchronization can be an effective catalyst for transforming business processes and delivering significantly improved results throughout the supply chain.”
The study was sponsored by FMI, GMA, Wegmans Food Markets and 1SYNC and conducted by Accenture. Copies of the report are available on the GMA Web site at http://www.gmabrands.com/publications/index.cfm.
“We are confident that the competitive advantage achieved by leading companies through synchronizing accurate data will encourage and inspire other companies that have been waiting for the right time to get started. As companies expand item data synchronization to all product lines and geographies, the pace of change in the industry will accelerate and enable widespread synchronizing of accurate price data to achieve even greater returns,” said Steve Vazzano, senior director, market development, 1SYNC.
In March and April of 2006, researchers interviewed more than 120 personnel in departments such as sales, customer service, logistics and accounting at Wegmans Food Markets and seven suppliers.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 133,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended Aug. 31, 2005. Its home page is www.accenture.com.
Food Marketing Institute (FMI) conducts programs in research, education, industry relations and public affairs on behalf of its 1,500 member companies — food retailers and wholesalers — in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores with a combined annual sales volume of $340 billion — three-quarters of all retail food store sales in the United States. FMI’s retail membership is composed of large multi-store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from 50 countries.www.fmi.org
The Grocery Manufacturers Association (GMA) represents the world’s leading branded food, beverage and consumer products companies. Since 1908, GMA has been an advocate for its members on public policy issues and has championed initiatives to increase industrywide productivity and growth. GMA member companies employ more than 2.5 million workers in all 50 states and account for more than $680 billion in global annual sales. The association is led by a board of member company chief executives. For more information, visit the GMA Web site at www.gmabrands.com.
1SYNC™ is a newly-formed subsidiary of GS1 US™. The company is the combination of Transora and UCCnet, two Global Data Synchronization Network (GDSN)-certified Data Pools. 1SYNC offers a range of data synchronization services that eliminate costly data errors, increase supply chain efficiencies, and promote the advancement of next-generation technologies, such as the Electronic Product Code™ (EPC). GS1 US is a not-for-profit member organization of GS1 and is dedicated to the development and implementation of standards-based, global supply chain solutions. 1SYNC is headquartered in Lawrenceville, New Jersey with offices in the U.S., Brazil, France, Mexico, and UK. Visit www.1SYNC.org for more information.
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